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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Diamonds and Dogs

04/18/2012

Cree Inc. (CREE)

Cree Inc. is inCREEdibly down today, down 6.05% at $29.97. The company's stock has been doing well this year up 45%, but today it saw a drop due to a poor earnings report. Revenue for Cree was reported at $285 million, falling short of analyst's estimates of $300 million. LED lighting makes up 90% of Cree's revenue; mix that with Chinese companies joining the LED market with cheaper products and one can see where the company would run into problems. Furthermore, to be competitive Cree has been cutting into its margins, which have dropped from 42% to 35%. Cree stated it expected its revenue to improve this quarter, at a range of $295 million-$315 million. This range will land revenues behind the analysts' expectations of $323 million.

Catalyst Health Solutions Inc. (CHSI)

Its name says it all; Catalyst is its own catalyst today, up 34.14% at $85.23. Catalyst Health Solutions stock was catapulted today due to the fact that SXC Health Solutions Corp is working a deal to buy Catalyst. SXC said it was working on a deal with Catalyst worth over $4 billion, offering around $28 cash and a portion of its stock valued at $53.02 per share, for each share of Catalyst. That equates out to be a purchase price of $81.02 per share, which was at a 28% premium of Catalysts Tuesday closing price. BMO analyst Dave Shove stated that the deal would help SXC have more purchasing power and a bigger presence in key government business areas. Catalyst caught a spark today, and went on a tear.
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