Does Barack Obama Care if You Know This Company’s Name?

Scoping out the Oxford Club's Latest Lighting Teaser

By Travis Johnson, Stock Gumshoe, September 30, 2013

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Um, no.

That’s just stupid.

But it is the subject line of the latest teaser pitch from the Oxford Club for their membership and their Communique newsletter — the subject reads, “The One Stock Obama Doesn’t Want You to Know About.”

Why? Well, it’s not even really implied in the ad message that follows — which is about the banning of incandescent light bulbs as a national energy-saving plan.

But they’re teasing a company that they say has the manufacturing chops to manufacture the new, more efficient light bulbs that will be needed more inexpensively. Is that what’s supposed to make President Obama want you to be “in the dark” about the name of the company? I don’t get it.

OK, fine, I do get it: The folks at the Oxford Club are no dummies, and if you say something inflammatory about President Obama in your subject line it means there’s a better chance that your email will be opened — particularly by the grouchy, older, relatively well-off white men who tend to be Republican, and who are the core readership for all investment newsletters.

It’s not just Obama, of course — they did the same thing with George Bush before him, and Bill Clinton before that. Apparently polarizing political figures make people want to open their email.

Does the President want the maker of efficient light bulbs to be secret? Don’t be stupid. If he thinks about them at all (I’m guessing he’s a bit too busy, frankly), he’s wanting the free market to do what the free market does: Allow room for innovation within a regulatory framework, and use regulations to spur demand for more energy efficient products (like tax breaks for Energy Star appliances, or auto fuel efficiency standards), which tends to help increase efficiency and lower prices as volumes climb.

But that’s beside the point — I just can’t resist a little blather. And yes, I know, you have strong feelings about Obama, or Bush, or light bulbs. If you insist on sharing those feelings, you can do so in the comment box below. Those feelings are irrelevant to the current teaser that I will get to starting … now:

“You may have heard that the government is banning the 100-watt light bulb… And very soon the 75-, 60- and 40-watt bulbs as well.

“Now, some people think that a light bulb is trivial, but we believe Americans can decide how to light our homes just fine on our own.

“And now the government is trying to take away our choices.

“But one small company is saving Americans from the dreaded ‘light bulb law’

“While competitors are lobbying to force Americans to buy their bulbs, this company has instead created a better bulb that consumers will want anyway.

“It’s competing its way to bigger profits, instead of lobbying for them.”

So who is this light bulb innovator? Apparently they’ve developed a product that is …

“… 78% more efficient than an ordinary bulb and lasts 25 times longer… Saving the average homeowner about $6,975.”

And it’s making the bulbs cheaper, we’re told:

“this company is changing the game…

“It’s developed a way to mass-produce the product and sell it much cheaper than anything on the market.

“Yet most American’s have never heard of the company… It’s a small manufacturer that’s seemingly coming out of nowhere.

“Though this company is less than 3% of the size of General Electric, its sales are growing seven times faster.”

Not a lot of clues, right? I can guess at the name just from the gist of the ad … but since they also include a chart showing how spectacularly this stock has done already, we can use that as a clue as well — here’s a clip of the chart:

creechart

Which means, sez the Thinkolator, this “secret” stock is … Cree (CREE).

Which, if you’ll notice that recent dip in the chart, scared the heck out of its investors on August 13 — not because the earnings were bad, they weren’t, but because it’s a pricey stock that’s been driven by the hot story of LED lighting, and the CEO gave what most are interpreting as lowball guidance.

And … well, that’s about all I know about CREE — this is the kind of company that often does well, with a huge market opportunity as lighting becomes more efficient and their LED bulbs achieve greater economics of scale and get more cost-competitive with fluorescent or halogen bulbs even before energy savings, but I don’t know much about the specifics of the market right now, the speed of the changeover, or the business itself.

