“Will we need to learn to drive?” my son asked me recently.

Before I tell you what I told him as an answer, I want to give you an idea of why he asked me this question.

You see, right now, we’re at a moment when things that once seemed permanent are now in question.

Cars and driving are one of these things. Just to get a sense of car history, consider this:

Nelson Jackson, Sewall Crocker and their dog, Bud, made the first successful transcontinental automobile trip in 1903. Car technology was primitive. They relied on stagecoaches to ferry spare parts.

One time a cow had to tow them. And another time, a team of horses had to be sent to get them out of a Vermont bog. The 4,500-mile journey took 63 days, 12 hours and 30 minutes.

Few then would have imagined what would happen next.

An Insane Level of Growth

Incredibly, the U.S. went from 800 cars in 1900 to 458,500 in 1910 to 8.2 million cars by 1920 to 253 million now. That’s an insane level of growth.

And car growth has exploded even higher in recent years. In 2016, U.S. vehicle sales totaled 17.55 million. That beats 2015’s record of 17.47 million and was the seventh consecutive year of unprecedented growth.

However, I’m incredibly pessimistic about car sales because I believe that we’ve seen their peak.

In 10 years, we’ll have fewer cars on the road. And fewer still in 20. That’s why I told my son it’s unlikely he’d need to learn to drive.

The reason I’m so pessimistic is because new innovations are going to wipe out cars as we know them.

A Total Wipeout for the Auto Industry

The average price of a car is $35,000, but the costs of traditional car ownership go far beyond the price tag. There is also interest paid on car loans, insurance, taxes, fuel and maintenance. Some expenses are nonobvious, such as parking, property taxes and construction costs for home garages, and the value of our time.

And according to research by the Bureau of Transportation Statistics, our cars are only used for about 4% of the day.

In other words, buying a car is one of the most wasteful expenses imaginable. If you take the 4% number at face value, it means a total wipeout for the auto industry. That’s because it means we could get by with 96% fewer cars if we had a system that uses the cars we own optimally.

This same study also says that, right now, as many as 25% of people are better off using ride-sharing services. These are services like Uber and Lyft that you can call from your smartphone.

I believe this study is right. The automobile of today is the equivalent of the horse and buggy-based transportation system of the 1800s. It’s primed to be replaced by a new transportation system that’s driven by electric, self-driving, internet-connected cars that will completely change transportation and, in time, life as we know it.

Waymo, the autonomous car unit of Google parent Alphabet, already has plans to start testing a new kind of transportation system.

“Because you’re accessing vehicles rather than owning, in the future, you could choose from an entire fleet of vehicle options that are tailored to each trip you want to make,” said Waymo CEO John Krafcik. People could claim the cars for a day, a week or even longer, he said. And, according to Krafcik, driverless cars could be completely redesigned, such as to include a dining area.

Now, many of you will think that this forecast is too strong. You’ll think that just because cars have endured for as long as they have, they’ll continue to be something that people rely on. And because of that, you’ll be tempted to buy car-company stocks as they go down.

However, don’t buy these stocks, however cheap they look. They are doomed.

Regards,

Paul Mampilly
Editor, Profits Unlimited

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill 

My father’s dream was to build his own house.

However, building a house in India was an incredibly complicated affair.

First, you had to buy a plot of land. Next, you had to get an allocation from the government for all the materials you needed to make a house — cement, steel rebar, piping, you name it.

It was all in short supply because of India’s socialist economy, along with a quota system to dole out the limited quantities then available. And then to get your water, sewage and electricity connected … that was yet another ordeal.

Simply getting all this together was an enormous effort that took years. Of course, there was an easier way…

You hired a “fixer.”

With a fixer, what might have taken two or three years instead took just a few months.

Still, with all that, the house my father built took years to finish. However, today, a new technology is emerging that can shrink build times and make constructing a home much cheaper.

The Incredible Costs of Rebuilding

That technology is 3-D printing.

And this technology may suddenly become mainstream because of the incredible damage to housing that Hurricanes Harvey, Irma and Maria have done in 2017.

Harvey is estimated to have completely destroyed 12,700 homes.

Irma is estimated to have destroyed 25% of all homes in the Florida Keys.

Maria is estimated to have caused damage worth as much as $30 billion across the Caribbean.

