GLW Video Analysis 1Q13

GLW Video Analysis 1Q13

Watch this Video analysis of Corning Incorporated (NYSE:GLW) to learn if GLW is coming back from the dead. Check out this free GLW Video Analysis to see if you can profit off this “zombie money!” Plus, you can read more about the fundamentals of GLW below…

Is GLW Breaking Out?

GLW has been dead money for the last few years, frustrating investors and traders alike. Anyone looking for a breakout in GLW has had to be very patient. So my advice (from a technical analysis perspective outlined in the GLW video analysis above) is for you to hang in a little longer. Be safe. If you’ve waited this long, another week or two won’t kill you.

GLW Fundamental Analysis: Conference Call Notes

As I mentioned in the GLW video analysis above, GLW has been dead money for the last few years. In reading the Q3 2012 GLW conference call transcript it becomes clear why GLW has stalled…

At the outset of 2012, Corning management warned share holders that Korean and Chinese market share are waning and LCD pricing pressures are increasing. So it’s not surprise Corning has been flopping around for the last year as the c-suite tries to stabilize and restore earnings growth. But hey…

At least management has a plan to manage margin deterioration. And GLW has reached agreements with key customers to stabilize pricing – this goes for both their telecom and environmental businesses – positioning the company for growth if global demand picks up. By the way…
GLW Video Analysis
While management is extremely cautious in their tone, (primarily due to macroeconomic headwinds), they are doing a respectable job reducing costs to help manage earnings. Additionally, management increased the dividend. So they’re obviously not too worried about operating cash flow. Wouldn’t you call that a positive sign?

Moving into and analysis of GLW Q4 2012 results, you can see that GLW management sounds a little bit more optimistic about their ability to reduce costs and stabilize profitability, even in volatile and competitive markets with declining worldwide demand.

In terms of revenue growth, Corning returned to year over year EPS growth (Before special charges), buoyed primarily by Gorilla Glass growth (in both volumes and margins).

GLW Fundamental Analysis – Points of Interest:

(In no particular order…)

The stock repurchase last year is also a bit of a red flag – at least they are buying up share at a price below book value (usually companies buy their shares at the peak)… I’m still a little wary and will frown on further buy backs at a higher price.

It will be interesting to see what gains we can start to see from the acquisition of Discovery Labware.

Gorilla Glass margins are improving. 1 Billion devices using Gorilla Glass. They expect further margin improvements in 2013. Wow.

The solar business (Via polysilicon demand at Hemlock semiconductor, a subsidiary of Dow Corning) is facing some serious headwinds and problems from trade disputes on solar between the US and China.

The Yen Issue, as highlighted by CFO James Flaws, “Specific to Corning, if the yen moves one point higher or lower in Q1, we estimate our sales would decrease or increase by $8 million.” Obviously given the unprecedented amounts of quantitative easing by BOJ, this is a serious consideration for long term stock investors.

For the technical analysis of GLW, remember to watch the free GLW video analysis above.

What do you think about GLW as an investment idea?

Update
4/24/2013 – GLW released Q1 earnings today, beating analyst expectations (adjusted EPS of $0.33 vs $0.31). However, revenues on the quarter came in short, at $1.80B vs. $1.96B.

Update #2 ChessNWine, formerly referenced for his fantastic technical analysis videos, has a very informative post about the RSI and MACD indicators and what it means for GLW stock prices! Read Why GLW Is No Longer Trading Like a Cornball

But that’s not all…

The GLW dividend increased from 9 to 10 cents/share. As per the article above, you’ll also notice the board approved a $2B share buyback program. I’m generally wary of share buybacks. Not always a great use of capital… So…

I need to listen to the conference call to get some more color on these decisions. I’ll give you another update at that point… Now… you must be wondering…

How Is GLW Stock Trading Today?

As of 1:45pm 4/24, GLW is up over 5%, (or $0.71/share). I will be watching to see if GLW closes at the high of the day. At this point, it looks likely. And volume is raging too.

That said…

I will not chase GLW stock! I will let my current position ride. And maybe I’ll even add on a pullback (once I hear the conference call). So while I’m happy Corning is doing well, and I’m glad I own some, the trade is becoming a bit too risky for my tastes.

I’ll keep following GLW though. And actually…

One other interesting development of note is a memo out from Dow Corning indicating the LED market is at an inflection point where conventional materials will have to be left behind for more advanced (read: silicone-dependent) LED. Of course you don’t need to be an analyst to know this would be great news for GLW!

I believe there is good news on the horizon, but I’m disciplined. And I won’t pay too much to be in on the action. Make sense?

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