They are trading at about 25X next year’s expected earnings, and analysts think their earnings will climb by 15-20% this year and next, so that’s reasonable — I guess the reason to buy this one is if you think the analysts are underestimating the growth potential and believe that their earnings growth will stay on the same torrid pace of the last year, if that’s how it works out then CREE is cheap. If the earnings growth slows down as is expected, it’s probably a little expensive.

I clearly don’t know enough about this one to buy or sell it, so I’ll toss it out to the great Gumshoe Faithful — what do you think? Did we get a buying opportunity when the stock fell 20% in August, or is it still too expensive? Let us know with a comment below.


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47 Comments on "Does Barack Obama Care if You Know This Company’s Name?"

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mrmurph
Irregular
0
mrmurph
September 30, 2013 2:30 pm

I’m not THAT grouchy !

LostOkie
Irregular
112
LostOkie
October 1, 2013 1:32 am

I am!! hahaha

johnsmither
Irregular
0
johnsmither
September 30, 2013 2:49 pm

I was just out shopping for LED bulbs at a local big box. I didn’t see any price difference between Cree and the other large well known manufucturer. Not sure what is so ground breaking about them.

Hank
Guest
0
Hank
September 30, 2013 3:07 pm

I thought it might be Cree when I saw the teaser.

Cree is a decent trading vehicle.
It goes up on Momnetum, and it goes down.
But as for a long term investment? I don’t know what the rewards might be, but the risks would be too high for me as a buy it and hope I can forget it stock. .

John
Guest
0
John
September 30, 2013 3:09 pm

Thanks for covering this! I received the email and was going to do a little research, but the weekend got away from me.

Perry
Guest
0
Perry
September 30, 2013 3:09 pm
Thanks Travis, another mystery solved. I am with you, why would B. Obama care one whit about whether or not you know about this. The whole lightbulb thing predates him by at least 4 years anyway. These guy who write all this stuff are really making me tired. Their line of stuff gets longer and longer all the while saying less and less. There is one daily that I am about to cancel simply because they spend an incredible amount of time telling me how great their picks were a month or so ago. Thank you for digesting all this… Read more »
philkalasz
Irregular
0
philkalasz
September 30, 2013 3:09 pm

I buy led’s as much as possible, but I’m just weird that way. Also, fluorescent bulbs are a hazard if they break. Outside of my pro led stand, don’t know if the amount of time you would have to hold onto the stock to make it worth it is worth it like a tsla….

Allan
Guest
0
Allan
September 30, 2013 3:30 pm

Thank you Gumshoe, third time you have saved me from another “Sure thing”.

john
Guest
0
john
September 30, 2013 3:34 pm

CREE has been touted for the past two years.. Nothing new,, I do think it has promise and upside,,, I might wait for a correction..

dennis
Guest
0
dennis
September 30, 2013 3:39 pm

CREE just recalled tens of thousands of Faulty de-humidifiers……and promised to re-imburse ALL the owners of there faulty units {fire}…….This could be a big problem for them.

dennis
Guest
0
dennis
September 30, 2013 3:42 pm

MY bad….the company is GREE…not CREE.

LostOkie
Irregular
112
LostOkie
October 1, 2013 1:36 am

Ahh Gree, , A Chinese Company
Surprised?

Brison
Guest
0
Brison
September 30, 2013 3:46 pm

Typo correction….. “recent” !
Obama campaigned at the North Carolina CREE home plant several times.
BTW, wasn’t CREE largely bought out by China after one of our recent presidents basically gifted America’s lightbulb industry to China?

Joan in Houston
Guest
0
Joan in Houston
September 30, 2013 3:59 pm

I am disinterested in the stock but I did buy some of their lightbulbs a couple weekends ago. They cost less than the stock.

baygreen
Member
32
September 30, 2013 4:34 pm

Travis this is good makes me think the White House will be on candle power after the shutdown, and like another irregular I think it is not on top of Obama’s things to do. Maybe they will put GE out of business. Just kidding good article now I just have to wait to see how many people it will take to screw one in. Take care of the thinkolater!