Dominica, an island that I’ve been to go hiking and canyoning, experienced a near 100% loss of houses and buildings. It’s unlikely that Dominica can afford to reconstruct itself using the old-fashioned, traditional way of building houses and buildings. It would cost too much money, and it would take too long.

However, Cazza, a 3-D printing company, could have a solution.

Using Cazza’s X1 robot, 3-D printed buildings like houses, villas, shelters, warehouses and commercial buildings can go up in as little as one week.

Cazza believes that using its 3-D printing technology will save as much 40% on the old, traditional ways of building.

That’s a $20,000 savings on a house that costs $50,000 to put up. And remember, the 3-D printed model gets you your house in a week instead of months or years.

The current estimate for the still-incomplete hurricane season is already as much as $340 billion.

If you assume that 30% of this damage is destroyed homes and buildings, implementing 3-D printing technology like the Cazza X1 to rebuild will save as much as $40.8 billion. That’s a big deal.

This is why I’m watching the 3-D printing technology used on homes and buildings carefully. Because, in time, the techniques used to rebuild from disasters are also going to be used to make regular homes less expensive too. And the company that makes the 3-D printing technology is going to have a stock that soars for years.

These are the kinds of companies that I focus on for my readers across my publications. Join me if you’d like to get in on these kinds of incredible technologies that also deliver real, meaningful benefits to people.

Regards,

Paul Mampilly
Editor, Profits Unlimited

Right now, an untapped ocean of energy—found underneath all 50 states—is about to transform the world’s energy industry. In fact, there’s enough of this energy in the first six miles of the earth’s crust to power the United States for the next 30,000 years. Wanna know this untapped energy source? Learn NOW! And as companies rush to extract this energy from the ground, they’ll need the help of one Midwestern company’s technology to make use of it. This is your chance to take advantage of John D. Rockefeller-type fortunes. Early Bird Gets The Worm...

Source: Banyan Hill 

Amazon.com Inc. (Nasdaq: AMZN) isn’t a regular company. It’s a tech company. But it’s run by Jeff Bezos, a financial engineer.

Prior to founding Amazon, Bezos worked on internet-enabled business opportunities at the hedge fund company D.E. Shaw & Co. This was when the internet was brand-new. He left D.E. Shaw in 1994 to start his own internet-enabled business.

Bezos saw the opportunity for technology to disrupt retail. But he also saw the financial opportunity from a 1992 Supreme Court ruling that exempted mail-order companies from collecting state sales taxes unless they operate a physical location in the state.

It’s the marriage of an investment banker’s mind with technology that makes Amazon unique. It’s also what indicates Amazon stock could increase by 50%.

The chart below shows how an investment banker would value Amazon. Price is the blue line.

In the chart, the green area shows the total enterprise value (TEV) to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio. This ratio is about 12% below its 10-year average. It’s 40% below its high.

TEV/EBITDA is how an investment banker values a company. TEV is the price to buy the whole company, considering any bonds that are outstanding and other ownership stakes. EBITDA is a rough measure of the cash an owner of a company allocates.

Bezos knows he wants to allocate cash flow to maximize TEV. He’s the perfect guy to run Amazon. He evaluates opportunities based on cash flow rather than technology.

Ratios like TEV/EBITDA are mean-reverting. That means they move above and below average.

Right now, the ratio is well below average. I expect it to move to an above-average level. That indicates Amazon could rally 50% from its current price.

Using call options could magnify the gains, leading to gains of 500% or more. My Precision Profits readers understand how even small moves in stocks can lead to large returns. They enjoyed a gain of more than 400% in Microsoft Corp. (Nasdaq: MSFT) in less than a week after the stock gained 7%.

Regards,

Michael Carr, CMT
Editor, Peak Velocity Trader

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill

You often hear buzzwords like the Internet of Things (IoT), but may wonder what the heck it really means. Probably the simplest definition for it is that the IoT describes a growing network of connected “things” that contain sensors, chips, processors and the ability to interact with other “things” on a network.

With each day that passes, more and more “things” become connected to the internet. Today, these include not only your computer and smartphone, but very possibly your car and your home appliances. Last year, there were an estimated 18 billion devices capable of receiving and sending data. That number is expected to soar to more than 75 billion in 2025, according to research firm IHS.

In fact, the home market for smart devices is forecast to be a $125 billion one by 2022. But the much bigger opportunity for you as an investor will reside in the business applications of the Internet of Things, which goes by the name of the Industrial Internet of Things or Industry 4.0.

