STMicroelectronics NV (ADR) (NYSE:STM) is finally getting its time in the sun. This maker of components and integrated circuits isn’t a consumer brand as much as it is a mainstay in almost all facets of consumer and industrial tech products.
And what that boils down to is that this Swiss company is a major player in the massive Internet of Things transition, as well as inventory and production monitoring technologies.
On the consumer side, you have companies like Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) that are using its motion sensors and touch screen integrated circuits in its new Switch console/handheld hybrid. On the industry side, you have cutting edge firms like Microvision, Inc. (NASDAQ:MVIS) partnering with STM to develop laser beam scanning technology to enhance products for augmented and virtual reality, as well as pico projectors (tiny digital projectors that can fit in your hand).
These are just a couple typical deals that STM has been in engaged in for decades. But the compelling thing about STM now is, the tech it has been building and perfecting, it’s time has come.
What’s the Big Deal?
For many years, people talked about how RFIDs (radio frequency identification) was going to be a massive game changer. But that revolution became more of an evolution once the global financial crisis hit. RFID circuits are used to track goods more efficiently than traditional methods.
For example, say there is a container ship arriving in port. If customs wants to see what’s in the containers, it has historically had to open some of the containers to see if it matches what’s on the manifest. But that becomes a crapshoot. Most cargo ships hold around 20,000 containers that have to be unloaded and moved out of the harbor as quickly as possible.
With RFIDs, you can simply use a scanner that can read the contents of the containers without ever having to open them up. Much faster and efficient. You may also see them in mail order packages that show up at your house. The pharmaceutical industry has begun to use them with name brand drugs and opioids to track them as they make their way to pharmacies and hospitals. STM is one of the leading makers of RFIDs.
As for the quickly developing megatrend the Internet of Things, STM has been waiting for the market to catch up to it for years. And now it has. The stock is up more than 190% in the past 12 months. But this is simply pent-up growth from years of preparation for industry to catch up with STM technology.
The other significant advantage STM has in this sector is its size. Now that companies are investing in this kind of transformative tech, they need a proven supplier that can deliver large quantities of high quality products.
And STM can deliver both.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
