Viking Posted May 25, 2011 Share Posted May 25, 2011 I started following Corning before Christmas; my initial interest was driven by all the press Gorilla Glass was getting (their new product being used for smart phones and tablets). Company looks to be growing in all 4 core business sectors = pretty solid performance. They are investing $2.5 billion this year alone to take advantage of growth opportunities. Net cash is $4 billion = $2.50/share (strong balance sheet). R&D and scale look to be their moat. Corning is looking to increase sales from $6.6 billion in 2010 to at least $10 billion in 2014. The key risk is the economy as the business is pretty cyclical. Corning looks to be cheap and positioned exceptionally well should the world economy not blow up later this year. Link to Investor Meetings: http://investor.shareholder.com/corning/eventdetail.cfm?EventID=87827&AcceptDisclaimer=yes Stock Price = $19.55 2010 Earnings = $2.06; PE = 9.5 2011 Earnings Forecast = $2.00 (lower due to higher tax rate) Dividend = $0.20 = 1% Here is why the CFO feels you should invest in GLW: 1.) we are a growth company 2.) we are leaders in all of our segments 3.) we have a strong balance sheet 4.) we expect to generate significant cash flow over the next several years 5.) we continue to innovate 6.) we have a proven management team Link to comment Share on other sites More sharing options...
twacowfca Posted May 25, 2011 Share Posted May 25, 2011 I started following Corning before Christmas; my initial interest was driven by all the press Gorilla Glass was getting (their new product being used for smart phones and tablets). Company looks to be growing in all 4 core business sectors = pretty solid performance. They are investing $2.5 billion this year alone to take advantage of growth opportunities. Net cash is $4 billion = $2.50/share (strong balance sheet). R&D and scale look to be their moat. Corning is looking to increase sales from $6.6 billion in 2010 to at least $10 billion in 2014. The key risk is the economy as the business is pretty cyclical. Corning looks to be cheap and positioned exceptionally well should the world economy not blow up later this year. Link to Investor Meetings: http://investor.shareholder.com/corning/eventdetail.cfm?EventID=87827&AcceptDisclaimer=yes Stock Price = $19.55 2010 Earnings = $2.06; PE = 9.5 2011 Earnings Forecast = $2.00 (lower due to higher tax rate) Dividend = $0.20 = 1% Here is why the CFO feels you should invest in GLW: 1.) we are a growth company 2.) we are leaders in all of our segments 3.) we have a strong balance sheet 4.) we expect to generate significant cash flow over the next several years 5.) we continue to innovate 6.) we have a proven management team Their 1% dividend suggests they may have to keep reinvesting in their business to keep from falling behind their competitors. What's their growth rate of earnings/FCF etc. Over 10, 15, 20 years? Link to comment Share on other sites More sharing options...
Viking Posted May 25, 2011 Author Share Posted May 25, 2011 You may want to zoom through the CEO and CFO's presentations to get a good summary. From p 16 of Weeks (CEO) presentation: Free Cash Flow in 2010 = $2.8 billion (includes $900 million special dividend paid by an equity holding). This was 7th consecutive year of free cash flow = $6 billion cumulative last 7 years. Regarding small dividend; they pay out a small amount because they feel they have great opportunities at present to invest in their businesses. Link to comment Share on other sites More sharing options...
Viking Posted June 8, 2011 Author Share Posted June 8, 2011 For those who want an Executive Summary and to understand where Corning is going you may want to watch most recent CEO presentation: http://investor.shareholder.com/corning/eventdetail.cfm?EventID=95038&AcceptDisclaimer=yes You Tube video: A Day Made of Glass: Watching this video I was thinking about Apple's launch of I-Cloud... the products Corning features in the video fit perfectly with Apple/Microsoft etc vision of the cloud. The key near term risk to Corning is if the global economy slips back into recession. However, should the economy not slip back into recession Corning looks to be ideally positioned (in all of its business segments) to do very well the next few years. Seeking Alpha Write Up: http://seekingalpha.com/article/273833-10-reasons-corning-is-significantly-undervalued Link to comment Share on other sites More sharing options...