The number of connected devices here is growing exponentially. According to the research firm Gartner, there were 2.4 billion connected devices being used by businesses in 2016 and a forecast 3.1 billion in 2017. That number is expected to more than double by 2020, to 7.6 billion.

Industrial Internet

The reason behind the growth is simple. IoT sensors in devices constantly gather data, which businesses can crunch using machine learning to discover more about their customers, machines and supply chains. In theory, this should lead to better decisions and more efficiency and profits.

The pace of spending by businesses on IoT varies depending on whose research you read. Technavio believes the market value of the IoT will be $132 billion in 2020. Gartner says more than $440 billion will be spent on IoT in 2020. The Boston Consulting Group forecast that annual spending on IoT will hit nearly $300 billion by 2020. And IDC says global spending on IoT will reach $1.29 trillion in 2020.

 

While the numbers vary widely, the takeaway is as Bill Ruh – chief digital officer for General Electric (NYSE: GE) – told the Financial Times, “It’s a huge opportunity for all industrial companies.”

It is also a huge opportunity for the established cloud computing giants like Amazon.com (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT) and Alphabet (Nasdaq: GOOG). They are the biggest providers of Internet of Things platforms.

But I question whether industrial companies will want to become too dependent on the tech companies with whom they may become competitors someday soon. The auto companies are already in a battle with Silicon Valley for future control of the vehicle market.

And I’m sure companies like GE do not like the fact that tech firms are offering predictive maintenance technology that competes directly with its Predix Industrial Internet of Things platform designed specifically to interpret industrial data.

Choosing the Right 3 Stocks

There are a number of ways you can approach investing into the IIoT. Here are just three of them, approaching the future of the Industrial Internet of Things from three different angles.

First, of course, there is more to the Internet of Things story than all the good things. There is the dark underside of having billions of connected “things” – increased hacking and cyberattacks.

This past summer, there was a report about a casino that got hacked through a fish tank! Hackers gained access through an Internet-connected aquarium, which had sensors connected to a PC that regulated tank conditions such as temperature, the amount of food and cleanliness.

So at the top of my Internet of Things list to buy is something related to cybersecurity. A good, broad-based choice is the ETFMG Prime Cyber Security ETF (NYSE: HACK).The fund’s portfolio consists of 35 stocks and an expense ratio of only 0.60%. The ETF is up nearly 15% year-to-date.

Among the top positions in HACK’s portfolio are leading companies including FireEye (Nasdaq: FEYE), which is currently helping Equifax, Symantec (Nasdaq: SYMC) and Check Point Software Technologies (Nasdaq: CHKP).

Next on my list is an industrial company that is hitting on all cylinders and a major player in the Industrial Internet of Things – Honeywell International (NYSE: HON). Its stock has climbed about 24% so far in 2017. While Honeywell recently announced the spinoff of its home heating and security business as well as its turbocharger unit, the company currently is divided into four divisions:

Aerospace (36.5% of revenues) is a major global provider of integrated avionics, engines, systems and service solutions for aircraft manufacturers, airlines, military, space and airport operations.

Performance Materials and Technologies (22.2%) offers technologies and high-performance materials such as hydrocarbon processing technologies, catalysts, adsorbents, equipment and services.

Home and Building Technologies (27.1%) offers environmental and energy solutions, security and fire, and building solutions.

Safety and Productivity Solutions (14.2%) includes sensing & productivity solutions and industrial safety, as well as the recently acquired Intelligrated business, leader in warehouse and supply chain automation.

Specifically related to IIoT, Honeywell offers sensors and automation control products as well as process solutions similar to GE’s Predix. It is also working with companies like Intel (Nasdaq: INTC) to expand its IIoT offerings.

On the technology side, I’d feel comfortable owning another company hitting on all cylinders, Microsoft. Its stock has jumped 25% so far in 2017.

Its CEO, Satya Nadella, is well on the way to restoring its former glory. As mentioned before, it is a growing powerhouse in cloud computing and is deeply involved in the Internet of Things with its Azure IoT Edge for industrial applications. Its new technology delivers artificial intelligence (AI), machine learning and advanced data analytics via the cloud to local computing devices.

And Microsoft is among the early leaders in field of quantum computing. Nadella describes quantum computing this way in a Financial Times interview: If you think of computing problems as a corn maze, a conventional computer would tackle each possible path, turning back when blocked. A quantum computer will take all the paths at the same time, making even the most complex problem solvable quicker.

