Corning: Will it Ever Breakout?


We said buy when it bottomed in the summer, now what?

Corning Inc (GLW) is a stock the Masters have gone to bat for time and time again.  Last time was in the summer when Corning hit its last 12 month low.  With Gorilla Glass 3 will the market finally get behind the company?

Since that summer recommendation Corning shares have managed to gain back 15%. Only 15% more for a new 12 month high. However anyone who has ever traded Corning knows that it's a slow mover.  But you can't get caught up with how Corning has traded in the past.  If Gorilla Glass 3 is the real deal it could finally buck it's narrow trading range and get back the $20 level.  That would be a shareholder's dream at this point.  For Corning to reach $20 a share within the next 12 or 15 months it would be a 58% return.  pookieThat's a pipe dream.  Goldman (GS) believes Corning will reach $14.50 in the next 12 months.  On Dec 28th Goldman cut their price target on shares of Corning from $16 to $14.50.  Zacks just released a $14.90 price target on Corning this week.  Face the facts, the analysts are not smoking Corning Inc. Crack (please know there is no such thing as 'Corning Inc. Crack, its meant to be a clever play on a glass crack pipe etc.  Also an opportunity to post this hilarious photo of Chris Rock in 1991's New Jack City.  Hi Pookie)

There are believers in Corning on the internets and we "want to believe" as well.  We recommend a reasonable expecation, don't expect a $20 share price before Goldman Sachs does.  Corning's new Gorilla Glass 3 (GG3) sounds amazing, but will it be enough to move the stock back past $14?  The new product offers 3 times the scratch resistance and a 40% decrease in visible scratches relative to Gorilla Glass 2.  GG3 has 50% more retained strength once the glass becomes flawed.  Gizmodo has the only video of Gorilla Glass 3 right now, click to watch now.  How soon will the impact of GG3 hit the bottom line for Corning Inc?  Will Wall Street load up on the stock in advance of GG3 for the masses?

Who knows.

What we do know is that Corning Inc. pays a 2.85% annual dividend yield.  Corning controls almost half of the world's glass panel market.  Corning's price to earnings ratio is only 9.5.  The company is rolling in dough with net cash of $1.94 per share. It's on Apple (AAPL) iPhones, iPads, and the best high end mobile devices.  Should Corning construct a GG3 crack pipe, maybe it will take shares to $20. Until that happens another 15% ROI from today's share price is a respectable 12 month move.