- Analytical Commentary -

Editor’s Note:  Companies mentioned in this out-take include Lightpath Technologies, Inc. (NASDAQ: LPTH), Kyocera Corp. (NYSE: KYO), Texas Instruments (NYSE: TXN), NEC Corp. (OTC: NIPNF) and Hoya Corp. (OTC: HOCPF).

The other day I mentioned Lightpath Technologies, Inc. (NASDAQ: LPTH), a company that makes lenses and other light bending items, which is a highly specialized segment of the market. But what market? And what size is the market?

Looking at a particular type of the Lightpath’s products, thermal imaging lenses, brings us to NAIC code 334511: “Search, detection, navigation, & guidance instrument mfg.”  The 1997 Economic Census estimates that broad market category to be a $32 billion segment. However, realistically, the market for imaging lenses is going to be closer to the sub-category: “Electrical equipment & supplies, n.e.c. (pt),” which is a $77 million segment.

Note that LightPath is listed in the technology sector, under semiconductor equipment and materials Industry. The semiconductor equipment segment is, of course, a much broader category, and represents a much larger market segment — and, indeed, LPTH’s optical isolator product line does definitely fit under that broader category. But I believe that the specialized properties of LightPath’s products, and the fact that most of those products are lenses, leads us to look at the smaller-sized market segment: A segment with far fewer competitors.

If you use some of the major investor pages to find LPTH’s competitors, those pages will list competitors in the broad market category. Competitors such as Kyocera Corp. (NYSE: KYO), Texas Instruments (NYSE: TXN), and NEC Corp. (OTC: NIPNF). And, yes, those companies may make some competitive products, especially to the optical isolator line, but do not seem to compete directly with the lens products.

LPTH’s does have competition in the lens segment.  For example, Hoya Corp. (OTC: HOCPF) could be seen as a more direct competitor. Hoya makes a product line that includes medical products, mask blanks for LCD’s and semiconductor devices, and photonics. Those components compete in the lens segment, however, not exactly in the same category or type. LPTH’s product line of “Aspheric Optics” seems to have very few direct, major competitors.

LightPath’s company conference call is scheduled for tomorrow, January 4th. I plan to be listening to the call, in order to gain a better understanding of the the company’s products and market potential.

Additional information for investors is available at LightPath’s Investrend InvestorPower(tm) Page (at http://www.investrend.com/investorpower/lpth), LightPath company filings are available via the SEC website at (http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001366669) and a ValuEngine Photo-Optics Industry Report (which includes LightPath is accessible via the Investrend Research Syndicate (at http://www.investrend.com/photo-optic).

LPTH’s February 4th conference call will be broadcast live via VCall (at http://www.investorcalendar.com/IC/ClientPage.asp?ID=154437).

Source: Investrend Weblogs (http://www.investrendweblogs.net/vassalotti/2010/02/03/lightpath-specific-products-few-specific-competitors/)

Previous Article: http://www.financialwire.net/2010/01/28/analyst-blog-watch-vassalotti-on-lightpath-technologies/

Gary Vassalotti, LIFA, is president of Vimcor, an equity analysis and portfolio management practice, as well as a contributing equity research analyst for Investrend Research. He previously worked with First American Bank, NA, First Union National Bank, and Montag Management, and has an overall interest in global markets. Mr. Vassalotti is a member of the North Carolina Society of Financial Analysts, the CFA Institute, and the North Carolina Investment Advisors Association (and was a former board member). Mr. Vassalotti has a B.S. in Finance with an emphasis in Economics from The Pennsylvania State University.

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