Whichever of three paths you choose to invest in the Industrial Internet of Things, I believe, will be a profitable one. But if you’re interested in my top recommendations in the sector, I reveal those in Growth Stock Advisor.

You’ve probably already heard about the Internet of Things, however as we’ve discussed above it’s the Industrial Internet of Things where the real investing opportunities are. Sure, networked fish tanks, baby monitors, and iPhone connected doorbells are interesting, but the truly groundbreaking – and profit making – application of the Internet of Things will happen in industry. In fact, it’s already happening but if you don’t work in a modern factory then you’re probably not witnessing it. And that’s where early investments can pay off… placing where most people aren’t looking and getting in before the Wall Street crowd and financial news organizations start jawboning investors to pile in. And it’s how my readers and I are already making money from our Industrial Internet of Things portfolio.

It’s part of a bigger movement. One that will change how you work, where you live, what you eat, how you communicate, how you get from A to B, even how you sleep. And it will pressure governments and society to adapt quickly or fall by the wayside and risk irrelevance. I call this monumental shift “The Singularity”: the convergence of everything – all driven by the rapid ascent of technology and profit motive.

The Singularity presents investors with the opportunity for a pieces of the over $100 trillion growth over the next seven years. Some of that will derive from the Internet of Things, some from other sectors. That’s why I’m so actively uncovering every investment I can with this space. I’ve recently completed research on The Singularity that lays everything you need to know to get started… the technologies of the future, the pace of change, and the investments you can make right now – today – for a very profitable future. Click here now for access.

Author: Tony Daltorio.

Tony is a seasoned veteran of nearly all aspects of investing. From running his own advisory services to developing education materials to working with investors directly to help them achieve their long-term financial goals. Tony styles his investment strategy after on of the all-time best investors, Sir John Templeton, in that he always looks for growth, but at a reasonable price. Tony is the editor of Growth Stock Advisor. 

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Twenty years ago, we arrived on the surface of another planet. This marked one of the most important moments in space exploration history. It was 1997: the first successful touchdown on Mars via the Pathfinder rover.

Now, space exploration has expanded beyond our own government program, NASA. It has become the passion of some of the most revered, forward-thinking minds in the world.

In 2000, Amazon CEO Jeff Bezos began a side project called Blue Origin. Although most of its activities are kept somewhat secret, Bezos has stated that its near-term goals involve space tourism and satellite TV. Then, in 2002, Elon Musk began a company called SpaceX. This company was started with the sole purpose of colonizing Mars, even before Musk founded Tesla.

Right now, a main goal of NASA is to be the first to have a manned Mars mission. And now, there is increased competition from private companies, SpaceX in particular, as well as a multinational race, similar to that of the race to the moon.

It would be great to be able to invest in a company with such a unique and monopoly-like focus as SpaceX and Blue Horizon, but unfortunately that’s not an easy option; these companies are not publicly traded. However, I believe the next best option is investing in the systems that make these companies’ rockets “go.”

Rocketing Into History

About 98% of the material that’s launched into the sky during liftoff is related to propulsion. And it doesn’t just get the rocket off the ground. Complicated propulsion systems are also necessary to maneuver the ship once it’s in space.

With this being said, I believe I’ve found the best investment in the space industry right now.

It’s a relatively small aerospace and defense company here in the United States. Its specialty is propulsion systems, which comes in handy when working with rockets and other space-traveling vehicles. In fact, it’s the largest producer of space propulsion and power systems in the U.S.

The company also has a huge client for whom it does most of its business: NASA.

In the past, most of the business it has done for NASA involved the space shuttle. This includes 30 trips to and from the International Space Station; it also supplies the batteries used to keep the station running. In fact, the propulsion system that it designed and built guided the shuttle for 135 missions with a 100% success rate, making it the world’s most reliable rocket ever built.

But going forward, one of the major reasons for demand will be American-manned space launches. Although we have not had a manned space launch since 2011, this activity will be revitalized with the goal of making it to Mars.

This will be done via NASA’s Space Launch System (SLS), which is expected to take off for the first time in 2019. But the SLS is just the launching vehicle; the crew capsule that will carry the passengers is called Orion, and the company I’m recommending today is making the propulsion system for just about every component for both of these crafts.

It really is making history with this project, as no manned spacecraft has ever been designed to take humans into deep space, potentially to Mars and even the asteroid belt.

