Buy Alert: August 14, 2013

| August 14, 2013

Buy Alert:  August 14, 2013


Trade Details

Buy Cree (CREE) September 2013 $65 Calls for $1.45 or better



CREE shares are getting crushed as of this writing, down 20% on the day.  Why the big drop?  It’s all due to mixed earnings, particularly lower guidance for next quarter, including expected lower margins.

As usual, I find this selling to be way overdone.  After all, CREE increased earnings by 52% and revenues by 22% year over year.  That hardly seems like a struggling company.  The lowered guidance everyone seems to be scared of is just slightly lower than what the consensus estimates were.

LED lighting is a game changer in the lighting industry and CREE is leading the charge.  There’s no reason to believe the company is in trouble because of slightly lower margins (mostly due to a very successful deal to sell LED bulbs through Home Depot (HD), and not because of higher costs).

Let’s grab some September calls now while the stock is under pressure from sellers.


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Category: OTW Buy Alerts