Few companies can transform themselves from an old-line, houseware manufacturer into a cutting-edge player in the telecommunications sector. And rarely does the
market deeply discount the stock price of a high-quality, high-tech stock because it sees its core business as becoming commoditized.
The way I see it, this is a perfect storm for smart value investors.
Corning Inc. (NYSE: GLW) is that perfect storm right now, and I'll tell you why the time is right for adding this stock to your portfolio.
For decades, millions of Americans made millions of casseroles in Corning's durable, high-quality glass bakeware. But as the technology and telecom wildfires burned across the nation in the late 1990s, the company underwent a profitable metamorphosis.
As telecom companies built more broadband infrastructure due to skyrocketing demand, Corning was there to provide thousands of miles of fiber optic cables, which are made of pure glass that are as wide as human hair. As cash rolled in, the stock price zoomed to near triple-digit territory.
That is, until the tech-stock bubble burst.
And by September 2002, Corning's share price had tumbled to barely above a buck.
Looking through the glass at growth...
Now, 10 years later, we can easily say the company has entered a new, glorious phase.
If you reach in your pocket and pull out your smartphone, or if you're reading this on a tablet computer, then you're holding the key to Corning's current and future success: Gorilla Glass. Used primarily in consumer-electronic devices such as mobile phones, portable media players and displays, Gorilla Glass is an alkali-aluminosillicate sheet glass that is designed to be thin, lightweight and damage-resistant.
How important is Gorilla Glass to Corning's business? Last year, Gorilla Glass generated $710 million in sales, which represents nearly 9% of the company's total revenue. It's clear Corning has a winning product, as long as demand for smartphones, tablet computers and high-definition TVs remains robust.
In all, Corning expects its worldwide glass volume for 2012 to reach 3.6 billion square feet, a 12.5% increase compared with 2011.