Is Corning a Healthy Stock for Your Portfolio?

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With shares of Corning (NYSE:GLW) trading around $19, is GLW an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Corning produces and sells specialty glasses, ceramics, and related materials worldwide. It operates in five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences. Corning has launched Corning Lotus Glass, an environmentally friendly display glass for organic LED and LCD displays that are used in portable devices such as smartphones, tablets, and notebook computers. Smart phones, tablets, notebook computers, and related materials are seeing explosive growth in developed and developing countries around the world.

An executive from Corning took the stage at the Morgan Stanley Technology, Media, and Telecom Conference on Tuesday to say that the company’s Gorilla Glass is a better material to be used in consumer electronics than sapphire crystals. Rumors have been swirling that Apple (NASDAQ:AAPL) is planning to switch to sapphire for the display in the next iPhone, as the company has recently purchased a sapphire manufacturing plant in Arizona to make the scratch-resistant material. Tony Tripeny, a senior vice president at Corning, spoke to analysts about the sapphire issue at the conference.

“When we look at it, we see a lot of disadvantages of sapphire versus Gorilla Glass. It’s about 10 times more expensive. It’s about 1.6 times heavier. It’s environmentally unfriendly. It takes about 100 times more energy to generate a Sapphire crystal than it does glass. It transmits less light, which it means either dimmer devices or shorter battery life. It continues to break. … I think while it’s scratch-resistant product, it still breaks, and our testing says that Gorilla Glass, about 2.5 times more pressure that it can take than Sapphire on. So when we look at it, we think from an overall industry and trend that is not attractive in consumer electronics,” he said in response to a question about how the rising popularity of sapphire would affect Corning and electronics consumers, per Seeking Alpha.

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