Another project this company has been selected to work on is the propulsion system for the Defense Advanced Research Projects Agency (DARPA)’s Experimental Spaceplane. In this project, it is collaborating with Boeing to make a hybrid airplane/traditional launch vehicle that will be used to send military satellites into space.

The Defense Department’s goal is to have this vehicle fully functional and tested by 2020. So, while this is a smaller project, it is still something coming up within the next few years.

A Sudden Growth Phase

Of course, any company can sound like a great investment, but it still has to be financially stable to actually be a great investment.

That’s why I believe Aerojet Rocketdyne Holdings Inc. (NYSE: AJRD) is on the verge of newfound growth in revenue due to the revitalized space program.

This year, its first-half sales increased by 13% after just 4% growth over the previous two years combined. And over the past year, expectations for revenue have grown from $1.78 billion to $1.9 billion. A year ago, Aerojet wasn’t supposed to make $1.9 billion until 2020.

You know a company is in a sudden growth phase when its expected revenue is accelerated by three years. And Aerojet has already booked $4.3 billion worth of future projects.

Lastly, when a company enters a growth phase, it’s important to make sure it has enough cash to fund its future operations. Over the past two years, Aerojet has brought in over $350 million in cash from operations, essentially doubling its cash position in anticipation of its projects ahead.

Looking at Aerojet’s stock price, it’s obvious that the market has discovered the company’s growth potential. The stock has gone up about 100% over the past year. But I still believe it has plenty of room to grow going forward.

As a company, Aerojet is still valued at only $2.4 billion, which is less than 1.5 years’ worth of revenue. And soon enough it’ll be making more than that in just one year.

Overall, in the aerospace and defense industry, it is the seventh-cheapest company in terms of valuation out of 28 companies, and that’s after its price went up 100% in the past year.

Clearly, as Aerojet continues to grow, more and more investors will realize its potential and buy into its stock.

Regards,

Ian Dyer
Internal Analyst, Banyan Hill Publishing

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill 

Analysts give Amazon.com Inc. (Nasdaq: AMZN) a lot of credit these days.

The company can single-handedly alter a business environment overnight … or at least that’s what analysts would lead you to believe.

Amazon’s latest market-moving announcement was that it was close to deciding on entering the online pharmaceutical drug marketplace.

Let me repeat that.

Amazon is “close to deciding.” It hasn’t even decided yet.

But that didn’t stop stocks like CVS Health Corp. (NYSE: CVS) from dropping over 7% in the days following the news. It’s as if analysts think whatever Amazon touches is automatically changed forever.

That’s simply not the case.

The reality is that Amazon is not afraid to fail. That’s what has made the company the giant it is today.

But it’s also given Amazon a long track record of failures when it comes to entering a new market.

As I’ll show you in a second, there are many failures as examples.

But it’s this history of failure for the company that causes me to see these attempts to enter new markets as an opportunity to buy the same stocks that were sold off on the announcement, despite what analysts say.

Let me explain…

Epic Fail

I’ll start with a list of Amazon’s failures over the years since these don’t seem to come up often when an analyst is praising the company.

The Fire Phone is probably the biggest.

Expected to compete with the iPhone and Samsung phones, and met with much praise right out of the gate from Amazon users, it ended up being a big flop. At one point, Amazon couldn’t even give the phone away for $0.99. Amazon wrote off $170 million for its failed attempt into the smartphone market.

It launched Destinations in 2015 to be a marketplace for hotel deals. This failed in just six months.

Amazon Local was launched in 2011 to take on Groupon and LivingSocial. That was deemed a failure in 2015.

Amazon Wallet was a mobile wallet to compete with Apple Pay and Samsung Pay. After just six months of being on the market, it was shut down and considered a failure.

Amazon Local Register was set to compete with Square Reader, an attachment on your mobile device to accept credit cards. In 2016, this product was shuttered and called a failure as well.

And these are just a few of its failed forays into new markets.

Some other failed attempts are Music Importer, TestDrive, WebPay, Endless.com, Askville and Kozmo.com. This list doesn’t include failed ideas that never made it to the market, or ideas that are currently on the market but have failed miserably at living up to analysts’ expectations.

For example, Amazon entered the food delivery space in 2015, attempting to make companies like GrubHub Inc. (NYSE: GRUB) irrelevant. But GrubHub still controls about half of that market thanks to a recent acquisition, compared to Amazon’s 11% market share.

