Takeover chatter continues to drive up shares of Cree Research (CREE). By far the biggest bull on the stock, American Technology Research analyst Andrew Huang weighs in on the rumors Tuesday, and finds they make sense (not too surprising).
“Recent rumors that Cree could get acquired make sense to us given that Cree is the last publicly traded pure-play in the market,” he wrote in a note Tuesday morning (pure play LED play, I assume he means, by the way). He says an acquisition by rumored suitor General Electric (GE) “would make strategic sense.”
But he also sees other potential bidders, including “component vendors,” such as Rohm (ROH) or Matsushita Semiconductor (MC); South Korean OEMs, such as Samsung or LG, and lighting fixture makers, such as Cooper Lighting or Schneider Electric.
He adds that “with Cree’s LED fundamentals improving, we think it is only a matter of time before consensus estimates start heading materially higher.”
Cree, which rose $2.30 on Friday, was up another 42 cents Tuesday at $27.02. That, by the way, is less than half of Huang’s $55 price target, which suggests either that the stock is absurdly cheap, or Huang is absurdly bullish (or maybe some combination). Take your choice.
My colleagues over at Dow Jones Newswires are reporting that General Electric “isn’t interested in buying Cree,” citing “a source close to G.E.”