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Bendable Fiber May Lead To Corning's Breakout


A catalyst is needed to bring attention to Corning and this bendable fiber could be that catalyst.

In recent years, most Corning (GLW) bulls have focused on the glass division that provides the flat panel display and TV markets. With the proliferation of HDTV and growth markets such as China, this area should still provide solid growth. However, I think the keys to GLW's continued growth lie in other areas.

First is the diesel emission business. Corning is a leading supplier of advanced cellular ceramic substrates and particulate filters to all of the world's major manufacturers of gasoline and diesel engines and vehicles and in recent months deals have been disclosed with Cummins (CMI) and Detroit Diesel.

Second, and possibly much more important, is the very exciting announcement for bendable fiber.

As stated by Corning's COO, this is game-changing technology for the company and I fully agree. On its conference call, some questions were asked about this breakthrough and it appears that there may be additional applications for this new fiber, which could open up sales in additional markets, such as data centers.

Many times, companies can deliver solid results, yet the stock price can languish. Over the last couple quarters this seems to be the case with GLW. A catalyst is needed to bring attention and this bendable fiber could be that catalyst.

The fundies are solid for this name. Current and forward P/E's are reasonable to low, PEG ratio is around 1, free cash flow is strong and GLW's cash hoard continues to grow. Reaffirming this point, GLW announced they would start paying dividends again.

Technically, the stock is doing solid work in consolidating large gains off the extreme lows of a few years ago. The 200 day moving average is in the mid $22's, with the 50 day ma around $25.50. In this free-falling market 200 day ma's are harder to hold but if GLW holds into more broad market weakness that would be quite bullish. Likewise a break back above the 50-day would be another positive development.

Maybe most telling is that the two times last week that the NAZ showed good early morning strength, GLW was right there participating in the bounce.
Position in GLW.

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