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Companies Going Green through Innovation and Efficiency

|Includes: Cree, Inc. (CREE), ON, RBCN

As businesses look to cut costs, managers seek more efficient products for their operations. A growing field of companies are catering to meet those needs.

CREE, Inc. (NASDAQ:CREE), Fairchild Semiconductor (FCS), and Rubicon Technology (NASDAQ:RBCN) are three companies in the building and efficiency arena that offer efficiency-related products.

CREE’s use of LED (light-emitting diode) lighting as an energy-efficient and environmentally friendly alternative to the incandescent light bulb is a leader in its market.  CREE manufactures semiconductors that enhance the value of LED solid-state lighting, power and communications products by increasing their energy performance.

Orlando, Florida’s largest resort, the Hyatt Regency Grand Cypress, has installed LED lighting by CREE in an effort to become a “greener” hotel.  The resort, located near Walt Disney World, recently replaced their older lighting fixtures in the 54 hallways and newly refurbished 10,000-square-foot lobby in part of a multi-million dollar renovation.

Rick Jackson, Chief Engineer, Hyatt Regency Grand Cypress said, “We are constantly looking for ways to cut down on utility costs, and our lobbies and hallways are lit 24-hours a day, seven days a week.  Working with Regency Lighting, we were able to compare the cost and energy savings of Cree LED products with the traditional lighting we had been using. The LED lighting installations in the hotel hallways and lobby are not only significantly reducing our electric bill and saving on maintenance costs, but are providing better quality lighting for our guests.”

Fairchild Semiconductor (FCS)  focuses on high performance semiconductors.  FCS products and components are used for telecommunications, automotive, consumer, computer and industrial applications, as a means to providing ways to conserve energy.

Fairchild Semiconductor President/CEO Mark Thompson recently said, “We pushed adjusted gross margin over 30% and have strong momentum heading into the first quarter to exceed our past gross margin peak.” He added, “Strong execution on sales growth, margins and cost reductions also enabled us to generate $43 million of free cash flow in Q4 and a record $129 million for all of 2009.”

FCS has a price-to-book of 1.24 and a forward P/E of 9.99.  After Zacks rated FCS a ‘strong buy’ and a positive sales outlook for the current quarter earnings estimates moved sharply higher.

Rubicon Technology, Inc. (RBCN) provides sapphire substrates and optical windows used in applications including LED’s and radio frequency integrated circuits (RFIC’s).

RBCN recently announced a two year capacity expansion plan, as the company is experiencing increased demand for its products.

The company intends to double their current capacity to serve the growing demand for large diameter substrates. RBCN will also build a facility in Asia to expand post crystal growth processing operations.  The two new facilities are expected to open by the end of next year, and an expected cost  is estimated to be between $60 and $65 million over the next two years.

Disclosure: None