Cree Shares Plunged Again: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Two days after suffering a string of analyst downgrades, Cree (NAS: CREE) took another beating, falling 12% after issuing worse-than-expected guidance for the current quarter.

So what: Cree and peer Veeco Instruments (NAS: VECO) together took the brunt of Wall Street's bearish calls, which were based on overcapacity and poor pricing trends. Now it seems those fears have been realized.

Now what: In a statement issued yesterday, management told investors to expect $0.25 to $0.28 a share of profit -- well below the $0.34 analysts were calling for. Meanwhile, the sell-off has cut the stock to the point where Cree now sells for less than the long-term earnings growth analysts expect. Is that an opportunity? Or do you expect Cree's uninspiring growth trends to continue? Please weigh in using the comments box below.

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At the time thisarticle was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He didn't own shares in any of the companies mentioned at the time of publication. Check out Tim'sportfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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