Ventureshadow
Guest
0
Ventureshadow
September 30, 2013 5:00 pm
Its sexy story has made Cree gist for newsletter writers for about 15 years. Yahoo doesn’t show more than 2 years of stock prices but Google finance shows prices since 1993. It was under a dollar in 1994. It spiked to 97 in 2000, fell to about 20, spiked again in 2010 to 79, fell to 20 again, spiked to 75 this year, fell to 56 and is now about 60. I expect that Tobin Smith, BI Research, and other newsletters are somewhat responsible for these bubbles. Its bubbly history is not attractive. Moreover, I bought LED bulbs directly from… Read more »
Gary W
Guest
0
Gary W
September 30, 2013 8:12 pm

I agree with everything you say! Thumbs down on CREE except probably a hair-raising trading vehicle if you can’t find anything better 🙂

johnkinfw
Irregular
8
johnkinfw
January 22, 2014 10:19 am
The problem with CFLs is not the tiny amount of mercury in an individual bulb. The problem is the huge number of them being produced to fill the void created by the ban on incandescent bulbs. Think: billions of these in landfills, eventually mercury-poisoning the ground and ground water. It is like so many liberal-backed plans to save the environment – short-sighted and at least a little stupid (and sometimes a whole lot). They hate CO2, so they promote nuclear, leaving us with huge dumping of long-term radioactive wastes, many of which are now leaking. As to either LED or… Read more »
John Harris
Guest
0
John Harris
September 30, 2013 6:40 pm
Well I believe in LED lighting as eventually possibly taking over most fluorescent and incandescant lighting (but not all – what no bubble lights on the Christmas tree? they are incandescent to make the heat to bubble). And I have owned a small position of CREE since 2000 and seen it go in the toilet twice. But it is back above what I paid for it so I will hold it. The issue is not if but when. Eventually all these 4 and 8 foot fluorescent lamps in offices and factories will be replaced by more efficient lighting and LED’s… Read more »
Sue
Guest
0
Sue
September 30, 2013 8:18 pm

Thank You. Was wondering if it was CREE, but did not open that email. I have a personal policy of not opening emails that mention presidents, maybe because I’m a grouchy, middle-aged, white, female, who is politically independent. Cree does tend to bounce a lot over time; scares me a bit.

frankw17
Irregular
652
September 30, 2013 8:32 pm

I didn’t see any mention about CREE providing LED street lights. There is a fairly substantial
movement going on currently to convert street lights to LED’s to save on electrical expenses by municipalities. Does anyone know if CREE is delivering product for this market?

Dean s
Guest
0
Dean s
September 30, 2013 8:55 pm

A fourth option is esl. Electon stimulated luminescent. A new bulb which is essentially an old tv. An electron beam is directed to a phosphor coating. Cost is less than led but more than flouresent. life and energy efficiency are in between as well.

The company is vue1. Long shot to survive, deep in debt and just starting to produce bulbs. But if they survive it could payoff big.

Disclosure I have a small position.

Uncle Bill
Guest
0
Uncle Bill
September 30, 2013 9:30 pm

I really like LEDs. The technology is really cooking and, as always, when technology moves quickly, prices get better for us consumers. But that’s it. Every electric co. in the world makes LEDs. What makes these guys so special? Nothing. Yet another line of BS from yet another BS newsletter salesman….

Slick Rick
Guest
0
Slick Rick
September 30, 2013 9:31 pm

Keep the LED lights and those lousy curly lights…….bring back the old G.E. Soft 100 watt bulb. Nice soft light and excellent for reading .

