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Will Corning Continue to Shatter Street Expectations?


It has in each of the last three reported quarters, and will likely do it again.

Do you like the flat screen you've got hanging on your living room wall? Of course you do, and odds are you'll spring for others in the years to come as you replace old sets or simply add new televisions throughout your home.

This is one of the basic reasons why I'm so gung-ho on Corning (GLW), which makes LCD glass. There are some other things I like about the company, too, that I wanted to bring up ahead of its fourth-quarter numbers, which are due out on the January 26.

1. Although the shares have risen pretty sharply this past year, I think it can still have some legs. A fairly recent Deutsche upgrade leads me to believe that the stock could be popping up on a bunch of new radar screens in the weeks ahead.

2. With the economy coming back and more folks dropping coin on things that make them happy, I think the demand for LCDs will pick up from 2009. In fact, I'd wager dollars to doughnuts that over time, demand for LCD screens could soar as populations and wealth increase.

3. I'm also noticing that estimates for 2010 have been inching up over the last couple of months.

4. Corning has shattered Street expectations in each of the last three reported quarters, and I think it can do it again. At present, the estimate for the fourth quarter is $0.42 and I think it will beat by two or three cents. If I'm right, the shares could be knocking on the door of a new 52-week high.

5. It trades at around 11.3 times the 2010 estimate -- that's cheap as the day is long, given the double-digit percentage growth (in EPS) that analysts are looking for from this year to next.

In early December it indicated that the 2010 outlook for the LCD glass market might end up being not half bad. I think the fact that it was willing to paint that picture so early on is a good sign.
And a little open-market buying by insiders in the New Year would send a great message to the investment community.

Hey, have a great day!
No positions in stocks mentioned.

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