And then there’s handmade goods.

Amazon entered this market in 2015 with Handmade at Amazon, and analysts were positive it would be the end for Etsy Inc. (Nasdaq: ETSY). But Etsy, the first to make homemade goods widely marketable and which Amazon was chasing, continues to thrive, with expected sales growth of more than 15% each year for the next three years.

To Amazon’s credit, it has gotten some things right — like selling books, an online marketplace and the cloud.

But the list of things it has gotten wrong is much longer.

That’s the reason why when Amazon wants to enter a new market, it doesn’t faze me.

A Lot of Red Tape for Amazon

And that brings me to your opportunity today.

With Amazon’s mention of the pharmaceutical drug space, CVS plunged on the news.

Look: Even if Amazon does make that move into the pharmaceutical drug market, it doesn’t mean everyone suddenly stops going to CVS.

CVS is the largest, and most diversified, pharmacy chain in the U.S. With 9,700 pharmacies across the country, it also has over 1,000 MinuteClinics to quickly get patients looked at for minor issues without having to go out of your way to go to a doctor’s office — which I think we can agree everyone hates doing.

Besides being able to get checked for an illness at the pharmacy, you can get your prescriptions filled almost right away.

CVS also has a mail-order segment, which is what Amazon wants to compete with, and a long-term care focus, among other specialty needs.

I know Amazon is all about online sales. But there is a lot of red tape, which I’m sure is what Amazon is looking at, about dropping pain meds on someone’s doorstep — most regulators don’t want pills ending up in just anyone’s hands.

So, there is a wall of red tape around that process, and CVS and others are working on breaking through that as well. So Amazon won’t be alone there.

That’s why I still like owning CVS even if Amazon enters the market. Because as Etsy, GrubHub and Amazon’s countless other failures have proven, not everything Amazon touches is disrupted.

And at this point, Amazon still may avoid this market altogether, and that announcement could send CVS popping 10% higher practically overnight.

Regards,

Chad Shoop, CMT
Editor, Automatic Profits Alert

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill 

Comfort is a double-edged sword.

On one hand, comfort is a reward for a job well done. A chance to sit back on one’s laurels and take it easy for a while, secure in the knowledge that your job, income, investments, etc., will take care of themselves.

On the other hand, comfort breeds sloth. It invites a level of overconfidence and carelessness that can be devastating to your job performance, income streams and investments, if allowed to fester.

Like many investors, I’ve grown a bit too comfortable this year. Not only have I been loath to leave the comfort of my home office and my daily routine, I’ve grown way too accustomed to markets hitting all-time highs every other week.

This week, I’m shaking things up a bit. I’m writing to you from a cozy little cabin in the Smoky Mountains just outside of Gatlinburg, Tennessee. I’m sitting at a stylized log-cabinesque kitchen table as my family enjoys the outdoors in a cold mountain stream right behind our back door.

With the change in setting comes a change in perspective. We’ve become too accustomed to riding the coattails of big-name tech companies in 2017. As I noted last week, market leaders like Facebook Inc. (Nasdaq: FB), Alphabet Inc. (Nasdaq: GOOGL) and Microsoft Corp. (Nasdaq: MSFT) might be all that stand between us and a major market correction.

When It Comes to IPOs, It’s Quality Over Quantity

Investors were scared off from the initial public offering (IPO) market early in the year. It’s not hard to see why. Both Snap Inc. (NYSE: SNAP) and Blue Apron Holdings Inc. (NYSE: APRN) were extremely hyped heading into their respective IPOs, and both turned out to be abject failures for investors.

Another issue that investors have clung to is the diminishing number of IPOs. Since 1996, the number of companies going public dropped from more than 8,000 to about 4,400 last year. That number is expected to fall even further in 2017.

The latter issue can be attributed to a wealth of funding from private offerings — due to the current easy-money environment from the Federal Reserve — and a wealth of red tape. In fact, the head of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, and the president of the New York Stock Exchange, Tom Farley, said that they believe regulations are the No. 1 reason for the decline in IPOs.

But if red tape was really the issue, no company would ever go public.

In fact, the problem with this year’s class of IPO offerings has been quality, not quantity. Snap emerged on the scene only to be copied heavily by Facebook and every other social media company on the market. Blue Apron, meanwhile, was smacked down by Amazon Inc.’s (Nasdaq: AMZN) acquisition of Whole Foods Market.