irvc
Member
0
irvc
September 30, 2013 10:53 pm
I HAVE OWNED CREE FOR SEVERAL YEARS. THIS PAST YEAR ITS PRICE HAS GONE FROM A LOW OF 24.50 TO A HIGH OF 76 AND IS NOW 60.19. THERE WAS A SELL-OFF THIS PAST AUGUST DUE TO THE COMPANY’S FIRST QUARTER EARNINGS GUIDANCE CAME IN ..BELOW ANALYSTS’ CONCENSUS ESTIMATES. IT IS A DECENT ENOUGH COMPANY WITH GOOD GROWTH PROSPECTS, NO LONG-TERM DEBT AND 82% OF ITS STOCK IS HELD BY INSTITUTIONS. IT PAYS NO DIVIDEND, HAS A HIGH TRAILING 12 MONTH’S P/E RATIO AND IS NOT RATED A BUY AT ITS CURRENT PRICE. I AM HOLDING ON TO MY STOCK… Read more »
blackjack
Guest
0
blackjack
October 1, 2013 12:27 am

yes keep buying the LED as its good for the rare earths market
thank you all

Roy Cooper
Guest
0
Roy Cooper
October 1, 2013 4:56 am

ROE 3.1%, PE 81.7 – Forget it

vivian lewis
Guest
0
October 1, 2013 8:46 am

A note from England where I am currently visiting. One thing you notice on the highways here is that there are solar panels over the lights and lit direction indicators–in rainy Britain. This eliminates the need to run wires alongside the road to light them. If the US ever gets out of its excessive and politicized fear of deficit spending and we start upgrading our infrastructure we might learn from the Brits about how to light the new roads we desperately need.
But first we have to resolve the sequester.
from a grumpy left-leaning senior female

Hank
Guest
0
Hank
October 1, 2013 9:09 am
In this discussion about LED lights I’d like to add a bit about things that are not commonly understood about them. And also other lighting options. 1) The LEDs them selves do not burn out. The power supply devices do. The power supply devices can be an issue. The LEDs that you simply screw into a socket, have a built-in power supply. 2) the LEDs do not fail like a incadecent bulb or flourecent, they get dimmer with time. So you have to replace them when they are only 90% or 80%, or 70% or some other % of their… Read more »
Hank
Guest
0
Hank
October 1, 2013 9:23 am

And in the Middle Atalntic States, there are quite a few solar panel powered devices along non-urban stretches of Interstate Highways. A simple case of economics. In fact that is were Photo-electric solar powere actually makes sense almost always: Remote locations, even in the north. .

mick
Guest
0
October 1, 2013 9:45 am

wouldn’t a equipment maker for LEDS and solar be a better play,such as vecco instructments (veco)/

Bob
Guest
0
Bob
October 1, 2013 12:56 pm

Cree was founded by the same guy (recently deceased) who also founded the long gone and failed company, World Com.

Harley
Guest
0
Harley
October 1, 2013 2:29 pm

It was CREE. Great timing. Too bad I didn’t buy, the way it goes

budp
Member
0
budp
October 1, 2013 7:32 pm

L can’t handle the spectral content of LED’s, Florescence’s, or Halogen lamps. So, I am on a buying spree of incandescent bulbs. Figure I have enough to last till I can’t remember what the problem was all about….

advantedges
Member
56
advantedges
October 2, 2013 5:00 pm
So Travis, Have you seen the Oxford Club’s latest teaser from ALEXANDER GREEN regarding the TRADE of theCENTURY? Dear Oxford Communiqué Subscriber, The gains are, in a word, staggering. In late March 2009, at the depths of the global credit crisis, one man and his wife made a special kind of stock purchase. To say they knew what they were doing would be a ridiculous understatement. Because they’ve since made an average profit of $412,569 a day on that trade… every day, for the past four years! All told, their purchase is now worth over $600 million. Some are calling… Read more »
TexasJB
Guest
0
TexasJB
October 3, 2013 4:38 pm

Could this be another plug for the put selling strategy?

