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In the recent Nas bloodbath, Cree came up on my stock screen for companies with good EPS and revenue growth, excellent ROE and increasing margins, and PE less than 5yr avg PE. Now I know why the PE has dropped-- the fear of decreasing margins.

Usually I would shy away from such a small company with a recent bad report, but Cree is intriguing to me. My question is: Are these products (LED's, wafers, etc) fairly recession-proof? The increasing percentage of gov't contracts seems to make me think so.
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No. of Recommendations: 15
Usually I would shy away from such a small company with a recent bad report

Yabba, before we can answer any of your questions and for those answers to do you any good I think you need to do some more in-depth research on CREE...its earnings conference call was not a "bad report." As a matter of fact the company is doing as well, if not better than ever.

Please stop reading the headlines of misconstrued stories and do a little more digging. Then the information you receive here will be of more value (P.S. this is not cheerleading, this is just the absolute truth. It is the same sort of reasoning that people keep asking me in a perplexed way "are you sure CDMA is 3G wireless everywhere, and that QCOM will get paid regardless?" The declining margins is about as truthful as QCOM not being the key center piece of 3G wireless).

So look a little harder first.

Tinker
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