Monday, March 11, 2013

A Stock With Potential Triple-Digit Returns

Last year, Americans purchased over 4 billion light bulbs, according to the U.S. department of Energy. With recent legislative changes ensuring future use of more energy-efficient lighting solutions, IMS Research expects sales of LED bulbs will become a $10 billion market by 2015.

According to the New York Times, about 33 million LED light bulbs were sold in 2012. Within about four years, purchases will likely increase 1,000%, to more than 370 million LED bulbs!

While many LED manufactures are benefiting from this lighting boom, one public company in particular is profiting -- international LED and semiconductor manufacturer, CREE (Nasdaq: CREE).

CREE boasts an outstanding fundamental outlook and is backed by highly bullish technicals. This year alone, the stock already increased about 45%! But, as I explain below, the technicals point to much further growth potential ahead.

Helping drive the stock is recent news CREE developed what management terms a "game-changing" LED bulb. This bulb, which fits into any standard lighting receptacle, is designed to last up to 25,000 hours -- that's 25 times longer than a traditional incandescent bulb! In fact, CREE is so confident in its technology, the bulb comes with a ten-year warranty.

Up till now, LED bulbs have been expensive. But, CREE's new light bulb -- sold exclusively at Home Depot (NYSE: HD) -- will go for just under $10. Best yet, the bulb is expected generate 84% more energy savings than a traditional light bulb. And, unlike many current compact fluorescent bulbs, there won't be any lag-time when the light is turned on. Instead, it will illuminate instantly. The color is also said to be soft and warm, which until now, has been difficult to achieve through LED lighting.

From a technical perspective, shareholders certainly appear bright-eyed.
At the beginning of 2013, the stock traded just over $30. In less than three months, it has jumped over $20 and shows no signs of slowing down. Shares currently appear to be bullishly emerging out of a multi-year basing pattern.  (more)
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