But when you look beyond this disappointing duo, you find that there are excellent opportunities to be had.

Roku Inc. (Nasdaq: ROKU)

ROKU stock was priced for an IPO of $14 per share. However, Investors weighed concerns about the company’s future ahead of the stock’s launch and decided that Roku has plenty of potential. The shares surged 68% in their public debut, closing at $23.50. ROKU stock has since consolidated nicely despite its ups and downs.

While concerns about content and competition remain for the set-top box maker, Roku has done more than hold its own against much bigger competitors. In fact, Roku had a 32.6% market share of America’s 150 million connected-TV users last year — ahead of Google Chromecast (29.9%), Amazon Fire TV (26.3%) and Apple TV (19.9%), according to research firm EMarketer.

Once the company starts focusing on content — and potentially its own licensed content — it’s off to the races.

Switch Inc. (NYSE: SWCH)

Data centers are big businesses … just ask IBM, Amazon and Alphabet. But legacy data centers are long overdue for disruption. That’s where Switch steps in.

The company offers ultra-advanced, high-tech data center solutions focused on security and sustainability. The company also manufactures all its own data centers using patented technologies, simultaneously increasing margins and cutting down on costs.

It’s part of the reason why SWCH stock jumped 44% during its IPO. Switch currently owns three large high-tech data centers and is developing a fourth. Furthermore, Switch’s SEC filings show that it has been profitable in every quarter of its existence, save one where it paid $27 million to unbundle its power use from Nevada’s grid. This level of profitability and growth should be music to investors’ ears.

Coming Down the Pike

As with most IPOs, SWCH and ROKU will bounce around for a while, providing opportunities for those who missed out on the initial surge. But if you are looking to get in on the ground floor of an IPO later this year, there is at least one “do” and one “don’t” to keep in mind.

Do consider database specialist MongoDB. Why? The company operates what is called a NoSQL database that is poised to disrupt old-school database firms like Oracle and Microsoft. While this may not sound flashy, MongoDB makes the most popular NoSQL software on the market.

Don’t consider HelloFresh. Why? HelloFresh is basically another meals-to-order company like Blue Apron. The firm claims that its IPO will be different than Blue Apron’s, but the business model is essentially the same. What’s more, the real reason that Blue Apron is struggling — Amazon’s Whole Foods acquisition — continues to be the 400-pound gorilla in the room for this market.

Remember, trading IPO stocks can be a risky bet, but it can also be quite rewarding. After all, you have to take a few chances here and there to keep your portfolio fresh.

On a side note: I took a break in writing today’s article to go for a quick hike, and got to see a black bear mother and her cubs playing from about 500 feet away. Risky? Yes. Rewarding? Most certainly.

Until next time, good trading!

Joseph Hargett
Assistant Managing Editor, Banyan Hill Publishing

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While most investors are focused on the introduction of the iPhone8 and iPhone X from Apple (Nasdaq: AAPL), I am much more interested in other news the company is making. It is involved in the consortium that submitted the winning (for now) $14 billion bid for 60% of the semiconductor manufacturing business of struggling Japanese conglomerate Toshiba (OTC: TOSYY).

This move further highlights to me a major change underway at Apple. The company famously outsources almost its entire supply chain. But that seems set to change, especially with regard to semiconductors.

The reason is straightforward. . .as I discovered in my Singularity project research, semiconductors are the lifeblood of our technological world, including the iPhone.

Apple and Semiconductors

Apple and its rival, Korea’s Samsung Electronics (OTC: SSNLF), remain the top two semiconductor buyers. Together, the two consumed $61.7 billion of semiconductors in 2016. Last year was the sixth consecutive year that the two companies led the way in usage of semiconductors.

But there is a difference between the two.

You see, Samsung is also a major manufacturer of semiconductors. So it consumes its own chips.

But Apple buys memory chips (and OLED screens) from Samsung for its iPhones. The Wall Street Journal reported that Samsung stands to make about $4 billion more in revenue from Apple’s iPhone X components than from components made for its own Galaxy S8 in the 20 months following the iPhone release.

I’m sure that doesn’t make Apple happy. But Samsung is one of the few firms globally that can make enough small chips packed with extra memory capacity (or enough OLED screens).

That is simply due to the exorbitant cost of building a new plant to make semiconductors, which are called foundries or fabs. Even back in 2010, a new foundry set Taiwan Semiconductor (NYSE: TSM) back $9.7 billion. Today, that cost is likely doubled.

