Cree, Inc. (CREE), General Electric Company (GE), And One Key Point To Watch: How This Stock Can Brighten Your Portfolio & Home

It is this differentiation and specialization that has enabled Cree to stand toe-to-toe with these giants and carve its position in the fast growing LED market. For instance, even though Philips recently took covers off an LED lamp which it calls the “world’s most energy-efficient,” and which is expected to be twice as efficient as current LEDs. However, Koninklijke Philips Electronics NV (ADR) (NYSE:PHG) expects the product to go on sale in 2015, which seems a bit late.

Similarly, General Electric Company (NYSE:GE)’s efforts at LED lighting are worth noting, but still not as great as Cree. GE’s own 40-watt incandescent replacement bulb costs around $40 on Amazon (it was $20 last week), with the price not even close to Cree’s offering even at other places where it could be bought cheaper. The gripe over the high cost is clearly seen in the customer reviews, and I believe that Cree is in a better position than both GE and Koninklijke Philips Electronics NV (ADR) (NYSE:PHG) to capture the home lighting market.

The bottom line

Cree, Inc. (NASDAQ:CREE)’s specialization in LEDs makes it among the best ways to play the rapid growth in this industry. The company is highly focused on delivering the most efficient products at the cheapest cost, and is looking to make its presence felt through aggressive marketing. Considering all these factors, Cree is still a buy at these levels despite having a high trailing P/E multiple.

For comparison’s sake, if a company such as Amazon.com, Inc. (NASDAQ:AMZN) can trade at sky high valuations and have razor thin margins, then I believe Cree’s valuation is justified as it has no debt, has ample cash, sports better profitability margins, and is a part of a rapidly growing LED industry.

The article How This Company Can Light Up Your Home and Your Portfolio originally appeared on Fool.com.

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