If you’ve been shopping for light bulbs lately, you know that the old-fashioned tungsten light bulb is a thing of the past.
In 2007, Congress, along with President Bush, effectively banned tungsten light bulbs by passing a law that required energy efficiency far in excess of what the old tungstens could deliver.
Unfortunately, the initial replacement – compact fluorescents – cast an ugly shade of light, flickered, and faded over time. On top of that, they contained mercury, a dangerous heavy metal. The EPA’s instructions for cleaning up a broken CFL bulb run to almost a thousand words!
But the government loved them, so for a time, we were stuck with them.
Today, though, another alternative – called light-emitting Diodes (LEDs) – is set to become the king of light bulbs.
A Brilliant Opportunity
Cree, Inc. (CREE), headquartered in North Carolina, is the leading company in the LED business. Cree has spent years making LEDs for specialty applications such as flashlights, outdoor lighting, and floodlights. And it’s successfully competed against lower-cost Chinese competitors by being a technology leader.
CREE’s stock is volatile, as we’ve seen over the past few months when the price took a nearly 50% dive. But the company has a good balance sheet, is solidly profitable, and is well managed.
Best of all, Cree just announced the next-generation LED light bulb, something it hinted at on an earnings conference call last week. The new bulb is at a lower price point than the old bulb, looks more like a regular bulb, creates better light, is fully dimmable, and uses only 11 watts to create the same light as the old 60-watt bulbs.
This light is so new, in fact, that it’s not even on shelves yet. Not to worry, though. Cree has an exclusive deal with Home Depot (HD), and the bulbs should be on the shelves next week.
For now, you should do two things.
First, you should pre-order one of these bulbs on Home Depot’s website. I’ve got the prior generation bulbs, and I’m very happy with them. The new ones should be even better, and at $7.97, can save you $100 or more over the life of the bulb. I’m confident that after you install one of these, you’ll replace every light in your house.
Secondly, you should buy some CREE stock. It’s up almost 15% from recent lows on the announcement of the new bulbs, but is still well off the levels where it traded before the early-October stock market swoon (and the company’s earnings disappointment).
These lights are going to be a big hit, and you can expect more from this technology leader in the future, like brighter bulbs at the low price point.
Bottom line: Save $100 per light in your house, and make even more by investing in the company itself. What could be brighter than that?