Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Tech’s Fastest Growing Sector Could Make You Rich

Companies / Tech Stocks Oct 08, 2014 - 08:35 AM GMT

By: Money_Morning

Companies

Short sellers have their knives out for GoPro Inc.

And that’s the least of the wearable sports camera maker’s problems right now.

GoPro’s share priceseems to be flopping around wildly on news: surging 11% after a new product announcement, then sinking the same after the company’s founders found a loophole that allows them to sell some of their stock early.

The stock has spiked again since then – but I don’t expect that to last.


I believe GoPro has done this well for this long – soaring more than 180% since its June initial public offering – because it is the poster child for a market sector that is set for a major boom.

According to the IDC forecasters, wearable tech will grow 78.4% through the end of 2018. If we want to get on the road to wealth that tech provides, then this is a sector we must cash in on.

But I don’t want us to get hurt by messing with a risky stock like GoPro.

That’s why today I’m going to show you a way to play the entire wearable-tech sector with a single investment that offers both safety and big profits…

Way Beyond Action Cameras

Don’t get me wrong. I love GoPro Inc. (Nasdaq: GPRO) as a company. I like its story and I’m a fan of its technology – wearable cameras that “extreme” cyclists, surfers and skiers use to capture and post their incredible stunts.

In this market, however, we just can’t justify paying 80 times forward earnings. And besides being a risky stock, GoPro is just a start to the world of wearable technology.

That became abundantly clear Sept. 9 when Apple Inc. (Nasdaq: AAPL) introduced the Apple Watch. Due out next year, the smart watch can be integrated with the iPhone, used with the new Apple Pay mobile-payments system and loaded up with dozens of goods from the App Store.

More to the point, I think it will be a huge success. Morgan Stanley agrees, saying that the Cupertino, Calif.-based tech giant could sell 30 million to 60 million Apple Watches in the first year alone.

That’s huge.

According to the researchers at ON World,consumers purchased just 4 million smart watches last year. But ON World predicts shipments will hit 330 million in 2018 – a stunning 8,150% increase in just five years.

And that’s only one segment of the wearable tech market. Wearables also include medical devices, fitness and health monitors, GPS trackers and virtual-reality headsets.

Google Inc. (Nasdaq: GOOG) has several fingers in the wearables glove. You know Google Glass. Worn as eyeglasses, the system displays text messages and maps, takes notes, records video, takes pictures and displays video.

And Google is using its Android operating system to make an ecosystem play. Android Wear is designed to work with wearable devices from several developers and makers.

As much as I like GoPro, Apple and Google, it’s important to note that we’re still at the dawn wearable tech.

It’s a bit early to try picking the winners from the losers. What we’re looking for now is a way to capture as much upside as possible from the whole sector.

That’s where the Vanguard Information Technology ETF (NYSE Arca: VGT) comes in. It’s an exchange-traded fund composed of 90% technology stocks, most of which are based in the United States.

Vanguard Info Tech has some 413 holdings, but more than half of its assets are in the fund’s top 10 stocks. For instance, Apple and Google make up 22.6% of the ETF’s holdings.

That right there gives us two major wearable plays. But Vanguard Info Tech holds at least four other wearable leaders. Take a look…

Wearable Vanguard No. 1: Intel

After nearly striking out on the mobile revolution, VGT holding Intel Corp. (Nasdaq: INTC) wants badly to sell its Edison semiconductor chips to wearable developers.

And to bolster and promote the entire sector, Intel is sponsoring the Make It Wearable contest, with a $500,000 grand prize for the most innovative product.

Besides selling chips, Intel is also making some moves into consumer products.

Earlier this year, the world’s leading semiconductor firm acquired Basis Science Inc. That $100 million play gives Intel a line of wearable fitness devices.

Intel plans to further expand into wearables with a line of MICA smart bracelets. The fashion-centric line is the highlight of Intel’s recent partnership with watchmaker Fossil Group Inc.(Nasdaq: FOSL) and clothing retailer Opening Ceremony.

The Santa Clara, Calif.-based company also offers Jarvis, a smart headset that functions similarly to digital assistants like Apple’s Siri and Google Now.

Wearable Vanguard No. 2: Microsoft

Meanwhile, Microsoft Corp. (Nasdaq: MSFT) is focused on the software aspect of wearables. Like Intel, Microsoft largely missed the mobile revolution, but it has no intention of making that mistake with wearables.

Microsoft recently released a software suite for wearable devices, primarily smart watches. OneNote, a free app designed for Android Wear, is being offered through Google Play.

At the same time, Microsoft will soon release its own smart watch. The sensor-laden device will serve as a fitness tracker and will sync with iPhones, Android phones and Microsoft’s own Windows Phone system.

Wearable Vanguard No. 3: Garmin

Primarily known for navigation devices, Garmin Ltd. (Nasdaq: GRMN) is not only leveraging off its GPS expertise. With wearables, it’s also focused on fitness and health, which is the company’s fastest-growing division.

For instance, Garmin’s fitness bands allow users to track their physical activity, including daily number of calories burned and steps taken as well as sleep patterns.

The company clearly picked a growth segment. According to market forecaster Canalys, we bought 1.8 million smart bands like those made by Garmin last year. That number will likely climb to more than 45 million by 2017.

Garmin also makes several sport watches that feature GPS tracking and fitness monitoring. And its Forerunner watches feature touchscreen technology that helps swimmers improve their stroke.

Wearable Vanguard No. 4: Ambarella

And then there’s Vanguard Info Tech’s backdoor play on GoPro – our old friend Ambarella Inc. (Nasdaq: AMBA).

Ambarella makes the video-processing chips that make GoPro’s cameras such a success.

And the company goes well beyond the wearable market. It makes video processing chips used in just about every digital camera we own – auto backup cameras, surveillance cameras, smartphone cameras, TV broadcast cameras.

And that, in turn, reinforces one of the great selling points of Vanguard Info Tech – diversification.

This ETF not only gives us a broad play on wearables but also covers a wide swath of other technology, including software, semiconductors, cloud computing, Big Data and mobile.

Trading at roughly $98.50 a share, Vanguard Info Tech is well ahead of the overall market. Over the past six months, it has doubled the S&P 500‘s 3% return, and it’s nearly 40% ahead of the market over the past year.

With its lineup of top tech names – and a concentration in tech’s fastest-growing sector – this is a great long-term play.

Vanguard Info Tech is an investment that captures the quick profit potential in wearables while still helping you build a solid investing foundation.

Throw in market-beating performance and you have a real winner on your hands.

Do you own any wearable tech? Are you going to buy an Apple Watch for yourself or a grandkid when it debuts? Even better, are you invested in any wearable companies? Let me know in the comments below.

Source : http://www.wallstreetinsightsandindictments.com/2014/10/lets-watch-big-bank-fixers-scramble-flee/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in