Corning Inc (GLW)

A very flat revenue line relative to most technology companies. The reason is that most of the volatility in earnings comes via joint ventures. The joint ventures, in many cases, is 50-50, where they own less than 51%. By owning less than 51%, it comes as an equity earning, so you need to look at the equity line. He feels this is very expensive. The US$ is making it a little cheaper.

This is really a technology company in glass. They made their name in fiber-optic cables during the .com era, and when that fell apart, their glass business took off. They make gorilla glass for iPhones and high end TVs. The company is sitting with a cash pile and have been buying back stock. This remains very undervalued. He continues to see huge upside with this company.

Great company and has done a wonderful job over the decades, morphing from an old-line glass company into something that is really in the Tech mainstream. To the extent that there are some deemed protectionist policies promoted by Trump, he wonders what that does to a company like this, because so much of their business is global. There could be some real volatility.

(A Top Pick Oct 5/15. Up 31.92%.) This was famous for fibre optics, and now they are famous for making Gorilla Glass for the iPhone, TVs, etc. This came back after the whole .com thing. They always stuck with their businesses. Just sold their holding in Dow Corning for almost $5 billion, and are sitting with a ton of cash. Buying back massive amounts of stock. Earnings are growing at double digits. Huge free cash flow and is extremely cheap. Thinks the stock is worth about $30 a share.

(Market Call Minute.)

It screens well on valuation and generates a lot of free cash flow, but it was not his best idea. The high growth is over for them.

That gorilla glass is on high end TV sets and on fiber optics. They are in high end ceramics and high end glass. They have net cash on the balance sheet, great free cash flow, and a great growth curve ahead of them over the next 10 years.

(A Top Pick Aug 1/14. Down 9.05%.) Had bought this at about $12 and sold it this year at $21+. Whether he gets back in is highly dependent on LCD screens and TV production and also on fibre.

Did a deal with Samsung where they bought out their joint venture and gave the company quite a boost. A lot of the products that this company is involved with can be commoditized. Whenever that happens, you tend to find that you sell more of it, but at a lower price. As an investor, that is not a great place to be.

The view on this depends on what your thoughts are about 4K TVs. Merrill Lynch says 4K TV is not coming out anytime soon and you should not be in this company. RBC is a believer in 4K TV as the next driver of the earnings growth for this company. As you see companies like Netflix and Amazon producing more and more of their content with 4K capabilities, it is going to bring on demand. Prices are coming down to not much more than a regular LCD TV, which will probably kick up the next leg of television purchases. This is where this company does 40% of their business. Dividend yield of 2.52%.

Sold his position in the last few weeks. In the near to medium term it has probably seen its best.

The one area he would be concerned with is when it gets below the $20 level, because that is going to bring in the $17 support level pretty quickly. The technicals target for this was $25, which it hit, and then rolled right off it beautifully. He would look at getting out at $21. If it gets above $45, then you buy some more.

Has always resisted this because of his fear of a commoditization, i.e., falling prices. In the LCD world we have seen that. This company has done well because they have been smart in running their business. Based on a valuation level and his fear, he wouldn’t Buy this one.

(A Top Pick Nov 4/14. Up 20.4%.) The rationale was its whole exposure to Gorilla Glass, and now the new business, potentially automobiles and other businesses that they are getting exposure to. Good dividend name with power to grow.

Earnings are starting to revise upwards, because there is a thought out there that a lot of TVs will need to be replaced in the next year or 2. “Estimated price earnings” is nearly 16.