Lo and behold, I now have a semiconductor stock for you. First we had a few dot.com's which actually have done quite well....dabbled in the China internet frenzy with SOHU, and yes...a chip stock! The stock isn't perfect with a hiccup (I checked on that spelling and 'hiccup' is preferred over the older 'hiccough'!)..in revenue growth...but I believe we should look at those that have had interruptions in their steady revenue growth AS LONG AS they are BACK ON TRACK. (excuse my shouting).
According to money.cnn.com, Cree, Inc. (CREE) "...develops, manufactures, and markets silicon carbide-based semiconductor materials and electronic devices." CREE is having a nice day in a sloppy market today trading as I write at $22.16 up $2.80 on the day or 14.46%. (better than most money market accounts after 7 years lol)
This Durham, North Carolina company reported their fourth quarter results on July 29, 2003, on PRNewswire-FirstCall, as reported by the NYTimes on the Web: for the first quarter of fiscal 2003, record revenue of $64,061,000 a 69% increase (!) over the $37,800,000 reported for the same quarter in 2002. Net income was $11.4 million or $.15/diluted share compared to a loss of ($22.5) million or ($.31) per diluted share last year.
Morningstar.com shows an almost linear growth in revenue from $44.0 million in 1998, $62.4 million in 1999, $108.6 million in 2000, $177.2 million in 2001, $155.4 million in 2002 (the HICCUP), $203.6 million in 2003 and now, if you extrapolate the current quarter would get us over $240 million for 2004.
Free cash flow is also looking up: ($15) million in 2000, ($31) million in 2001, ($3) million in 2002 and $13 million in the trailing twelve months per Morningstar.
The financial condition of this company per Morningstar looks FABULOUS...with $121.7 million in CASH and $67.8 million in other current assets vs. $29.4 million in current liabilities and NO long-term liabilities.
CREE is not a small cap stock with a Market Cap of $1.62 Billion. The trailing p/e is 42.09 which isn't too bad considering recent return to profitability and explosive growth. The PEG ratio supports this at 1.05.
There are 73.3 million shares outstanding, per Yahoo, with 70.10 million of them that float. There are a LOT of shares out short...which suggests somebody thinks this is overpriced...but also sets us up for a 'short squeeze' as all those short sellers try to cover their borrowed shares...this represents 7.933 days of trading or 30.25% of the float as of 8/8/03.
No dividend is paid and the last split was a 2:1 split in December, 2000.
I do like this stock a lot. I think I need to be less rigid on the linear revenue growth...but this hiccup has been overcome and company appears to be on track to a dynamite year. I do not own any shares of this but would certainly think of buying some...it meets my criteria...but as you know....it is the margin. the margin, the margin...that holds me back lol.
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