Another Revolutionary Stock for Your Portfolio

"Your product or service is ready to ship when it promises a commanding new value proposition that pushes the state of the market to the next curve. Your revolution has to be at least 1,000 percent -- ten times -- or an 'order of magnitude' improvement."
-- Guy Kawasaki, former chief evangelist of Apple

Truly revolutionary companies don't just come up with new ideas or products; they drastically change and shape the way business is done within their competitive landscape. Apple changed the way we purchased music and thought about operating systems, and then it surged ahead with the advent of the iPod and iPhone. Wal-Mart did so by using tremendous supply chain management and massive purchasing power in order to offer customers heavily discounted items. Both of these companies have been revolutionaries in their fields, and both have rewarded shareholders immensely.

The ability to find the next revolutionary company can wipe out any losses you might have incurred with other stocks. It can change your thinking, and best of all, it can transform your portfolio into a money-making machine in one fell swoop.

Today, I will tell you all about that one life-changing company and then provide you with a brand-new free report that identifies The Motley Fool’s top stock pick for 2011!

The last revolutionary stock
On May 7, 2010, I wrote an article revealing what I thought was the next revolutionary stock: IMAX (Nasdaq: IMAX  ) . Since that time, IMAX shares have popped by 85%, while the S&P 500 index has gone up by 20%. IMAX had several of the traits that I like to see in a game-changing company, among them:

  • It had a technological advantage over its peers and had a first mover advantage.
  • It had increased revenues over the past year.
  • IMAX changed the way consumers viewed its industry.

In the time since I wrote that article, IMAX has continued its dominance in the 3-D realm. With only limited competition from RealD (NYSE: RLD  ) , IMAX is able to control the way studios and theaters operate and has a business model that proves it. IMAX has high fixed costs upfront, but then it reaps variable rewards as box office hits pour in and IMAX's network of theaters grows. Speaking of growing, IMAX recently inked a 75-theater deal in China, has expanded into Russia, and has continued to grow its backlog in the United States.

Another stock to add to the list
Today I want to introduce you to NXP Semiconductors (Nasdaq: NXPI  ) , a company that was part of electronics mammoth Philips for more than 50 years but just had an IPO in mid-2010. Similar to IMAX, NXP has several of the key ingredients to being a revolutionary stock:

  • It has a clear technological advantage with near-field communication, which it helped to invent, and now markets its NFC chipsets to a vast majority of big-name companies.
  • It has increased revenues over the past year by more than 25%.
  • NFC could easily change the way people use mobile devices in all aspects of their lives.

NFC is a short-range communication technology that can be used in smartphones to streamline mobile ticketing for public transportation, electronic ticketing, identity documents, mobile commerce, electronic keys, and much, much more. Imagine you're shopping at a store and find something you like -- you wave your phone at the item and immediately see comparative shopping stats, pricing info, and product details. Imagine you never have to hold a car key again and instead just swing your phone near the door and it magically opens. These are the types of life-changing ways in which NXP's chips could be utilized in the future.

To be up-front, NXP is a total turnaround story. The company hasn't been profitable since 2004 and has a heavy debt load, albeit one that it can probably handle. The beauty of this situation is that after being taken over by private equity firm KKR in 2006, costs have been slashed and a new management team has been put in place. The company is now in a much better position to take advantage of the smartphone boom and to battle competitors like STMicroelectronics (NYSE: STM  ) and Inside Secure (in which Qualcomm (Nasdaq: QCOM  ) has made an investment).

NXP has already proved itself a major player despite only recently going public, illustrating that its years of expertise gained at Philips is well-recognized. It is the exclusive provider of NFC chips for the world's largest handset maker, Nokia (NYSE: NOK  ) , has made deals with Sony, and has a great chance of being an integral part of all future smartphones since Google's (Nasdaq: GOOG  ) Android operating system supports NFC as well.

