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Stocks C / Cree Inc.

URL:  https://boards.fool.com/the-reason-the-roe-is-sub-par-right-now-is-because-12777902.aspx

Subject:  Re: The future of Cree: Part III Date:  6/22/2000  1:11 AM
Author:  madmarv Number:  2628 of 41734

The reason the ROE is sub-par right now is because of the secondary offering back in January. Shareholder's Equity jumped from $142 M in December to $426 M in March while Net Income rose from $5.8 M to $9.2 M. This dilluted the ROE calculation significantly.

A lot of the cash generated from the secondary is currently sitting idle in various short term investments and the balance is going to finance the new factory.

You might want to take a stab at calculating ROIC from the assets side and exclude the investments. I haven't tried this yet, but I'm fairly sure that it'll be better than the ROE.

Marv
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