Own This Stock To Future-Proof Your Portfolio

Lou Basenese

Tuesday, February 18, 2020

Can you guess what the next truly disruptive technology will be?

  • Perhaps it will be artificial intelligence, like Venture Beat predicts.
  • Or hyper automation, as tech-trend researcher Gartner expects.
  • Or maybe it will be 5G mobile networks, per ZDNet.

The list of possibilities goes on and on and on — and as an investor, that’s a problem

If you have no idea what the next big thing is, you’ll get left behind financially.

So today, I’ll show you how to “future-proof” your portfolio…

And guarantee that you’ll profit from the coming waves of tech innovation.

Too Much Room for Error

As I shared last week, the pace of tech innovation today has accelerated dramatically.

What used to take decades now takes just years, and sometimes just months.

As an investor, this can be overwhelming.

If you want to maximize your profits (and minimize your losses!) you need to know which trends and stocks to buy, and which to sell. Furthermore, you need to time it right.

And even if you get one trend right, then you need to figure out the next one.

That leaves far too much room for error.

But what if we could own all the most promising tech trends — in a single investment?

Now we can…

Introducing: NXP Semiconductors (NXPI)

NXP Semiconductors (NXPI) is one of the world’s leading chipmakers.

As I’ve shared in recent weeks, the future of big tech profits is in semiconductors. Period.

And we couldn’t ask for a more compelling semiconductor investment than NXP.

You see, NXP represents a de-facto ETF of all the most promising tech trends:

  • Self-driving cars
  • Electric vehicles
  • Connected cars
  • Voice assistants
  • 5G
  • Mobile payments
  • Wireless charging
  • Internet of Things
  • Artificial intelligence
  • Robotics
  • Machine learning
  • Edge computing and security
  • Cloud computing
  • Etc, etc.

NXP has exposure to all of them.

Let me tell you why…

Powering the Future

Simply put, NXP makes the semiconductor chips that power all these trends.

What’s more, it controls over 11,300 patents.

So forget about trying to predict which tech trend will dominate. NXP is perfectly positioned to profit from all of them.

It’s no wonder Qualcomm (QCOM) so desperately wanted to acquire the company in 2018.

But thankfully for us, Chinese regulators called off the $44 billion acquisition…

The Fundamental Investment Case

If Qualcomm had succeeded in acquiring NXP, we’d no longer have the chance to own the company — and in turn, gain exposure to so many trends in a single purchase.

But this investment isn’t simply about getting exposure to compelling technologies. Ultimately, the case for NXP comes down to strong fundamentals.

For example, this company:

  • Boasts double-digit growth prospects — in perpetuity. That’s all the more impressive when you consider that NXP is already a $37 billion company.
  • Trades on the cheap. Following the Qualcomm breakup, shares dropped to the lowest valuation in years, at 10x forward earnings. But despite an 88% rally since then, it’s still cheap, at less than 14x forward earnings. To put that in perspective, the S&P 500 is currently trading at 20x forward earnings.
  • Is well-managed financially, as evidenced by its free cash flow of over $2 billion, a $2 billion stock repurchase plan, and reliable and increasing dividends.
  • Remains a compelling takeover target.

Furthermore, the company’s latest quarterly update indicates that an uptick in almost all its operating segments is in store for this year…

The Time To Buy This Stock is Now

In fact, after beating earnings expectations in Q4, management said that it’s "increasingly confident” in demand trends.

Here’s the bottom line:

Ultimately, a company’s share price follows its sales and earnings growth…

So the time to buy this stock is now.

We couldn’t ask for a better way to future-proof our portfolio.

Ahead of the tape,
Lou Basenese

Ahead of the tape,