Universal Display Corp (NASDAQ:OLED) is one of the leading organic light-emitting diode (OLED) makers in the world. These are the high-quality screens that come standard on high-end smartphones and next-generation television sets.
OLED screens are becoming the standard screens for most digital devices as we move forward. There are certainly much bigger players in the space, but the big players tend to be diversified consumer technology companies. The operations of these larger companies are made up of a number of different divisions and are not solely focused on OLED technology.
Often those big producers subcontract their work to OLED. Leading consumer electronics makers directly contract with OLED to build custom screens for their products. For example, the major phone makers — Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG), and Samsung (OTCMKTS:SSNLF) — are transitioning many of their models over to OLED screens.
Since it’s now possible to build OLED screens with more creative form factors than they can with current LED technology, these same firms are also adopting the screens for the next generation of televisions.
For example, OLED screens are more flexible than LED screens. The foldable screen technology that some smartphone makers are releasing are OLED phones. While the initial launch of foldable screens may have been a bit premature, it’s certainly a sign that this technology has significant demand. And it’s a big step forward for a smartphone market that is slowing. Buying new phones for $1000 that are generally the same as the model they bought last year is getting old to consumers.
Foldable screens will be a game-changer that people will pay for again.
OLED Stock Strong Amid Trade Wars
But you need to bear in mind that this is an emerging technology, so it’s not steady growth. It has volatility because it is still working to scale up an expensive technology so it can maintain its quality and remain reasonably priced. That has been one of the challenges so far.
OLED has had its moments. In January 2018 it was trading above its current levels, above $200 a share. By July it was at $86. Since then it has more than doubled again at $186 a share.
In the past 12 months, OLED stock is up almost 124% and year-to-date it’s up 102%. These runs are big because its customers are massive compared to its $8 billion market cap. And when they’re selling product, that growth is leveraged for a company like OLED.
Its Q1 earnings numbers also came in much stronger than anticipated with large sales to South Korea and China. The demand for its products isn’t hampered by the trade war as much as they are the global economy. Chinese consumers can buy Chinese televisions, smartphones and laptops, if they have the money.
Remember, out of the top 10 mobile phone makers in the world, AAPL is the only U.S. company on the list. China has six of the top 10 phone makers, so OLED technology is going to be a big deal, even if the U.S. isn’t participating.
And that’s why my Portfolio Grader gives OLED stock straight A’s.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, 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.