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Barron's sees at least 40% upside for LPL +5

07:25 03-Aug-15


A feature piece in Barron's sees 40 to 70% upside for LG Display.  I typically find Barron's to have sound analysis that is rather behind the curve.  In keeping with that, the article focuses on the current lead in mobile displays and computer monitors, but misses the developing technology lead with AMOLED televisions, which are now selling reasonably well according to my checks. 

The article says the reason for the current depression in LPL is "guilt by association" with LG Electronics and also talks about several other things that I've been mentioning repeatedly such as valuation, and strong dollar effect.  It also cites a Macquarie Research report:
free cash flow will turn positive this year, triple next year, and double again in 2017, by then totaling well over 20% of the company’s current stock market value. Meanwhile, LG Display’s price-to-book ratio recently fell below 0.7, last seen in 2011 and 2008.

In 2011, Macquarie notes, the company recorded chronic losses amid a severe supply glut, whereas now it is solidly profitable. In 2008, Korea was caught up in the global financial crisis, and its Kospi stock index was at half today’s level.


Regardless of whether you want your analysis to be leading or trailing, Barron's articles of this sort have shown a consistent ability to move stocks, which is why I'm mentioning it before the bell this morning.  Sometimes all it takes is a bigger megaphone.