It was a broadly flat U.S. stock market in the holiday-shortened week, with the Dow Jones up 0.29%, the S&P 500 up 0.29% and the NASDAQ down 0.09%. The MSCI Emerging Markets Index did, however, recover sharply, ending the week up 4.51%.
Big gainers in your Bull Market Alert portfolio included Ambarella Inc. (AMBA), which added 5.19% and also hit a new 52-week high. MasterCard (MA) fell below its 50-day moving average and moved to a HOLD.
This week’s Bull Market Alert recommendation, Integrated Device Technology Inc. (IDTI), is yet another way to profit from what I believe to be one of the most compelling big-picture themes out there.
As I’ve written before, the “Internet of Everything” is one of the biggest megatrends around, with Cisco CEO John Chambers estimating a $19 trillion market — $2 trillion bigger than the entire U.S. economy. And this is the same trend that has driven big profits for shareholders of Skyworks Solutions Inc. (SWKS) and current Bull Market Alert holding Ambarella, Inc. (AMBA).
IDTI designs, develops, manufactures and markets a range of mixed-signal semiconductor solutions for the communications, computing and consumer industries worldwide. The company has three primary areas of business: wireless communication infrastructure, data center solutions and wireless charging.
Wireless communications infrastructure involves moving around information, whether it be voice, email, text, picture, video or website content. You’ll find IDTI’s chips everywhere in your network, including in timing devices for high-speed networks and radio frequency products that deal with unwanted interference. In fact, every call that goes through a 4G network passes through a set of the company’s chips.
The data center solutions business focuses on high-performance computing. IDTI makes semiconductor solutions that enable memory to interact more quickly/efficiently with microprocessors.
Finally, IDTI is a leader in wireless charging — an area the company’s CEO Greg Waters recently called “one of the biggest new technology markets for the next few years.” This involves putting your smartphone down on, or near, a recharging surface to recharge it without the need to plug it into a charger. Ikea now is even rolling out a line of furniture with built-in charging stations. Wireless charging technology is also quickly moving toward becoming a standard feature for smartphones. Recent job listings by Apple suggest they are hiring engineers to ensure inclusion of wireless charging in the iPhone 7.
As a leading player in these fast-growing areas, IDTI is growing by leaps and bounds.
For the coming quarter, analysts expect IDTI to post a 33% sales gain to $157.9 million and an 86% earnings per share (EPS) increase to 26 cents. Full-year profit is expected to rise 78% to 89 cents a share. With the stock currently trading at a forward price-earnings (P/E) ratio of 18.29, IDTI is enticing given this kind of growth rate.
So buy Integrated Device Technology (IDTI) at market today, and place your stop at a wide $15.00.
If you want to play the options, I recommend the August $20 calls (IDTI150821C00020000), which last traded at $2.50 and expire Aug. 21.
WisdomTree Japan Hedged Equity ETF (DXJ) remained flat last week, dipping just 0.18%. Although I’ve been using currency-hedged funds in regions like Japan for quite some time, the popularity of these investment vehicles has been soaring in recent months. Investors are looking for a way to get in on the action in global markets but sidestep the performance hit of the surging U.S. dollar. Currency-hedged funds offer an answer to this conundrum. DXJ is a BUY.
Halyard Health Inc. (HYH) added 0.90%. This position gives you exposure to the effort to combat the world’s Ebola crisis. Halyard announced last week that it was awarded a large purchasing agreement with HealthTrust. This will allow HYH to provide its complete line of protective face masks to HealthTrust’s 1,350 acute care facilities and its 15,000 ambulatory surgery centers. HYH is a BUY.
MasterCard (MA) gave back just 0.25% last week, but that was enough to move MA below its 50-day moving average. This should not be any real concern, as the momentum towards global electronic payments continues to gather pace. MasterCard reports earnings at the end of the month and moves to a HOLD for the moment.
JA Solar Holdings Co. Ltd. (JASO) gave back 1.93%. JASO’s salt-corrosion-resistant solar panels passed a severe battery test last week to become the first solar panel in the industry to do so. Solar panels in close proximity to salt water wear out and degrade quickly, and this new product test gives JASO a huge leg up in this market segment. JASO is a BUY.
Ambarella Inc. (AMBA) added 5.19% last week. In the weeks between March 6 and March 30, eight Ambarella insiders, including the chief technology officer, purchased a combined total of nearly 100,000 shares of AMBA. Insiders only buy shares for one reason — because they believe they will go higher in price. AMBA is a BUY.
ProShares Ultra Nasdaq Biotechnology ETF (BIB) fell 4.44% as it tried to regain its footing from its recent significant correction. I highlighted several reasons last week why I think BIB will continue higher in the weeks and months ahead. Technically, BIB bounced right at its 50-day moving average, providing further bullish evidence for this position’s future recovery. BIB is a BUY.
Newly Updated Special Report
As a courtesy, I invite you to view the newly updated version of The Top 12 Stocks for 2015, which features three of my top investment recommendations from the recent Orlando MoneyShow, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. This report and others are available FREE on my website to you.
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