Declines From Cree Inc. (CREE) Drive Down Electronics Industry

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 Electronics industry lower today making it today's featured Electronics laggard. The industry as a whole closed the day down 0.2%. By the end of trading, Cree fell 94 cents (-1.7%) to $54.34 on average volume. Throughout the day, two million shares of Cree exchanged hands as compared to its average daily volume of 2.3 million shares. The stock ranged in price between $53.28-$55.61 after having opened the day at $54.77 as compared to the previous trading day's close of $55.28. Other companies within the Electronics industry that declined today were: Trina Solar ( TSL), down 10.8%, JA Solar Holdings Co. ADR ( JASO), down 10.7%, Yingli Green Energy Holding Company ( YGE), down 9.7%, and Meade Instruments Corporation ( MEAD), down 9%.
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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 $6.32 billion and is part of the technology sector. The company has a P/E ratio of 112.9, above the S&P 500 P/E ratio of 17.7. Shares are up 58.9% year to date as of the close of trading on Friday. Currently there are 10 analysts that rate Cree a buy, four analysts rate it a sell, and six 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, SemiLEDs ( LEDS), up 14.3%, Trio-Tech International ( TRT), up 13%, Ambarella ( AMBA), up 9.5%, and Veeco Instruments ( VECO), up 8.5%, were all gainers within the electronics industry with Mellanox Technologies ( MLNX) being today's featured electronics industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the electronics industry could consider iShares Dow Jones US Technology ( IYW) while those bearish on the electronics industry could consider ProShares Ultra Short Semiconductor ( SSG).

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