gaf63 Posted June 9, 2011 Share Posted June 9, 2011 Viking , excellent write up on Corning. Very interesting company. The CAGR of FCF backs up the CEO's statement that GLW is a growth co. But the market doesn't/hasn't given GLW a growth premium - 8.3 PE, P to FCF 10.6, and a CAGR of FCF for the last 7 yrs of 51%. So is the low valuation due to GLW being considered a consumer cyclical, or that the market doesnt look out more than 6 mos or so. Purchased a small amount(promptly went down), and will buy more on market declines. Link to comment Share on other sites More sharing options...
Buckeye Posted September 27, 2011 Share Posted September 27, 2011 Hey Viking, are you in on Corning. It seems very cheap at this point. Below book value with zero goodwill on the balance sheet. It has near 50% profit margins, which I assume comes partly from the Dow/Corning partnership. Is this correct? I get a 20B dollar company with 3.5B in net income last year and 4.5B in cash at 6X earnings. Am I missing something? Anyone else may also feel free to chime in and "kill" my idea, as Berkowitz would say. Link to comment Share on other sites More sharing options...
xxx1313 Posted October 2, 2011 Share Posted October 2, 2011 The annual report gives not much information on goodwill and intangibles. "Other assets", however, are only 400mn alltogher. Corning has a stellar balance sheet with more than 20bn equity, little debt and over 4 bn in cash, so I do not worry about the quality of a few hundred million of its assets. Earnings come mostly from Samsung Corning Precision (glass for TFTs) - nearly 1.5 bn in 2010. 93% of Samsung Corning Precision sales go to Korean panel makers. Another 1.4 bn are from Corning's wholly owned display glass business. Dow Corning (silicones) is responsible for about 440 mn. Earnings from Telecommunications, Environmental Technologies and Speciality Materials ("Gorilla Glass") is negligible (at least by now). So, all the earnings power is in the display segment, which might be much more cyclical over the next years than in the past years. High growth rates of the past years are irreproducible. Nevertheless, Corning seems very cheap and a severe downturn is already reflected in its stock price (positive surprises are quite likely over the next quarters and years). PCs won't die out soon and the advent of tablets and other gadgets should guarantee at least some growth in display volumes over the years. Link to comment Share on other sites More sharing options...
Viking Posted January 4, 2012 Author Share Posted January 4, 2012 Corning looks to be a classic cyclical play. I am not sure exactly what to make of its earnings warning the end of November; we will find out in early Feb when they report. I am not expecting good news. I do like the markets they are in. Most importantly, TV sales should continue to hold up well as quality continues to improve and prices for large screen TV's come down. My guess is people will replace their TV's more quickly than in the past to take advantage of picture quality improvements and feature additions. And if Apple is indeed coming out with a TV in 2012 or 2013 then I would expect demand for TV display glass to skyrocket. If Corning supplies Apple directly they hit a grand slam home run; even if they do not supply (they are partnered with Samsung who is a competitor of Apple's) Corning will still hit a home run as the TV display market will tighten significantly and prices will rise. http://www.digitaltrends.com/home-theater/apple-taps-sharp-to-develop-itv-rumor/ My concern is management; kind of remind me of RIMM and that is not a good thing! They talk a very good game but look to be under-performing. Too many 'pie in the sky' promises. Fortunately, we know they are in a cyclical business and the answer may be that simple. A few more quarterly reports (and conference calls) and we should have our answer. Corning at $13.00 looks interesting.... Link to comment Share on other sites More sharing options...
