Our latest stock pick is a South Korean company, LG Display (LPL), that makes displays for TVs, computers, tablets, pads, mobile phones, automobiles and anything else that needs a screen, notes Paul Goodwin, editor of Cabot Emerging Markets Investor.

Originally a joint venture between Korea’s giant LG Electronics and the Dutch company Koninklijke Philips Electronics, LG Display became independent in 2004 and changed its name to LG Display in 2008, when Philips sold its stake.

The company began developing thin film transistor liquid crystal displays (TFT-LCDs) in 1985 and began mass production in 1995.

LG Display is the biggest maker of LCD panels and one of the biggest makers of TFT-LCD screens, organic light-emitting diode (OLED) screens and flexible display screens in the world. It’s a big company, with a market cap of almost $12 billion and annual sales of $24 billion.

Like many tech sector business lines, displays are cyclical commodities, although LG Display’s continuing development of flexible screens and hyper-resolution displays gives it some protection from commoditization.

Revenue was essentially flat for the four years from 2013 through 2016, but LG’s Q1 earnings report on April 26 was a blockbuster, with revenue up 21% and earnings up a huge 8,400%, coming in well above expectations.

LPL hit a rough patch in 2015, falling from $18 in January to $8 in August. The stock revisited that low at 8 in January 2016 and again in February. But the stock advanced to $12 in April and $14 in August, followed by a nine-month consolidation in a tightening trading range.

The stock broke out in late May on heavy volume thanks to the Q1 earnings report, and roared to $17 on June 13 on its heaviest trading volume since August 2015.

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At this price, the stock is trading at a P/E below 9, which, combined with its forward annual dividend yield of 1.3%, makes it quite a bargain.

LPL isn’t likely to be a runaway winner, but the cyclical display industry is in an uptrend, and the company has a strong position in its market and good barriers to entry. We regard it as a low-risk defensive pick, but its late-May/early June rally has shown that it can move quickly too.

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