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Re-Examining LG Display, And The Ramp-Up In China

Income Clock profile picture
Income Clock


  • The fortunes of LG Display are tied to the evolving state of the display industry. I see Apple in a similar light.
  • The recent move in LPL shares was due to market recognition of some developments and ignorance of others.
  • I'll also re-examine Apple's relationship to the broader market.

It's been almost exactly two years since I published my Top Idea article, "Why Now is the Time to Buy LG Display" and those who acted have realized about 60% return on capital.

LPL for coverage period

It's been something of a rocky ride, though, and three more Pro articles have followed, each citing a different buying opportunity which resulted in even greater gains on annualized basis. This article will be different. It explains why I liquidated the last of my long LG Display (NYSE:LPL) positions over the past month and am discontinuing coverage of the stock in my services. I will also re-examine Apple's (AAPL) relationship to the industry and broader markets.

Recent News and Stock Movement

Just before Independence Day, Korean reports that Apple might subsidize AMOLED production at LG Display began making their way across western news sites. The news had little effect on LPL, though, as the stock declined marginally for the day. An understanding of the Korean press is crucial to assessing the impact of news like this. My view is that the news lacked impact because the market has regarded such an agreement as a near certainty for a long time now. I know I have done so since the beginning, and I've updated that outlook on several occasions as the situation dragged on longer than it should have. Word is that LGD is now soliciting the investment, which will probably result in worse terms than it might have if an agreement had been reached before the Samsung deal and expansion were official. Apple's sub-par experience with the AMOLED watch face supply from LG Display, where only a third or so of capacity turned out to be usable, can't have helped matters either.

Instead, the rapid ascent in LPL began a month earlier, when news broke that LGD would

This article was written by

Income Clock profile picture
Individual investors should feel free to message me privately about my real-time subscription service, which is very affordable.  That is also included with my short idea product for institutional investors, here on Seeking Alpha.For a better mobile experience on Seeking Alpha click the top right menu icon on most browsers and select "request desktop site".I am a former financial communications programmer, turned full-time investor. I began investing in the mid-1990s, looking for a way to achieve early retirement. (A goal in which I have succeeded, if you don't consider full-time investing a job.) I took a scientific, experiment-based approach rather than a studious one. I feel that this approach, combined with my extensive programming work in financial markets and directly with traders has given me uncommon contrarian insight into what really drives market dynamics.To that end, my articles will center around stocks and their derivatives because that's where I have the most experience (over 20 years). I may occasionally comment on currencies, where I believe I have sound academic knowledge, but less trading experience. I will always refer to a company by name or some abbreviation thereof. By contrast, I will refer to the stock a company issues by its ticker symbol. I think it can be important to differentiate between the two.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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