Cree, Inc. Changes Up Their Strategy

Cree, Inc. provides 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, Taiwan, and internationally. It operates in three segments: Wolfspeed, LED Products, and Lighting Products.

Cree was the it company years ago because when LED were just coming onto the scene, they were the leaders in the field.  However, Cree couldn’t hold the lead and it became evident when they announced their quarterly earnings this past week.

The company reported fiscal third-quarter net losses of $227.9 million, or 22 cents a share, compared with losses of $240.6 million, or 10 cents a share, in the year-ago period.  Revenue rose to $274.1 million from $225.2 million in the year-ago period.  Overall, Cree delivered revenue below consensus estimates but beat earnings expectations.

And the earnings numbers come less than one month ago Cree announced the sale of its lighting business to Ideal Industries for a total possible consideration of $310 million.  The selling of their lighting business is part of their shift to focus on the power and radiofrequency business. The next-generation semiconductor unit is working on technologies with multiple applications, from 5G networks to smartgrids to powering electric vehicles.

Execs told analysts they still plan to funnel additional investment in boosting Wolfspeed’s capacity, as the materials it’s developing are in high demand from multiple industries, from 5G to electric vehicles.

“We anticipate demand exceeding supply in the next couple of quarters,” Lowe said, noting the “opportunity pipeline” exceeds $5 billion. “Our opportunity pipeline is larger than it has ever been… We have a tremendous opportunity ahead of us.”


So where is the stock price head next, lets go to the charts?

Monthly Chart (Curve Timeframe) – monthly supply is at $78 and the monthly demand is at $16.

Weekly Chart (Trend Timeframe) – the trend is up.

Daily Chart (Entry) – the chart suggests if price can make it up to the daily supply at $80, it would setup for a potential opportunity to go short.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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