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LED Stock Growth

Written By Brian Hicks

Posted January 8, 2008

As I told Energy and Capital readers at the tail end of December 2007, now is the opportune time to buy LED-related stocks like Cree Inc. (CREE :NASDAQ).

It was December 2007 when President Bush inked an 822-page energy measure that included a future ban on 100-watt incandescent bulbs by 2012. They’ll make way for bulbs that use 25% to 30% less energy, lop an estimated $18 billion off annual U.S. electric bills, and cut consumer electricity usage by 60%. It’s a move that’ll add upside to the likes of the LED stock mentioned above.

American Technology Corporation CEO Richard Prati agrees, saying that Cree’s LED technology will grow “astronomically” in coming years. He even believes that LED technology will proliferate like Internet companies did in the 1990s; that LED can save consumers up to 90% on energy bills; and that its “positive environmental reputation will attract consumers.”

And American Technology Research analysts believe LED lighting will “eventually replace all sources of lighting.”

That’s a lot of lighting, and monstrous potential for Cree.

LED Stock Growth: Six-Year, 388% Industry Growth Expected

We’re not talking about small industry growth either. In 2005, the LED industry was valued at $205 million. By 2011, it could be valued as high as $1 billion–388% growth in six short years.

How can you or any other investor or company pass up that opportunity? Philips Electronics isn’t. Philips just announced it was buying Genlyte for $2.7 billion as part of its LED-related buying spree, as it builds market share against General Electric.

Who knows, maybe it’ll put pressure on GE to buy a company like Cree. Would it be a shock if a company wanting to guarantee a supply of LED came forward and paid Cree what it is worth? No. There’ll be plenty of demand, and possible tight supply, which will benefit Cree-like companies.

LED Stock Growth: We’re Not the Only Ones That See the LED Potential

Walt Disney World has changed over to LED, wiring Cinderella’s Castle with more than 20,000 LEDs and saving thousands of dollars.

The Times Square ball, fully lit with LED lighting, was twice as bright and used half the energy.

The city of Boulder, Colorado is switching to LEDs for its Downtown Pearl Street Mall.

It’s further proof of LED growth potential. You just have to pick up LED-related stocks early and cheaply enough before the Internet-type run begins.

Ian L. Cooper