who noze
Guest
0
October 5, 2013 1:53 pm

botton line LET THERE BE LIGHT

TOM C.
Guest
0
TOM C.
October 5, 2013 3:45 pm
CREE has been a leader in LED technology for a very long time, but I have been disappointed in the company’s inability to convert its technological advantages into a business model that works. Look at the smallest typical lightbulbs… those used for flashlights. Look into the specs for those super high tech and incredibly expensive “tactical” flashlights, including those that attach to the barrel of a gun, and you will probably find a Cree LED as the source of light. High efficiency, high durability, low power consumption, and rendering of precise spectra combine into one brand,,, Cree. I fianally found… Read more »
Leon Talley
Guest
0
Leon Talley
October 5, 2013 4:10 pm

I made two purchases of this stock (5/7/13 and 8/27/13) with an average cost of $58.08 per share. With the current price as of 10/4/13 of 72.71, I have a nice short term gain. I like the stock’s potential.

Daver
Guest
0
Daver
October 5, 2013 6:54 pm
I recently bought a few lots of CREE, but hedged my bets by selling near the money and short in time call options against them. Also, I echo the comments of others who have noted that CREE appears to be a or the technical leader in LEDs at present. I thought it very interesting when a couple of years ago Festool introduced a new and quite expensive battery powered light at $175 when I learned that Festool chose CREE LEDs for that product given that Germany has its own world class lighting companies. I, too, long for the soon to… Read more »
Myron Martin
Author
208
October 6, 2013 7:37 am
Maybe this will label me as a “conspiracy theorist” but really , all I do is think outside the box. Has anybody considered the fact that our fractional reserve banking system requires a constant stream of new borrowing to keep that Ponzi scheme alive? After all, “every bank loan is a new creation of money and when it is paid back it ceases too exist” Sworn testimony of Canada’s Central Bank Governor Graham Towers before Parliament in 1939 and the result should be obvious? NEW LOANS have to be contracted constantly to provide liquidity to the system as old ones… Read more »
c
Guest
0
c
October 7, 2013 1:48 am
WOW Myron!! I am greatly relieved to learn that the fractional reserve/federal reserve system is on the brink of collapse by natural causes! For years now – decades really – I’ve been fretting that we would somehow have to extricate OURSELVES from their death-grip and after the roundup/execution of most peaceful anti-tax activists in the previous century, I seriously feared that militancy was the only remaining option and not a good one at that…more like a martyrdom really! So, please DO enlighten us as to how this natural demise of the tax-backed, government-supported, police-state bankers’ control of world economics will… Read more »
Myron Martin
Author
208
October 11, 2013 12:40 am
It may still take awhile for the whole scenario to play out, but it is a mathematical certainty that the debt pyramid created by the Ponzi scheme known as fractional reserve banking will eventually collapse of its own flaws as pyramids always do. Eventually you run out of people, corporations and governments able to provide collateral for additional loans. The easiest way I know to follow the systemic collapse of the system is to read all the daily interviews posted on KING WORLD NEWS with some of the top financial minds in the world with impeccable credentials. Unfortunately the most… Read more »
dcinvest
Irregular
22
dcinvest
November 12, 2013 10:33 pm

Since the Oxford letter was pushing CREE I have been checking in to the charts to see if there is a correlation of price movement off the Bollinger Bands that would help predict any change of direction. The only excitement I have seen, the waves look like a Hawaiian surfers dream in which a few have been know to die. GLTA who can trade this stock. I chose to pass on selling puts for a more predictable trend.

pluved
Guest
0
pluved
November 2, 2014 3:46 am

The cycle has come for CREE again… another rounds of lows hitting $20-$30 ranges in recent weeks… Light at the end of the tunnel?

Myron Martin
Guest
0
November 2, 2014 12:40 pm
What goes around comes around. Thanks pluved for pointing out that the patient investor usually gets an opportunity to “buy low” the impatient investor on the other hand is likely to allow emotion to induce them to buy at HIGHS because they fear missing out on a hot stock. Not saying CREE in the $20’s is a good investment because I do not know the stock well enough to make a judgement on whether the lower price is deserved in terms of company performance and consumer perception of the quality of the products, but a half price sale is certainly… Read more »
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