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AUO: AU Optronics Should Display Strong Returns

William A. Trent (June 16th, 2008) Writes:

My latest column is up at RealMoney.

In a normal economy, shares of Au Optronics (AUO) would be rising as fast as the company’s sales. Instead, sales and cash flow are zooming, and the company has been topping estimates by a wide margin, but shares keep moving sideways and now trade for less than 5 times projected EPS. In time, look for shares to catch up with the growth metrics.

AU Optronics makes thin film transistor liquid crystal display (TFT-LCD) panels and other flat-panel displays, which are used in notebook computers and desktop monitors, as well as in portable consumer electronics devices and LCD televisions. AUO competes primarily with LG Display (LPL) and Samsung Electronics, both of which are larger than AU. Corning (GLW - Annual Report) is also a significant force and is one of the company’s primary suppliers for glass substrates.

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