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The LED Lighting Space is on the Move (CREE, IVST, AYI)

 

As markets become more volatile in 2018, and the price of energy trends sharply higher, many traders and investors find themselves in search of growth in the rapidly expanding LED lighting space. With tensions rising in the Middle East and the easy money still flowing from central banks, it’s no wonder that economists are on the lookout for inflation.

LED lighting has the potential to revolutionize the energy cost structure for large commercial complexes as well as in everyday use. We’re going to look at several key growth names in the space today to help traders and investors in search of idea generation around this theme.

Cree, Inc. (NASDAQ:CREE) provides lighting-class light emitting diode (LED), lighting, and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, South Korea, Japan, Malaysia, Taiwan, and internationally. Its Lighting Products segment offers LED lighting systems and bulbs for use in settings, such as office and retail space, restaurants and hospitality, schools and universities, manufacturing, healthcare, airports, municipal, residential, street lighting and parking structures, and other applications. This segment sells its products to distributors, retailers, and customers.

The company’s LED Products segment provides blue and green LED chip products for use in various applications, including video screens, gaming displays, function indicator lights and automotive backlights, headlamps, and directional indicators. It also offers XLamp LED components and LED modules for lighting applications; and surface mount and through-hole packaged LED products for video, signage, general illumination, transportation, gaming, and specialty lighting applications. Its Wolfspeed segment provides silicon carbide (SiC) materials for RF, power switching, gemstones, and other applications. This segment also offers SiC-based power products consisting of SiC Schottky diodes, metal se oxide miconductor field-effect transistors, power modules, and gate driver boards for use in power supplies used in computer servers, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. In addition, this segment provides gallium nitride (GaN) die, high electron mobility transistors (HEMTs) and monolithic microwave integrated circuits (MMICs) for military, telecom, and other commercial applications; and custom die manufacturing services for GaN HEMTs and MMICs.

Cree, Inc. was founded in 1987 and is headquartered in Durham, North Carolina.GCAP shares have been outperforming most blockchain related plays over the past 6 weeks. The stock continues to hold onto upward momentum in place since late March. Since its lows under $6.50 per share last month, we have seen a rally in the stock of over 30% on strong volume to retake all of its major moving averages on the bullish side and break out to new multi-month highs. At this point, traders are looking for signs that the stock will be able to hold onto its recent gains and breakout even higher.

As far as action, the stock has been breaking out over the last few weeks, logging and new multiyear high so far this month. Shares of CREE have more than doubled in the past 9 months, which is suggestive of the trend in this space as much as anything else.


Innovest Global, Inc. (OTCMKTS:IVST) is actually in a slightly different position than the other names on this list. This stock is actually a conglomerate, which means they have their fingers on lots of different buttons and not just the LED lighting space.

For example, the company just announced that its Call Center has won a $650,000 contract as the exclusive provider for an industry leading medical supply division of a Fortune 500 company with over $2 billion in annual revenue. The contract provides for the service to exceed $1mm in billings in the first twelve months.

That said, the company also has a strong interest in the LED lighting space.

IVST is a far less well-known play, but may be one of the better bargains given that shares of the stock are trading at just a quarter a piece at this point. In recent action, we’ve seen this stock do two important things: establish confirmation of critical support around the $0.20 per share level, and establish and hold its new and emerging bullish uptrend line. It’s important to understand that this action comes in the context of an existing longer-term uptrend that got its start around the beginning of this year.

In other words, this recent show of support represents a higher low in the context of the stocks longer-term action.

Acuity Brands, Inc. (NYSE:AYI) provides lighting and building management solutions and services for commercial, institutional, industrial, infrastructure, and residential applications in North America and internationally.

The company offers lighting and controls products and solutions, such as recessed, surface, and suspended lighting; down, decorative, emergency and exit, track, day, special-use, street and roadway, parking garage, landscape, and underwater lighting; area pedestrian, flood, and decorative site lighting; occupancy sensors; photo controls; relay panels; architectural dimming panels; and integrated lighting controls systems. It also provides modular wiring products, light emitting diode drivers, glass products, and inverters; and services across applications that primarily relate to monitoring and controlling lighting systems through network technologies and the commissioning of control systems.

The company markets its products under the Lithonia Lighting, Holophane, Peerless, Gotham, Mark Architectural Lighting, Winona Lighting, Juno, Indy, Aculux, Healthcare Lighting, Hydrel, American Electric Lighting, Carandini, Antique Street Lamps, Sunoptics, RELOC Wiring Solutions, eldoLED, Distech Controls, Acuity Controls, and Atrius brand names. It serves electrical distributors, retail home improvement centers, electric utilities, lighting showrooms, national accounts, government entities and municipalities, original equipment manufacturers, value-added resellers, utility distributors, system integrators, developers, and energy service companies, as well as new construction, renovation, and maintenance and repair markets.

AYI shares are coming off of a deep bearish pivot marking out support from early May on a test of the $110 per share level. However, since that low, this stock has been nothing but upside, rocketing is much as 9% in the last 10 days. The move off the lows has also taken the stock back above its 20-period exponential moving average as well as its early April lows.

 

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