A Severe Overreaction

Corning (GLW), which closed Friday at $11.82, reported solid overall results for the third quarter last week. However, the stock was punished for cautious management comments about the current business environment -- ones that weren't dissimilar to those of many other companies -- and for some confusion about its core LCD-glass business. We believe the market severely overreacted, and that valuation is now just too compelling to resist.

For the quarter, Corning reported a $0.02 earnings beat and slightly better revenue, mainly due to better margins from its specialty Gorilla Glass product and to the above-plan results in the TV-glass business. Gorilla has been a home run; television-unit volume is down, but screen size has increased and a transition to thinner glass has both carried higher margins....416 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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