Corning Is Cheap, But Is It A Buy?

We can also compare Corning to other suppliers for tablet and smartphone companies, including Cirrus Logic, Inc. (NASDAQ:CRUS), Fusion-IO, Inc. (NYSE:FIO), and Qualcomm, Inc. (NASDAQ:QCOM). Fusion-io is another low-earnings company; while its revenue growth has been impressive recently, making it at least possible that net income will start to pick up, quite a bit of growth is already priced into the stock seeing as it trades at 53 times analyst consensus for 2014. At that price we would certainly wait for better results. Qualcomm, the largest of these companies by market capitalization at over $100 billion, has some characteristics of a “growth at a reasonable price” stock. Its trailing and forward P/Es are 17 and 13, respectively, and recent financial results have been quite good. While we would want to do more due diligence on the company it looks like a good prospect. That leaves Cirrus, whose valuation is quite low in terms of its trailing earnings and has been experiencing high growth recently as well. However, with 17% of the outstanding shares held short there is clearly a large bearish community and we would have to be careful when researching the company.

Still, Qualcomm and possibly Cirrus come out of our brief analysis as stocks which are at least worth a closer look. Corning’s multiples certainly look good, but with tablet and smartphone devices coming down in price we would generally expect supplier margins to face pressure as well and would certainly want to see the company can sustain its current levels of business- if not actually grow- before recommending it as a value stock.

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