EARN25

Rallying Cree Stock Gets a Rare Bull Note

Cree will report earnings in a couple weeks

Aug 3, 2018 at 10:37 AM
facebook X logo linkedin


Cree, Inc. (NASDAQ:CREE) is trading up 3.8% at $49.52, after Canaccord Genuity began coverage on the lighting expert with a "buy" rating and $61 price target, territory not seen since March 2014. In its note, the brokerage firm highlights the leadership of new CEO Greg Lowe, who it calls a "unique CEO" that leads by example. It also cites the company's shift in focus to higher value products will allow it to address the lighting market as a component supplier.

Even though CREE shares have more than doubled in the past year and hit a multi-year high of $50.68 back on June 13, they've received almost no love from the analyst community, save today's bull note, of course. In fact, just one of the nine brokerage firms in coverage have anything better than a "hold" rating before today, and the average 12-month price target sits down at $43.70. Traders should watch for more bullish attention going forward.

Meanwhile, the equity remains a strong candidate for a short squeeze. And actually, short interest rose another 24.6% in the last reporting period, and now accounts for 12.5% of the overall float. With earnings set for release in less than two weeks, a strong quarter could cause some of these bears to cover their positions.

As for options activity, volume has been light on an absolute basis, but peak open interest resides at the September 44 call. Traders, whether bullish or bearish, may want to consider Cree, however, since it's been a good target for premium buyers during the past year. That's according to its Schaeffer's Volatility Scorecard (SVS) of 80 out of 100, which shows it's tended to make much bigger-than-expected moves on the charts compared to what the options market was expecting.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!