Bull Of The Day: Cree (CREE)

Cree (CREE) is a Zacks Rank #1 (Strong Buy) and sports the divergence that I love to see in the Zacks Style Scores. I see an A for Growth and a D for value and that tells me right away that I am on the right path. My focus is on aggressive growth, and I know that growth investors are looking for the opposite of what value investors are looking for. When I see that divergence, I know I found what I am looking for.

Today, CREE is the Bull of the Day. Let's take a look at why I like this stock right here.

First off, I see that it is in the chip space and while I normally say that chips are for dips -- right now they look like a tasty treat. The chip names are likely to move significantly higher when a China deal is announced due to the relationship that so many names have with that region and country specifically.

Secondly, a big buyer just put some cards on the table. Artisian Partners filed a 13G with the SEC stating that they control 8.1M shares. That was just announced the other day... and it follows an early January filing that saw Vanguard announced a 10.4M share position.

When I see big buyers of size on a stock with a great Zacks Rank, I know it is worth a much deeper look.

Earnings Estimates

When a stock is a Zacks Rank #1 (Strong Buy) then we know the estimates are moving higher. That is the key part of the Zacks Rank.

I see the current quarter move higher by 2 cents, and the full year (fiscal 2019) has moved from $0.73 to $0.78.

The Zacks Consensus Estimate for fiscal 2020 has remained at $1.27 over the last 90 days.


The forward PE of 66x is a little rich, but when you look at the other metrics it doesn't look that bad. A see a 2.4x price to book multiple, which is pretty pretty good for a stock with a 12% topline growth rate. I also see a 3.4x price to sales multiple which is a little high but still within an acceptable range.


Cree, Inc. Price and Consensus

Cree, Inc. Price and Consensus | Cree, Inc. Quote

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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