That brings us back to Apple’s interest in Toshiba’s chip business. It is heavily involved in the manufacture of NAND memory chips similar to the ones that Apple is currently buying from rival Samsung.

Apple’s Growing Chip Expertise

There is a lot more, however, to the story surrounding Apple and semiconductors.

The company has long been known in technology circles as having prowess in chip design. After all, it did build core processors for both the iPhone and iPad (manufactured by TSM). And it has created fingerprint chips as well as a unique chip for AirPods that allows seamless pairing with other Apple hardware.

Now, Apple is believed to be expanding efforts in developing proprietary semiconductors in artificial intelligence (AI chips). In mid-September, Apple revealed an AI chip that would power facial recognition for iPhone X.

And its plans don’t stop there. Apple may also be interested in building designs for core processors for notebooks, modem chips for iPhones, and a chip that will integrate touch, fingerprint and display driver functions.

This should not come as a surprise to anyone. It has made six semiconductor-related acquisitions since 2008 and is also vacuuming up AI chip-related start-ups. And it poached a top modem chip engineer from Qualcomm (Nasdaq: QCOM) earlier this year as well as engineers from Taiwan’s leading display-driver designer Novatek Microelectronics. And it also took talent from Broadcom (Nasdaq: AVGO) and Texas Instruments (Nasdaq: TXN)among others.

Related: Buy These 3 Hot Semiconductor Stocks for Long-Term Profits

According to research firm IC Insights, Apple ranked as the world’s fourth biggest chip design firm as of the end of 2016. It trailed only Qualcomm, Broadcom and Taiwan’s Mediatek (OTC: MDTKF) and was one spot ahead of semiconductor stock market darling Nvidia (Nasdaq: NVDA).

Investment Implications

The emphatic move by Apple into semiconductors is not good news for many of its suppliers. One example is Germany’s Dialog Semiconductor (OTC: DLGNF), which had Apple poach many of its engineers and will design its own power management chip that Dialog was supplying to it.

Or the U.K.’s Imagination Technologies (OTC: IGNMF), after Apple said it would no longer use its intellectual property surrounding graphics processors. Imagination had to sell itself to a Chinese company in order to survive. Apple also took its chief operation officer before it announced it was building its own graphics processor.

The damage will not be restricted to less well-known overseas Apple suppliers. The damage will eventually spread to those suppliers that trade here in the U.S. too.

I believe at the top of Apple’s ‘hit list’ are Qualcomm and Intel (Nasdaq: INTC). Both provide baseband modem chips responsible for mobile communications to Apple. The ongoing legal battle between Apple and Qualcomm over the latter’s licensing fee model for the modem chip tells you all you need to know there. Qualcomm got 40% of its revenue last year from Apple and Samsung.

Intel, in addition, may be on the way out not only with regard to modem chips but also with chips for the iPad. Notebooks are becoming thinner and consumers are demanding longer battery lives. This tilts the playing field away from Intel chips and toward the architecture from ARM Holdings, which is now owned by Japan’s Softbank (OTC: SFTBY).

Other companies possibly in Apple’s firing line in the future are Analog Devices (Nasdaq: ADI) and Synaptics (Nasdaq: SYNA), which are Apple’s key suppliers for touch sensors and display-driver integrated circuits currently.

And don’t forget about Apple’s radio frequency chip supplier, Skyworks Solutions (Nasdaq: SWKS), or its audio and voice chip provider, Cirrus Logic (Nasdaq: CRUS). They may also be at risk.

Are there any possible winners here from Apple’s aggressive push into semiconductors?

Yes, I believe the foundry service providers that actually make the chips for Apple are safe for now since it has no plans at present to actually move into manufacturing.

That points to the company that currently dominates Apple’s chip production – the world’s largest contract semiconductor manufacturer, with 56% of the market – Taiwan Semiconductor. Apple became the company’s biggest client in 2015 and it accounted for 17% of its revenues at just under $30 billion for 2016. This year, Apple should make up about 20% of TSM’s revenues. And Apple has already engaged TSM to begin work on its core processor iPhone chips for 2018.

Taiwan Semiconductor’s stock is up 33% year-to-date and 25% over the past year, and it has a dividend yield of 3%.

There is no doubt about Apple’s new and almost ruthless aggressiveness regarding its supply chain. One of the very few beneficiaries will be Taiwan Semiconductor.

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