Corning, Inc. (NYSE:GLW)

Recent bad news be damned. Corning has the tools to succeed in the near and long terms. Gorilla Glass, LCD panels and fiber optic cables are all crucial to its growth - and more importantly to the growth of the companies that use them and the infrastructure of the new economy. I'm long GLW...

Strong cash flow and little debt. Trading near book value with PEG below 1. Oversold, expect a rebound.

Cyclical down price, management buying back shares and increasing dividend, should appreciate as U.S. consumer spending increases.

No way a company like this will not survive for the better. Reorganizing is good for everyone now and then.

Undervalued

It is way undervalued right now by any normal financial metric.

8x FCF for a 9% grower that's swimming in demand and capacity, cutting capex, and paying a 2% divvy? Sign me up!

Market for Corning's products is not going away. International markets are suffering more than here in the US so companies like LG (who just cancelled their contract) will turn to products like Gorilla Glass when the global market turns around. This is a long term play and investors should get in while the getting is good.

A good smartphone will need a good glass cover. From there it's toughness and good look will likely migrate to all tech surfaces. What a great idea for cars but there website only listed one car manufacturer using it. Glass of the future. Of course, I should mention I don't know much about other considerations for such surfaces.

Why not?

Unfortunately I jumped on this one,and now I'm the fool.

The company is trading at a 6-7 multiple for what appears to be concern over LCDs (A significant chunk of sales), and Gorilla Glass (9% of sales). Even if you factor in a large slowdown for those two elements, you've got a money-making company paying a 2% dividend with a wide moat and a diverse array of products. Sounds like a not-so-terrible deal.

Management appears to not be eating paint chips, share count has stayed steady at about 1.56B for the last few years (slight decrease lately) and a recent buyback authorization looks like it may be one of the few buybacks that isn't an obvious sign of insanity (Amazon anyone?).

Debt is reasonable, though higher than I'd like, and overall I'd call it a win.

So here's the CEO compensation, for the last bit of complication.

Salary $1,069,423
Bonus $0
Value of Stock Awards $0
Value of Option Awards $1,130,269
Non-Equity Incentive Plan Compensation $6,724,681
Change in Pension Value and Deferred Compensation Earnings $2,012,201
All Other Compensation $429,114
Total $11,365,689

Salary seems pretty reasonable, perhaps someone can educate me on what a Non-Equity Incentive plan is. Beaver Pelts? Wives? Cattle? -Not sure, but that's a lot of money. I need an interpreter to be sure on this one, so I'll call it a neutral.

Taking a swing with some real money. Who's with me? (Please say "me" if you're a massive hedge fund, but not until tomorrow).

Value play. Stock's been hit hard lately and stands to benefit from their specialized products being implemented in more and more tech devices, an industry expected to see continued growth.

Corning has a strong positioning in glass used for displays of any size, and though profits will suffer from a weak economy, the valuation is low, it has a lot of cash, and we will all be using lots of new displays, driven by the pace of innovation in the field.

Extremly undervalued.

LCD and Plasma sales are off but this company makes very innovative glass that will keep them at the top for a long time to come.

No Goodwill on the books, and stock is trading for near book value. The company has momentum.

An old company with a modern attitude to R&D and marketing, Corning is in the vanguard of our hi-tech world. Boring? Maybe, but solid and dependable.

the demand for LCD TV