Who Benefits Most From The Wearable Tech Boom?

Looking to invest in wearable tech? Check out these component makers.

Jan 16, 2014 at 1:00PM

Get a glimpse of what's on the tech horizon with Foolish reports from the field at the 2014 International Consumer Electronics Show. Companies ranging from start-ups to Fortune 100 launch and showcase thousands of products at the event, which attracts visitors from around the world.

Exercise trackers and other wearable fitness devices are booming right now. Of course, investors could simply buy the brands that produce the devices, but it's also worth looking at who provides the tech inside.

Even more exciting than this revolutionary technology are the incredible profits to be made from it, and when it comes to cashing in on big trends, no one is better than David Gardner. Click here now to uncover the one stock he's buying now.

A full transcript follows the video.

Austin Smith: Hey Fools, Austin Smith and Eric Bleeker here on the floor of CES 2014, doing some coverage of wearables technology. Without a doubt, Eric, this is one of the hot tech niches for 2014; a category that's kind of existed in fits and starts, but we've really seen it take off recently.

The way we're looking at it, there's a couple of different ways you can invest in this. You can invest in some of the bigger wearable brands that are backing the technology -- companies like Nike (NYSE:NKE) and Under Armour (NYSE:UA) and Fitbit -- but then there's also the behind-the-scenes, the picks and axes aspect of this, and there are some interesting storylines here.

There are some accelerometer companies. I'm kind of surprised to see a company like Garmin (NASDAQ:GRMN) -- a company that really got written off for dead in many ways -- being a presence in a lot of these wearable tech companies, particularly for the runners and the bikers of the world.

What other sort of pick and axe companies can we expect to see, that may stand to benefit from this surge in wearable interest, over the year?

Eric Bleeker: I think definitely "picks and shovels" is a great way of looking at this, especially with accelerometers and a lot of sensors being used in these different devices. Like you said too, Nike very much out in front, but you invest in Nike ... it's just a small component of their business.

As far as some of the picks and shovels, I would look at NXP Semiconductor (NASDAQ:NXPI). It's a varied company; a lot of people bought into it originally because of a focus on NFC, but they're diversified and they have a lot of components that can go into fitness technology.

Beyond that, InvenSense (NYSE:INVN) is big into accelerometers. A lot of people originally started looking at them because of something like the Nintendo Wii controller. Well, the Nintendo Wii controller -- the components of it, that is -- are now in your pocket and they're tracking you, so there's another catalyst toward the company.

Finally, I would look at STMicroelectronics (NYSE:STM). It's another company with a diversified portfolio that investors could look at to benefit from these trends.

The final area to look at, if you're an investor, is even a company like Apple (NASDAQ:AAPL) itself. It now has a coprocessor in the newest iPhone 5s, in part geared toward technology, so the future battleground might be, are these discrete components in your pocket, or could your smartphone stand to benefit, and other people just track it through those means? We'll have to see.

Smith: OK. Thanks for the thoughts, Eric. Fools, for more coverage of CES 2014, make sure to head over to Fool.com. 

Austin Smith owns shares of Apple. Eric Bleeker, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple, InvenSense, Nike, NXP Semiconductors, and Under Armour. The Motley Fool owns shares of Apple, InvenSense, Nike, and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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