Cree introduces brighter street lights

The new LEDs add to a compelling case for long-term efficiency.

By TheStockAdvisors Apr 11, 2012 3:45PM
Image: Providence, Rhode Island (© Kenneth C. Zirkel/Photodisc/Getty Images)By Geoffrey Seiler, BullMarket.com

Shares of Cree (CREE) got a nice boost after the LED company introduced a street light that uses less energy and produces more light.

The XSP Series LED street lights use nearly 50% less energy and are designed to last more than three times longer than high-pressure sodium street lighting. More importantly, when bought in volume, the new lights will cost around $200 per light, which, when maintenance and energy costs are included, will be on par with the high-pressure sodium street lights.

Traditional street lights cost only $10 a bulb, but it costs about $200 to install them, former Anchorage, Alaska, street-light official Michael Barber told The Wall Street Journal.

The new Cree lights use half the number of LEDs as older models but produce double the amount of light, as measured in lumens, for the same price. Cree ascribed the better performance to improvements in its proprietary silicon carbide technology.

"Everybody knew that the time will come, and it looks like that time has come," Nadarajah Narendran, the director of the Lighting Research Center at Rensselaer Polytechnic Institute in New York, told the Journal. "That will further accelerate market adoption for LED street lights."

Reaching the point where the overall cost to install LEDs is nearly on par with that of traditional lighting is a major milestone.

Steet lights, while making up only about 1% of U.S. electricity use, are still a very big market. This type of inflection point should really start to drive LED adoption.

While the latest announcement is only for street lights, we would expect the industry to start to see similar inflection points for other applications as LED prices continue to come down.

Overall, we believe the LED lighting industry is in the very early innings of what is likely be a 10-to-15-year secular growth story. Cree is a clear price and technological leader, and it is the best-positioned company to benefit from this upcoming secular trend.

While the company is still likely experiencing some of the after-effects of the LED industry glut, which could show up in its first-quarter earnings report, we continue to think Cree's long-term prospects remain very bright.

Related articles

Tags: CREE
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

108
108 rated 1
257
257 rated 2
439
439 rated 3
626
626 rated 4
499
499 rated 5
530
530 rated 6
713
713 rated 7
522
522 rated 8
339
339 rated 9
136
136 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
SWNSOUTHWESTERN ENERGY COMPANY10
TAT&T Inc9
COPCONOCOPHILLIPS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.