If one thing is certain, 2015 will see a far more volatile market than we’ve seen for the past seven years.
The underlying issue to growing volatility is that central banks that were once stimulating in unison are now going their own ways. Big players could count on central banks’ single-minded stimulus policies to determine their investments as the world dug out together.
Now, the central banks are moving out of synch with one another, which is causing turmoil with the big money. And the big stocks that were the cash rich kings of safety are now getting hurt as far-flung operations aren’t generating the steady revenues they once were since currencies are starting to spiral.
But given the strength of the dollar and the fact that the U.S. economy is doing better than all of its peers, the U.S. will remain the best place to invest for some time to come.
The twist is, some sectors that have been under-followed are now getting the attention they deserve. The tech sector is one of them.
As witnessed by Apple Inc.’s (NASDAQ:AAPL) results for Q4, it’s still possible to sell outside the U.S. (and inside) and make a lot money. And that’s what these companies have in common — they’re selling their wares in the U.S. and abroad at impressive rates, in sectors that are in high demand and growing.
Vasco Data Security International, Inc. (NASDAQ:VDSI)
Vasco Data Security International, Inc. (NASDAQ:VDSI) is one of the leading data security companies in the world. More than half of the world’s top 100 banks use VDSI security authentication software, and Vasco now operates in more than 100 countries worldwide.
And now that Vasco has made a name for itself in the financial sector, Vasco has turned it sights to other value rich sectors like healthcare, retail,E-commerce and governments.
There are few things more crucial in today’s world than data security both from a consumer and institutional perspective. That also means clients will pay a premium for good rather than save a few bucks for a bargain. And when you have a name and reputation like VDSI, you’re able to fully price your value, which helps keep your margins high and earnings rolling in.
For example, in Q3 (Oct. 28, 2014) VDSI reported earnings of 28 cents per share, trouncing the consensus estimate of 10 cents per share. In Q3 of 2013, VDSI booked a mere 8 cents per share. Vasco had revenue of $52.60 million for compared to the consensus estimate of $42.80 million. Vasco’s revenue for the quarter was up 34.2% on a year-over-year basis.
Vasco may not be able to keep up that breakneck pace, but there’s no doubt plenty of headroom for VDSI stock.
Ambarella Inc (NASDAQ:AMBA)
Heard of GoPro Inc (NASDAQ:GPRO)? Own a GoPro camera?
Well even if you don’t, I’m guessing you know what they are and how they have taken over the Internet video world.
What you may not know is that GoPro builds the cool cameras and systems on a chip from Ambarella Inc (NASDAQ:AMBA). And what AMBA has done for consumer video, it’s doing for all facets of the professional market as well.
Have you heard about the goal of putting small cameras on police officers around the nation? Well, AMBA will be a major player in getting that done.
All of Ambarella’s divisions — Security Cameras, Automotive Cameras, Sports & Flying Cameras, Wearable Cameras and Broadcast Infrastructure Solutions — are well-positioned for growth.
One caveat: short positions in AMBA stock have increased to more than 35% in recent days. That’s a big bet against AMBA stock, which means Ambarella will be volatile for a while. If AMBA stock disappoints, it will sell off hard and fast (and offer a bargain buying opportunity).
If Ambarella reports good Q4 numbers on Feb. 19, AMBA stock will soar on all the short covering.
Electronic Arts Inc. (NASDAQ:EA)
Without a doubt, the video game publishing juggernaut at this point is Electronic Arts Inc. (NASDAQ:EA). And Electronic Arts’ earnings — just released today — confirm it.
EA stock reported$1.43 billion in Q3 — more than its $1.28 billion projection and more than the $1.29 billion consensus analyst estimate.
What’s more, beyond the fact that EA sold a lot more games during the holiday season than anyone expected, its recent numbers also show that Electronic Arts is keeping up with the newest trend toward buying games online, rather than buying DVDs for consoles.
Almost half EA stock’s revenue in the quarter came from digitally-distributed games, which is significant because it opens up the mobile gaming space and also increases margins since you don’t have burn and package DVDs or rent shelf space or deal with logistics of physical packages moving hither and yon.
While EA stock is already up more than 115% in the past year, given Electronic Arts’ smart moves into the digital and mobile gaming spaces, as well as the new gaming station upgrades — and the Super Bowl this new quarter — EA is firing on all cylinders.
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.
