GLW) is trading at less than 8. The reason is simple. Facebook sells digital goods, while Corning actually makes stuff. Americans can't make stuff, right?
Wrong. We think of manufacturing as a bunch of low-skilled workers assembling things on a mass production line, the way Henry Ford and the Manhattan sweatshops did it a century ago. This is the way China does it. They have logistics, they treat people as disposable, they compete fiercely within this narrow space and they rule the world. But there are other ways to make things, even in massive quantities. There's the Corning way. Corning's latest product is called
Willow Glass. It's tough, like the Corning Gorilla Glass you find on your phone or tablet now. But it's also very thin, it's flexible, and Corning has found a way to make it the way you make newsprint, roll-to-roll, as opposed to the way you make glass panes, sheet-on-sheet. This is going to revolutionize the industry. Instead of next year's phones being like thin bricks, they could be more like folded rubber sheets. And the scalability of this process is simply enormous. So, yes, Corning has plants in Shanghai and in China. But it also has two plants in North Carolina. The point is there is an immense amount of intellectual property in Willow Glass. There is an immense amount of capital behind it. But there isn't a lot of labor. Corning has been coming up with stuff like this for a century, moving smoothly from eyeglasses to dishes to architectural glass and now to monitor coverings. Corning hasn't just made a better display glass. It has also innovated new, lower-cost production techniques that should keep this technology in American hands for years to come. It's already showing up on the bottom line. Corning's sales volumes are up 25% since 2008, they're taking nearly half of that to the gross profit line, and nearly a third shows up on the net income line. The company could pay its current debt load out of cash twice over, with nearly $5.8 billion in cash and short-term investments on the books. It has over $17 billion in plant and equipment on the books.