I'm reiterating my Buy rating for Koninklijke Philips Electronics NV (NYSE: PHG), commonly known as Philips, first recommended on June 2, 2009 at a price of $20.30. If you purchased PHG then, you're up about 20%.

Amsterdam-based Philips missed the Street's revenue and earnings estimates in Q2, in what amounted to an essentially break-even quarter.

Amsterdam-based Philips (NYSE: PHG) announced Monday it has agreed to purchase U.S.-based Genlyte (NASDAQ: GLYT) group for $2.7 billion.

The deal values Genlyte at about $95.70 per share, or about a 50% premium over Genlyte's Friday closing price. Genlyte's shares surged $31.50 (just over 50%) to $94.17 in Monday morning trading. Philips gained 24 cents to $42.46.

Philips said the deal will strengthen its position in energy-efficient lighting, adding that with Genlyte it will surpass rival General Electric (NYSE: GE) as the largest lighting company in North America. GE's shares fell 14 cents to $37.53.

Stock Analysis: It looks like Philips has executed a smart purchase at a fair price. In Genlyte, Philips will gain greater access to U.S. distributors, which will increase sales of its fluorescent and next-generation light-emitting diode (LED), energy-saving light bulbs. The deal will also add to Philips's manufacturing capacity. Philips has the light bulb / lighting lead in Europe, but (understandably) it trails GE in North America. Hence the Genlyte deal underscores its commitment to compete on both continents with GE, as the market for energy-efficient lighting expands at a healthy rate in the years ahead.

One wouldn't think a light bulb/electronics company could serve as a defensive play, but that's the case with Philips (NYSE: PHG).

Amsterdam-based Philips is the world's No. 1 light bulb manufacturer and a series of converging events has put the company in an advantageous position.

First, technological advancement has driven down the cost of fluorescent light bulbs, which are substantially more efficient than the incandescent bulbs that have been in widespread residential use for decades. Second, Europe's governing bodies have mandated use of the new bulbs to reduce energy use, and hence greenhouse gas emissions. Third, growing environmental awareness among consumers has substantially increased demand for the bulbs in nations where their use is not mandated, such as the United States. Philips shares closed Tuesday down 36 cents to $40.89.