Has Universal Display Corporation (PANL) Become the Perfect Stock? – LG Display Co Ltd. (ADR) (LPL), AU Optronics Corp. (ADR) (AUO)

Universal Display Corporation (NASDAQ:PANL)’s innovative organic LED technology has the promise to transform the way people watch television. Already, the company has gotten its products into a wide variety of smartphones and tablets from Samsung and other major players. But the big market will come from large-screen OLED televisions, and AU Optronics Corp. (ADR) (NYSE:AUO) and LG Display Co Ltd. (ADR) (NYSE:LPL) have all joined Samsung in licensing Universal Display’s technology for TVs. Given that a single large-screen TV has 100 times the display area of a small smartphone, OLED TV is the mother lode that Universal Display Corporation (NASDAQ:PANL) hopes to dig into.

Unfortunately, the industry has moved slowly toward OLED TVs. LG Display Co Ltd. (ADR) (NYSE:LPL) has finally started making shipments of the displays, and Samsung introduced a curved OLED TV at the Consumer Electronics Show in January, but it’ll still be a while before the companies get to full-scale production levels.

In its most recent quarterly results, Universal Display Corporation (NASDAQ:PANL) managed to beat sales expectations, although its earnings came in slightly lower than expected. The company’s guidance was also positive, sending shares higher, but with Universal Display Corporation (NASDAQ:PANL) so reliant on its major customers, it’s extremely difficult to count on the company’s calls on sales when a production delay or other strategic decision beyond Universal Display’s control can have such a huge impact.

For Universal Display to improve, it needs to take advantage of its technological advantages to try to boost margins and get more profit from its sales. Widespread adoption of OLED TVs will help, but only by emphasizing quality will Universal Display avoid falling into the trap of selling what could become a commodity material in the years to come.

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No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you’ll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

The article Has Universal Display Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Universal Display.

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