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News Letter Reviews A Small Alternative Energy Company Lights the Way
News Letter Reviews A Small Alternative Energy Company Lights the Way 
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| A Small Alternative Energy Company Lights the Way |
| Friday, 24 August 2007 | ||||||||
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I try to keep one eye on the alternative energy sector, even though I am quite tired of hearing about my “carbon footprint.” The more I read the less eco-friendly I find myself acting. These days even a grungy cotton undershirt should be organic, washed in a special washing machine with special detergent, and line dried. I wonder how convenient it all will ever really be. Biodiesel, solar and wind energy, and consumers being allowed to return energy to grid all remain highly debatable topics.What will be best for the environment? What will still be good for business? But, I ask myself, what if a major breakthrough really does occur in my lifetime? Alternative energy companies are paving the way through some very compelling innovations in their industry.You may have heard of Cree, Inc. (CREE:NASDAQ), a company with a global presence that is a leading manufacturer of semiconductors.This company is making conductors that are smaller, more powerful, and generate less heat. Having the best of these characteristics is the name of the game.Cree produces LED solid-state lighting, which is poised to replace more traditional fluorescent bulbs. Fluorescent bulbs fall short of the mark due to their contents containing mercury. Cree makes LED, or light-emitting diodes, that are less hazardous and more energy efficient than lights that are currently available on the market. LED light also uses backlit electronic displays. An LED semiconductor is found in high-current power supplies, variable speed motors, and cell phones and network devices for voice and data communications. Both commercial and military defense customers use Cree’s products. Cree’s clients are rapidly increasing. The company has contracts with Toronto, Canada and Raleigh, North Carolina to switch to all LED light posts. As I am writing, the company is announcing its plans to triple the size of its LED factory in China. It makes sense that Cree would especially benefit from the growing Chinese economy, as China faces major concerns over air pollution. It would be a boon to incorporate eco-friendly infrastructure into ever-expanding Chinese cities. LED revenue is up 37% for Cree in just the last quarter. Overall product revenue is up 26% and the company earned $111.2 million. Cash flow from operations was $26.7 million. Cree beat analysts’ expectations in earnings in the most recent quarter.A lot of money is being pumped into the alternative energy sector right now, and major institutional investors have about 93% holdings in Cree. Basically, this company is not an unknown or venture capitalist start-up that will add huge risk to a portfolio.
Cree is the leader in LED lighting, and as such, has protected its position as the most cutting-edge technology in this arena. The technology faces pricing issues, as any increased competition means that the company must reduce the sale price of some of these lighting products. However, the company still has made tremendous strides in turning the world on to this particular lighting technology. As I said, alternatives in energy and the reduction of Americans’ energy use remain highly charged emotional issues. Whatever changes eventually occur, no one is denying that the changes are absolutely necessary and are inevitable. Many happy returns of the day, Loretta Source : TFN
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