BargainValueHunter Posted November 22, 2012 Share Posted November 22, 2012 GLW...the Loews of Tech. Anybody figure out why this company can just keep chugging along with great execution and good compounding numbers but the stock market...year in and year out...just couldn't care less? Link to comment Share on other sites More sharing options...
roundball100 Posted November 22, 2012 Share Posted November 22, 2012 Does seem to be in the running for value investors. P/E is, however, not much lower than big stable hi-tech companies like MSFT and CSCO ... which some might argue have more (short-term at least) potential. As a long-term investment: good balance sheet (more cash than debt), any strong competitors? Link to comment Share on other sites More sharing options...
CONeal Posted November 22, 2012 Share Posted November 22, 2012 Spent some time looking at the last 10 Q tonight and wondering if anyone has comments on the lawsuits? Innocent until proven guilty but Antitrust violations w/ car parts Asbestos Claims Probably responsible for 17 hazordous waste sites where they admit the company is under reserving. Link to comment Share on other sites More sharing options...
mcliu Posted November 22, 2012 Share Posted November 22, 2012 I own shares as well, but the company is in a tough business. Most of your earnings end up getting spent as R&D or Capex to build bigger and better factories so it's tough for the company to return cash to shareholders. The industry is a lot more consolidated in recent years, but there's still lack of pricing power due to a misperception of demand which lead to overcapacity. I think you really have to believe in Corning's R&D to keep pumping out great products and a rationalization of capacity for LCD/LED glass. Link to comment Share on other sites More sharing options...
LC Posted April 25, 2013 Share Posted April 25, 2013 GLW...the Loews of Tech. Anybody figure out why this company can just keep chugging along with great execution and good compounding numbers but the stock market...year in and year out...just couldn't care less? http://www.corning.com/news_center/news_releases/2013/2013042402.aspx Dividend increase to .10/share, buybacks authorized for up to $2bln. Dataroma: http://www.dataroma.com/m/stock.php?sym=glw Link to comment Share on other sites More sharing options...
boilermaker75 Posted April 25, 2013 Share Posted April 25, 2013 GLW...the Loews of Tech. Anybody figure out why this company can just keep chugging along with great execution and good compounding numbers but the stock market...year in and year out...just couldn't care less? http://www.corning.com/news_center/news_releases/2013/2013042402.aspx Dividend increase to .10/share, buybacks authorized for up to $2bln. Dataroma: http://www.dataroma.com/m/stock.php?sym=glw It has been many, many years since I thought of GLW. The financials sure look interesting. A market cap of $21B, cash of $4.99B, short-term investments of $1.15B and a TTM FCF of $1.4 B. I'll have to take a closer look. Link to comment Share on other sites More sharing options...
Palantir Posted April 25, 2013 Share Posted April 25, 2013 How do you know GLW will be supplying glass for the Apple TV? It could be Sharp right? You won't need Gorilla Glass for a TV I assume... Link to comment Share on other sites More sharing options...
LC Posted April 25, 2013 Share Posted April 25, 2013 How do you know GLW will be supplying glass for the Apple TV? It could be Sharp right? You won't need Gorilla Glass for a TV I assume... I don't know, but I like the economics of glass: the specialized versions require high levels of skill (and have the margins to make it worthwhile) and Corning is a leader in that field. I think the quality of glass will become important as it is the physical item that connects people to digital visual entertainment. I think it's more likely than not that the highest quality manufacturers (say, Apple) will use the highest quality glass in their product. I could be wrong, and there was certainly more of a margin of safety when I purchased my position (@ ~$12/share), but the price does look cheap. Added: Corning mentions anti-microbial glass being developed. I immediately thought it was designed for cell phone manufacturers to market as "no smudges, germs or oils etc. on your cell phone!". Link to comment Share on other sites More sharing options...
Palantir Posted April 25, 2013 Share Posted April 25, 2013 ^Fair enough. There is also Google Glass. Link to comment Share on other sites More sharing options...
feynmanresearch Posted October 23, 2015 Share Posted October 23, 2015 I was looking at this company recently. They look really cheap at this point Link to comment Share on other sites More sharing options...
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