Wednesday, January 14, 2009

Lighting Stock Review

There is value in companies that help people and businesses save money by using energy more efficiently. The stock belonging to companies associated with energy efficiency will benefit from the recession. Here are a few companies that specialize in energy efficient lighting.

Koninklijke Philips Electronics (NYSE:PHG): Koninklijke Philips Electronics N.V. (Royal Philips Electronics) is the parent company of the Philips Group (Philips). As of January 1, 2008, Philips’ activities are organized on a sector basis, with Lighting being one of the 3 key sectors. World leaders in energy efficient lighting, Philips has an operating cash flow of $1.7 Billion, with $3.3 Billion on hand. Philips continued acquisition of other lighting firms at reduced prices will cement their world leadership in efficient lighting.

Cree, Inc. (NASD: CREE). Cree is a leader in bright white LEDs, with no debt, and an operating cash flow of $312 million. Despite a major customer's difficulties, Cree should be able to weather this financial storm. Cree may even persue some small acquisitions.

Lighting Science Group (LSCG.OB): A manufacturer of LED fixtures. Although they have good products in an industry poised for explosive growth, Lighting Science is struggling to keep its head above water. The company has a twelve month operating cash loss of $19M. Despite the positive outcome of a patent case with Philips and resolution of a dispute with the former CEO, Lighting Science will need help to survive the tight credit market ahead.

The lighting industry is poised for explosive growth over the next couple of years. However, in today's tight credit market, when assessing a stock, consider liquidity ratios.

Next: Geothermal Stock Review

1 comment:

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Best wishes, Ron Robins