Cree (CREE): Heavy Pre-Market Activity

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Cree ( CREE) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Cree as such a stock due to the following factors:

  • CREE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.2 million.
  • CREE traded 305,906 shares today in the pre-market hours as of 8:58 AM, representing 20.3% of its average daily volume.

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More details on CREE:

Cree, Inc. develops, manufactures, and sells lighting-class light emitting diode (LED), lighting, and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, South Korea, Japan, Malaysia, and Taiwan. CREE has a PE ratio of 48.9. Currently there are 9 analysts that rate Cree a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for Cree has been 1.5 million shares per day over the past 30 days. Cree has a market cap of $6.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.77 and a short float of 11.7% with 8.29 days to cover. Shares are down 20.5% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cree as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • CREE's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 16.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CREE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.48, which clearly demonstrates the ability to cover short-term cash needs.
  • 45.24% is the gross profit margin for CREE INC which we consider to be strong. Regardless of CREE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CREE's net profit margin of 6.94% is significantly lower than the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CREE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CREE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.10%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CREE is still more expensive than most of the other companies in its industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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