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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • LED Lighting Growth: An Explosive Beaten Down Opportunity 0 comments
    Sep 23, 2013 8:25 PM | about stocks: CREE, AIXG, VECO, GE, GS
    LED Light

    LED Lighting Growth: An Explosive Beaten Down Opportunity by Market Authority

    Since 2013 began, Fast Money Trader has closed 26 winners and just three losers.

    In recent months, we took lightning fast gains on an overreaction in potash names, like Potash (NYSE:POT) and Mosaic (NYSE:MOS). We even banked a quick 61% gain trading silver.

    These gains are nothing new for the Fast Money Trader team.

    We've been closing trades like this for years.

    Today, though, we wanted to share an example trade with you. We shared this with FMT readers earlier today. But we wanted to offer a taste of what you might be missing.

    Enjoy . . . with trade ideas included.

    I've been a big fan of LED lights for years, having jumped in and out of Cree (NASDAQ:CREE), Aixtron (NASDAQ:AIXG), and Veeco (NASDAQ:VECO).

    It was 2008 when I first noted:

    It was December 2007 when President Bush inked an 822-page energy measure that included a future ban on 100-watt incandescent bulbs by 2012. They'll make way for bulbs that use 25% to 30% less energy, lop an estimated $18 billion off annual U.S. electric bills, and cut consumer electricity usage by 60%. It's a move that'll add upside to the likes of the LED stocks.

    American Technology Corporation CEO Richard Prati agrees, saying that Cree's LED technology will grow "astronomically" in coming years. He even believes that LED technology will proliferate like Internet companies did in the 1990s; that LED can save consumers up to 90% on energy bills; and that its "positive environmental reputation will attract consumers."

    And American Technology Research analysts believe LED lighting will "eventually replace all sources of lighting."

    That's a lot of lighting, and monstrous potential for Cree.

    LED Stock Growth: Six-Year, 388% Industry Growth Expected

    We're not talking about small industry growth either. In 2005, the LED industry was valued at $205 million. By 2011, it could be valued as high as $1 billion-388% growth in six short years.

    How can you or any other investor or company pass up that opportunity?

    Philips Electronics isn't. Philips just announced it was buying Genlyte for $2.7 billion as part of its LED-related buying spree, as it builds market share against General Electric.

    Who knows, maybe it'll put pressure on GE to buy a company like Cree. Would it be a shock if a company wanting to guarantee a supply of LED came forward and paid Cree what it is worth? No. There'll be plenty of demand, and possible tight supply, which will benefit Cree-like companies.

    LED Stock Growth: We're Not the Only Ones That See the LED Potential

    Walt Disney World has changed over to LED, wiring Cinderella's Castle with more than 20,000 LEDs and saving thousands of dollars.

    The Times Square ball, fully lit with LED lighting, was twice as bright and used half the energy.

    The city of Boulder, Colorado is switching to LEDs for its Downtown Pearl Street Mall.

    It's further proof of LED growth potential. You just have to pick up LED-related stocks early and cheaply enough before the Internet-type run begins.

    So when I come across a "beaten down" opportunity in the sector, I want in.

    Goldman Sachs just now highlighted LED as a top "disruptive" theme over the next decade. And I have to agree, as LED penetration picks up steam.

    At the time, Cree was a relative unknown, trading under $20 a share.

    It got as high as $82 shortly thereafter.

    The growth is still far from over. And we believe the latest dip is a screaming buy opportunity after posting a drop in earnings and softening Q1 guidance.

    It's a blip on the scree, though… nothing more.

    I want in on the dip.

    There are two simple ways to trade CREE.

    One, you can buy the underlying stock up to $62 a share.

    And, or two you can buy the January 2014 65 calls at market.

    Cree is going places.

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    Stocks: CREE, AIXG, VECO, GE, GS
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