Last week, I wrote about the wisdom of buying stocks hitting new highs, recommending both Perrigo (PRGO), the largest U.S. maker of store-brand over-the-counter drugs, and EV3 Inc. (EVVV), which calls itself “Your endovascular company.” Both had a good week, and I still like them long-term.
But today my thoughts turn to light bulbs.
Of course, they’re not all bulbs anymore, but we’ll probably keep calling them that, just as we still “dial” and “hang up” the telephone.
This weekend I was changing a bulb at home; I replaced a traditional 60-watt incandescent bulb in a ceiling dome with a curly compact fluorescent light (CFL). But as I was screwing the dome back into place, the CFL, being wider at the end than the previous bulb, was squeezed by the dome and broke.
Remembering the warnings about mercury, I held my breath, opened a window and walked away, heading to Google to learn what to do next.
Among the things I learned are these:
The amount of mercury in a CFL is small (perhaps 4 mg); there’s far more in watch batteries and those shoes that light up as you walk. In an ideal world, all those items would be treated as hazardous waste. Normally, however, they end up in the regular trash stream … which is where I put mine after I cleaned up, being careful not to use a vacuum cleaner, which would spread the mercury further.
Then I put in a regular incandescent bulb.
Now, part of me appreciates these CFLs. After all they save money, by using 75% less energy than incandescents and lasting perhaps 10 times longer. And they’re less bad for the environment too, regardless of where I dispose of my used CFLs. The amount of mercury contained in a CFL ends up being less than half the amount that would be released into the atmosphere from a coal-fired power plant to keep an incandescent bulb lit over the life span of a standard CFL.
Nevertheless, I’m reminded of something I read when the government passed laws dictating the phase-out of incandescent lights. You may remember that there were virtually no complaints from manufacturers. In fact, their lobbyists helped draft the laws! And why? Because the new CFL lights are more profitable.
What I’m really waiting for are light-emitting diodes (LEDs), which use semiconductor technology to create light using substantially less energy … which means less wasted heat.
At the moment, these lights are still not cost-effective for homeowners, although if you really want to avoid the mercury risk you might justify it. But efficiencies are improving fast. Just as Moore’s Law illustrated the progress of semiconductor processing chips for decades, today Haitz’s Law (after Dr. Roland Haitz) illustrates the progress of LED technology. Since the 1960s, efficiency has doubled approximately every 36 months.
One of the leaders in the industry is Cree. Inc. (CREE), a Durham, North Carolina company that’s thriving by serving the industrial market.
Cree earned four appearances in Cabot Top Ten Report last year. Here’s part of what the last report said, on November 11.
“Cree Inc. is a leader in the production of light emitting diodes (LEDs) … LEDs have been popular for years in laptops and cell phones, but as the demand for electricity rises and the efficiency of LEDs soars, their applications are expanding, especially for outdoor lighting. For instance, Cree is supplying Anchorage, Alaska, with 16,000 LEDs. With 80% of the firm’s revenues coming from outside the U.S., there’s a good chance countries like China, which already makes up a big chunk of business, could replace millions of bulbs in the years ahead. Revenue growth is accelerating and the recent earnings release just topped estimates. We like it.”
Back then, CREE was trading at 42. Today it’s 61. And it still looks good.