Cutting-Edge Technology
The Smart Profits Report: Issue #424
Tuesday, May 29, 2007
Cutting-Edge Technology: The Hottest Trend Of 2007 In Technology & Finance
By Karim Rahemtulla
Investment Director, Mt. Vernon Research
It’s one of the leading stories of 2007… I’m not talking about the weakening economy, the rampaging stock market, or the beaten-down dollar.
I’m talking about a sector that continues to blaze a hot trail, despite fears that it’s again wandering close to “bubble territory.” One that you see featured on the news and shows like “60 Minutes” all the time. It’s exciting. It’s intriguing. It’s groundbreaking. And in many cases, it’s changing the world. That means if you know where to look, investing in it can make you a lot of money.
I’m talking about cutting-edge technology.
Tech Titans Lead The Way
When I ran a venture capital forum, I saw everything:
- Multi-platform communications systems…
- Expansive Internet security systems being tested at the United Nations…
- Hydrogen-powered boats…
- Spectacular new resin technology…
You name it, we saw it.
This year, we’ve seen the launch of Microsoft’s Windows Vista. But Bill Gates & Co. isn’t stopping there. Capitalizing on the lucrative web advertising business, the firm just bought web ad stalwart aQuantive for $6 billion. Mr. Softie is also trying to make a move into the IPTV (Internet Protocol TV) business - cutting edge technology that delivers entertainment over the Internet.
Over at Apple, the jazzy new iPhone is set to hit the market this summer. It combines a cellphone and music player, with users able to dial numbers and select features by touch, rather than with buttons.
Filtering The Fantastic From The Fluff
But the trouble with cutting edge technology is that it’s often difficult distinguishing the fantastic innovators from the fizzling flameouts. And unless you’re willing to cut a fat check and wait a few years, you may or may not see a dime of profit.
It’s high risk, for sure. And it can generate some high returns. But sometimes, there is no return and your money is either locked up for ages, or lost for good. But don’t despair… there are certainly opportunities to make big money from publicly traded companies. You just have to stay off Wall Street’s well-beaten path. Here’s an example…
Immersion Profits With Haptics Technology
In February, I wrote to you about haptics technology - a fast-growing invention making its presence felt in a wide range of applications such as video games, casinos, automobiles, the medical industry and cellphones.
In fact, Motorola just introduced its new RAZR 2, which includes haptics. And Samsung’s SCH-W559 touch-screen phone also uses haptics from a company called Immersion Corp (Nasdaq: IMMR). Strategy Analytics estimates that by 2012, 40% of the world’s cellphones will feature haptics-based touch screens, compared with only 3% today.
Haptics is basically tech-speak for tactile force-feedback. It’s the kind of technology that makes video game controllers vibrate as you play a game, thus making the action more realistic.
We’re following the progress of Immersion very closely - a company that owns the most important patents (600 in total) in the industry. When Microsoft came sniffing around, trying to wiggle its way around the patents, Immersion took them to the mat - and won through a settlement. Microsoft knew it had no shot.
So when Sony tried the same thing, it sparked a long and occasionally bitter patent infringement lawsuit. We pored through reams of court documents, patent office filings, and spent hours interviewing the company. Result? It paid off for readers of our premium content newsletter, the Xcelerated Profits Report, and is continuing to pay off.
At the end of February, Sony decided to settle out of court, handing Immersion an immediate cash injection close to $125 million. In addition, Immersion will receive royalties on all haptics-based Sony PlayStation consoles and games.
It was the news we’d been waiting for… and Immersion shares took off, shooting from $7.23 before the settlement to a current price around $11. And because we instructed readers to lower their cost through a covered call play, we’re now up 80%.
And we’re hot on the trail for more…
Two More Tech Pioneers Trading On Results, Not Dreams
We just added two more hot tech companies to our portfolio, both of which also boast cutting-edge technology, are laden with patents, and have been trading for just a few months.
They’re new, they’re undiscovered (Wall Street doesn’t have much clue about their prospects yet) and are loaded with profit potential in the months ahead.
- One is a pure medical technology play - cutting-edge all the way, with its approved device selling for $4 million a pop. When you consider the advanced technology these machines have proven to deliver and the fact that they work in a critical field, it’s a no-brainer for hospitals.
- The second company, also still in its infancy, has the potential to blow apart the communications and entertainment business. Yeah, I know you might have heard that a thousand times before, but this puppy is for real. The company has doubled its sales to $200 million between 2005 and today, and its cutting-edge technology essentially squeezes more capacity from the same cable and telecom infrastructure. As you can imagine, that’s a CEO’s dream.
What isn’t a dream, however, are the prospects for all three of these companies. They’re selling solid products, not flimsy dreams. In addition, they’re all using patented technology that offers a good measure of protection and gives them the ability to monetize the technology quickly and take any offenders to task. Just ask Sony and Microsoft.
Cutting Edge Technology Without The Torture
The last two companies are brand-new additions to our Xcelerated Profits Report portfolio, so it would be unfair to my subscribers if I revealed their names here (but if you’re interested in getting your hands on the information, see below).
My point is to demonstrate to you that the cutting-edge technology sector need not be a nerve-jangling minefield, where you’re constantly sweating over a company’s progress and share price. While another company’s technology might be better on paper, it doesn’t amount to a hill of beans unless it’s viable, it sells - and most importantly for you and I, makes us money. We’re in the business of turning these hot tech opportunities into cold, hard cash. And you’ll find us talking about them in depth in the pages of the Xcelerated Profits Report.
Good investing,
Karim Rahemtulla
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Today’s Smart Profits Action Center
- The U.S. technology sector continues to grow. In 2006, the “high-tech” industry added 150,000 new jobs - a 71% surge over the 87,400 created in 2005, according to the American Electronics Association and U.S . Labor Department. Job growth in the engineering and tech services industry hit an all-time high, while job creation in the software services industry grew for the third straight year.
- That strong industry growth is reflected in technology companies’ share prices. As the stock market has exploded to the upside over the past year, investors have renewed their interest in the technology sector. Since hitting a 52-week low of $18.85 in mid July 2006, the Technology Select Sector SPDR (AMEX: XLK) is up 33%.
- Contrary to what some in the media say, tech investing doesn’t have to be risky. You just need to know where to look (and it’s usually not where Wall Street is looking) and what to look for - a solid, in-demand product that is actually generating sales and changing the industry. That’s exactly what we did with Immersion - and are doing again with our latest two groundbreaking technology companies. For more details on how to get in at the ground floor of these excellent opportunities, check out the Xcelerated Profits Report here.
Related Articles:
- Investing In Tactile Feedback: Haptics And Other Groundbreaking Touch Technologies Rumble With Investor Profits
- Contrarian Investing Strategy: The Most Profitable Way To Invest In 2007
- Greed & Fear: Gauge The Fear And Greed Factor To Boost Your Investment Success
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