Cree Inc. (CREE): Today's Featured Technology Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Cree ( CREE) pushed the Technology sector lower today making it today's featured Technology laggard. The sector as a whole was unchanged today. By the end of trading, Cree fell 70 cents (-1.5%) to $44.72 on light volume. Throughout the day, 1.3 million shares of Cree exchanged hands as compared to its average daily volume of two million shares. The stock ranged in price between $44.47-$45.61 after having opened the day at $45.43 as compared to the previous trading day's close of $45.42. Other companies within the Technology sector that declined today were: Sycamore Networks ( SCMR), down 28.7%, DragonWave ( DRWI), down 27.6%, Wireless Ronin Technologies ( RNIN), down 14.2%, and Alvarion ( ALVR), down 13.6%.
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Cree, Inc. develops and manufactures lighting-class light emitting diode (LED) products, lighting products, and semiconductor products for power and radio-frequency (RF) applications. Cree has a market cap of $5.28 billion and is part of the electronics industry. The company has a P/E ratio of 94.2, above the S&P 500 P/E ratio of 17.7. Shares are up 33.1% year to date as of the close of trading on Friday. Currently there are nine analysts that rate Cree a buy, five analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates Cree as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

On the positive front, New Energy Systems Group ( NEWN), up 78.4%, China Sunergy ( CSUN), up 19.3%, Advanced Photonix ( API), up 18.6%, and NQ Mobile ( NQ), up 17%, were all gainers within the technology sector with Sap AG ADR ( SAP) being today's featured technology sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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