With the announcement of Google (NASDAQ: GOOG ) (NASDAQ: GOOGL ) Fit, the revolution of health care monitoring and recording is in full force. This news comes within a month of Apple (NASDAQ: AAPL ) touting the new Health app and HealthFit developer's tool. The goal of both services is to become the central hub of a myriad of apps and wearable sensors that measure health and fitness activities.
With the two tech giants battling it out for consumers' health data and the focus of developers, the one stock that appears best-situated to benefit from the proliferation of sensors in these new devices is InvenSense (NYSE: INVN ) . Remember that Google, at a market valuation of $390 billion, is the smallest of those tech giants, making it very difficult for a health hub to change the value of the related stocks. On the other hand, InvenSense sits with a valuation just below $2 billion, and the advancement of sensors in medical and fitness devices will greatly move the needle for this small company.
Each new device, whether fitness or health-related, will need more complex sensors to measure and track user movements and record the medical implications. The most notable producer of sensors is InvenSense, which ironically got a price target bump from Pacific Crest on the expectation that the company has finally landed a deal to provide sensors for the iPhone (and possibly even the still-rumored iWatch). The sensor maker most notably hasn't obtained Apple as a customer.
The maker of motion-tracking sensors already works with Google and Samsung (NASDAQOTH: SSNLF ) , including Samsung's Gear products, so it is already positioned for the oncoming wearable revolution. If these new health apps can increase demand for sensors produced by InvenSense, the company might become the clear winner in the arms race of the tech giants.
With a market cap of $2 billion, and revenue only expected to reach $325 million this year, the stock isn't cheap. InvenSense is already solidly profitable, so it offers some stability trading at only about 30 times earnings estimates of $0.71. The company obtained roughly 85% of revenue from smartphones and tablets, so the development of another revenue source could greatly increase the potential market size.
While Apple is working with the Mayo Clinic on the health app, Google announced several apps that already integrate with the platform, including Nike+, Adidas, and Mio, which makes a wristband with an integrated heart rate monitor.
For its part, InvenSense recently released a sensor capable of measuring swing motion of both a tennis racket and golf club. The company has even incorporated one into a soccer ball to measure flight and distance. The sensor reportedly offers the smallest size, lowest power, and lowest profile, making it ideal for sports and fitness applications. The company also already has sensors in Google and Samsung products, including in the new wearable devices from Samsung, the Gear 2 and Gear Fit.
The one company that might benefit the most from an arms race between Apple and Google is the maker of motion sensors capable of tracking fitness moves and even a golf swing. InvenSense isn't overly cheap, but at a valuation of only $2 billion, the fitness and health trade has the potential to move the needle for this tech company.
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