Bullish On Lighting Science

I live in Satellite Beach, Florida, and right down the street is a little company called Lighting Science.  At least I thought it was little.  Lighting Science makes, as you can guess, lights.  But they specialize in state of the art LED lighting.  Locally, they have been on a hiring spree and they have just acquired some new manufacturing space.  I believe that Lighting Science sells directly to big box stores like Home Depot and they sell material to other manufacturers like Sylvania.

I started to think about what was going on in the lighting business.  A few years ago when you walked through Home Depot or Lowe’s the only light bulbs available were Edison style light bulbs – the standard incandescent type.  Then, almost overnight, the twisty-flourescent type of light bulbs were all over the place.  It seemed to happen in the blink of an eye.  But drawbacks with toxic mercury and ballast issues have caused the public to sour on them somewhat and I really expect that one morning I will wake up and all the light bulbs on the store shelf will be LED”s.  And why not?  They have low power consumption and consequently low heat, and long life.

There are a few hurdles to overcome before they dethrone the current lighting kings – they are not bright enough and they are not cheap enough.  I met one of Lighting Science engineers at a party and he said they are finding ways to make their lights brighter every day.  There is probably some hyperbole there, but there is probably some truth there too so I think the brightness issue will resolve in the near future.  I also believe that the pricing issue will resolve in time as well.  I have been shopping LED lighting for awhile now and I have seen a 50% drop in price in the last year from about $50/bulb to $25/bulb.  That is a positive sign, but still above my “buy” threshold.  Another 50% drop would probably do it though.  Remember, the twisty-flourescent lights started out fairly expensive and now you can get a 3-pack for under $10.

Another data point is Lighting Science does all their work right here in Satellite Beach, FL.  Design, test, and manufacture are all done right here in the USA.  That makes me think they still have room to improve costs by moving some manufacturing overseas if they ever needed or wanted to.  So we have a small, solid company that is experiencing significant growth in the sweet spot of the lighting market.  This could be the Google/Microsoft/Apple of the lighting industry.  It could also be a juicy acquisition target.

Well, awhile back I put my money where my mouth is and I bought a bunch of this stock.  I got in at around $2.00/share.  It went up to around $5.20/share and then back down to about $4.00/share where it has been hovering for awhile.  I am thinking about buying a bunch more as I really don’t see a downside short of a global market meltdown – which is a real concern in this current political/economical market.  I would be interested in other opinions on Lighting Science so please leave a comment and hopefully we can make some money.

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