While the broader market has enjoyed a massive bull run over the past several years, Corning Incorporated (NYSE:GLW) has done nothing more than hang around. Actually, the stock declined more than 10% over a three-year time frame. When a stock performs poorly during a strong bull run, it’s almost always a red flag for the company’s underlying business and future potential. However, that isn’t the case for Corning.
A lot of potential
If you’re reading this article, then there’s a pretty good chance that Corning Incorporated (NYSE:GLW) is helping you do so. If you’re using a high-speed cable connection, then Corning’s fiber-optic material is driving the data stream. If you’re using a mobile device, then you’re probably reading this through Corning’s Gorilla Glass.
Gorilla Glass is scratch-resistant, lightweight, and strong, which makes it appealing. Corning is also working on Willow Glass, which can basically be described as an ultra-thin and tough glass that bends.
There have been many rumors about Apple’s iWatch using Willow Glass, but Corning Incorporated (NYSE:GLW) released a statement that Willow Glass is still several years away. Apple won’t wait that long to release the iWatch, and it has been widely rumored that this wearable device will be released in late 2014. It turns out that LG Display Co Ltd. (ADR) (NYSE:LPL) should have its curved glass at the ready by the end of this year, and it should be ready for mass production next year. This makes Apple and LG a potential match. LG Display Co Ltd. (ADR) (NYSE:LPL) is already a major provider for Apple screens, so this wouldn’t be a shock.
Getting back to Corning Incorporated (NYSE:GLW), even if it misses the iWatch freight train, it still made a highly strategic move be investing in View’s Advanced Dynamic Glass technology. The information below is from a Corning news release:
“Representing a major innovation in architectural windows, View Dynamic Glass intelligently regulates the amount of heat and glare that enters a building. Dynamic glass automatically transitions between clear and variable tint in response to environmental conditions and user preferences. Occupants benefit from uninterrupted views, abundant natural light, and greatly improved thermal comfort, while building architects enjoy expanded design freedom.”
This might sound like just another technology with potential, but there is substance here, considering demand has consistently accelerated. The ultimate goal is for Dynamic Glass to enter the mainstream. If that eventually takes place, which seems to be a realistic possibility, then Corning’s potential would be gargantuan.
Corning vs. peers
Corning Incorporated (NYSE:GLW)’s revenue consistently increased the past three years, but earnings have declined over the past two years. The latter would usually be a negative, but in this case, earnings have been partially hit by necessary acquisitions. These acquisitions will help drive future growth.