MRAM: The Holy Grail of Memory

The phrase Hidden Gems has a very specific meaning at The Motley Fool. It represents small-capitalization companies with little or no following on Wall Street, with significant inside ownership, and with a stock price that does not reflect their three-to-five-year potential.

Getting the quick Hidden Gems look-over today is NVE Corporation (Nasdaq: NVEC  ) . Its market capitalization is a very small $160 million, and it is really undiscovered -- no analysts at established firms follow it. Insiders own roughly half the shares, and the stock is up 66% over the last 52 weeks.

Investors are excited by the company's "spintronics" nanotechnology used for Magnetoresistive Random Access Memory (MRAM) -- the so-called "holy grail" of memory because it has the potential to combine the speed of SRAM, the density of DRAM, and the nonvolatility of FLASH. It is also called "universal RAM."

Two promises of MRAM are instant-start computers (no "booting up") and greater battery life in cell phones and portable computers. That promise has not gone unnoticed. Heavyweights IBM (NYSE: IBM  ) and Infineon (NYSE: IFX  ) joined forces so they could enter the market early with product introductions in 2005.

NVE licenses its technology to three companies. Freescale Semiconductor (NYSE: FSL  ) , the spun-off semiconductor operations of Motorola (NYSE: MOT  ) , plans to begin MRAM pilot production this year. Cypress Semiconductor (NYSE: CY  ) , which will manufacturer MRAM for itself and NVE, is expected to offer samples by the end of 2004. Agilent Technologies (NYSE: A  ) licenses NVE's spintronic coupler technology.

NVE has, over the last year, produced free cash flow from a combination of sensors and couplers sales and milestone payments from its MRAM licensees. That free cash flow will not continue, unless there are new licensees, because the company is ramping up its spending for its own line of MRAM products.

Hidden Gems have defined markets and are cash flow positive (or are poised to become so). As exciting as the NVE story is, its future is unfolding, uncertain, and with many deep-pocket competitors. It will take time for the potential to become clear.

NVE stock rocketed up more than $9 a share yesterday morning on news it was awarded a "key patent." Large gains are part of the allure of small-cap investing. But also note that 1.8 million of the company's 4.5 million outstanding shares are sold short. That means there are many skeptics willing to wager that NVE does not become a Hidden Gem.

Those interested in Hidden Gems and nanotechnology should take advantage of the free trial offer and look at the May issue. The recommended stock is a nanotechnology company in the medical field.

Related Fool commentary:

Fool contributorW.D. Crottyowns stock in NVE Corporation but none of the other companies mentioned.

Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 23, 2009, at 10:01 PM, thomasadair wrote:

    The Holy Grail to Investing.

    Developed multiple arbitrages for the financial markets. Arbitrages that produce just a few percent a year, to arbitrages that produce over 30 percent a year.

    In 2001 i started developing, as of now, a dozen arbitrages. I lock in an X percentage, and Y time later, i close out the arbitrage. Over 30%/yr.

    Risk-Free Investing is not only possible, but in abundance. Just that people are told and taught that it is impossible. No risk has been in front of all, but not seen.

    The market is unlimited.


Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 501061, ~/Articles/ArticleHandler.aspx, 10/25/2016 10:19:38 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,231.45 8.42 0.05%
S&P 500 2,151.17 -0.16 -0.01%
NASD 5,306.57 -3.25 -0.06%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 10:03 AM
A $44.30 Down -1.55 -3.38%
Agilent Technologi… CAPS Rating: ***
CY $10.89 Down +0.00 +0.00%
Cypress Semiconduc… CAPS Rating: ***
IBM $150.72 Up +0.15 +0.10%
IBM CAPS Rating: ****
IFX.DL $0.00 Down +0.00 +0.00%
Infineon Technolog… CAPS Rating: **
MSI $73.85 Down -0.64 -0.86%
Motorola Solutions CAPS Rating: ***
NVEC $57.16 Up +0.51 +0.00%
NVE CAPS Rating: ***