Now Is A Suitable Moment For A Long-Term Purchase Of Cree Inc. (NASDAQ: CREE)


Capital Research & Management Co. recently announced the acquisition of new stake in Cree Inc. (NASDAQ:CREE). The institutional investor has increased its shareholding in the Technology company by 21.33% to 13.24 million shares with purchase of 2.33 million shares. This fresh investment now brings its stake to 12.24% valued currently at $783.56 million. In addition, The Vanguard Group, Inc. raised its holdings by 0.16 million to 10.12 million shares. And ClearBridge Investments LLC has lifted its position by 1.39% or 0.12 million shares – to 8.99 million shares.

With over 1.54 million Cree Inc. (CREE) shares trading Wednesday and a closing price of $66.25 on the day, the dollar volume was approximately $101.88 million. The shares have shown a positive weekly performance of 9.00% and its price on 07/15/20 gained nearly 2.97%. Currently, there are 108.12M common shares owned by the public and among those 107.45M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 14 analysts who have offered their price forecasts for CREE have a consensus price objective of $55.31. The analysts have set the share’s price value over the next 12 months at a high of $74.00 and a low of $33.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Cree Inc. stock is 2.70 for the next 12 months. The average price target is -27.4% below its last price level and a downside to the estimated low will see the stock lose -100.76% over that period. But an upside of 10.47% will see the stock hit the forecast high price target while mean target price for the stock is $55.00.

Insiders at the company have transacted a total of 28 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 22 of these insider trades were purchases, accounting for 193,205 shares. Insider sales of the common stock occurred on 6 occasions, with total insider shares sold totaling 47,510 shares.

The top 3 mutual fund holders in Cree Inc. are American Funds Small Cap World Fu, ClearBridge Aggressive Growth Fun, and American Funds New Economy Fund. American Funds Small Cap World Fu owns 4.99 million shares of the company’s stock, all valued at over $295.25 million. The company bought an additional 0.4 million shares recently to bring their total holdings to about 4.61% of the shares outstanding. American Funds New Economy Fund bought 0.18 million shares to bring its total holdings to over 3.41 million shares at a value of $201.86 million. American Funds New Economy Fund now owns shares totaling to 3.15% of the shares outstanding.

Shares of Cree Inc. (NASDAQ: CREE) opened at $64.64, up $0.3 from a prior closing price of $64.34. However, the script later closed the day at $66.25, up 2.97%. The company’s stock has a 5-day price change of 9.00% and 70.79% over the past three months. CREE shares are trading 43.55% year to date (YTD), with the 12-month market performance up to 11.89% higher. It has a 12-month low price of $27.77 and touched a high of $65.53 over the same period. Currently, 1.54 million shares have been traded, compared to an average intraday trading volume of 1.63 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 10.26%, 20.53%, and 40.22% respectively.

Institutional ownership of Cree Inc. (NASDAQ: CREE) shares accounts for 97.91% of the company’s 108.12M shares outstanding. Mutual fund holders own 4.10%, while other institutional holders and individual stakeholders account for 65.35% and 34.25% respectively.

It has a market capitalization of $7.09B and a beta (3y monthly) value of 1.13. The earnings-per-share (ttm) stands at -$1.74. Price movements for the stock have been influenced by the stock’s volatility, which stands at 5.62% over the week and 3.81% over the month.

Analysts forecast that Cree Inc. (CREE) will achieve an EPS of -$0.19 for the current quarter, -$0.13 for the next quarter and -$0.32 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.23 while analysts give the company a high EPS estimate of -$0.14. Comparatively, EPS for the current quarter was $0.11 a year ago. Earnings per share for the fiscal year are expected to decrease by -237.20%, and 39.60% over the next financial year.

Looking at the support for the CREE, a number of firms have released research notes about the stock. Morgan Stanley stated their Overweight rating for the stock in a research note on June 16, 2020, with the firm’s price target at $54-$68. Goldman coverage for the Cree Inc. (CREE) stock in a research note released on June 10, 2020 offered a Neutral rating with a price target of $56. JMP Securities was of a view on May 26, 2020 that the stock is Mkt Outperform, while JP Morgan gave the stock Neutral rating on May 20, 2020, issuing a price target of $40- $60. Piper Sandler on their part issued Neutral rating on April 01, 2020.


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