Get in before everyone else does
NFC is clearly a technology that will move the market to the next curve. Fortunately, consumers are ready, the foundation has been built, and companies all around the world are pushing for its immediate acceptance. The best thing you can do is to get in before everyone else does -- because this stock is one that won't hang around for too long.

As promised, click here and you'll receive the brand-new, totally free report "The Motley Fool’s Top Stock for 2011”. I promise you, you won’t be disappointed!!

Jordan DiPietro owns shares of IMAX. Google and Wal-Mart are Motley Fool Inside Value choices. Google, IMAX, and NXP Semiconductors are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor pick. Wal-Mart is a Motley Fool Global Gains recommendation and a Motley Fool Income Investor choice. Motley Fool Options has recommended a bull call spread position on Apple and a diagonal call position on Wal-Mart. The Fool owns shares of Apple, Google, Qualcomm, and Wal-Mart. 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.

Read/Post Comments (6) | Recommend This Article (72)

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 April 25, 2011, at 8:15 PM, fennecfoxen wrote:

    There was once speculation that the next iPhone would have NFC and it would be totally cool, and NFC stands an okay chance of taking off if it does get in the iPhone. but last I heard, nothing of the sort was actually happening. Maybe later? If you buy this stock, you will certainly have a fair bit riding on the whims of Apple.

  • Report this Comment On April 26, 2011, at 7:57 AM, jargonific wrote:

    What would you say a fair buy in point might be? Thanks.

  • Report this Comment On April 26, 2011, at 12:38 PM, djhike wrote:

    Thanks for the heads up on NXPI. But I wonder about your subhead "Get in before everyone else does." Back in December 2010, the stock was around $13. You share your buy rating in April when the stock had already hit $32. Your article would have been more timely had it appeared at any point between December and now, even when the stock was at $26, twice the level of December.

  • Report this Comment On April 26, 2011, at 1:05 PM, ddepperman wrote:

    Yes it's late but, it's best not to jump in first, you can lose on those. So we wish for a better entry price, but there's still a chance for a 2 bagger.

  • Report this Comment On April 26, 2011, at 1:12 PM, ddepperman wrote:

    Even more interesting is their debt.

  • Report this Comment On April 26, 2011, at 4:22 PM, lgcphixion wrote:

    If you are interested in investing in the potential of NFC, I would recommend Dolby instead of a chipset maker. Dolby owns Via Licensing, Inc. who in turn owns the NFC patent. So every single NFC phone makes a contribution to the patent. You won't have to worry about whether or not your chipset company gets a good contract or not (plus Nokia isn't looking so hot anyway, I'm not sure that's the company I'd want my biggest contract with).

    Furthermore, Dolby has good financials and is diversified from just the NFC technology. In fact, if NFC never takes off, Dolby's core business shouldn't see any repurcussions. The same cannot be as easily said about NXPI, which has red net income and questionable debt, among other problems.

    I fully believe NFC is a good investment as detailed in the article, but as I said, I think there are better means of investing in it. As a disclaimer I am invested in Dolby, but these statements are my own personal justifications as much as anything.

    Part of my work involves creating NFC-based applications leading to my knowledge of the technology. Its advantages are many. It is secure (both encryption and small contact range), is easy to use (both for end-users and developers), the tags do not require power (huge implications), and the tags are relatively small/light and likely only to get smaller. While Bluetooth on a basic conceptual level is similar and didn't explode as might have been expected, if you look at the details NFC has much more potential. One closing comment, Android phones support NFC and Android phones just took over the majority market share of smartphones. Of course iPhone support would be huge, but by the same token not supporting NFC could be a poor oversight on their part.

    I could see the argument made in favor of NXPI, however, on the basis of potential gains by %. Probably more likely it would double up than Dolby in an NFC boom.

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: 1480775, ~/Articles/ArticleHandler.aspx, 10/26/2016 12:34:57 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 3 hours ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

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 4:00 PM
NXPI $100.64 Down -1.20 -1.18%
NXP Semiconductors… CAPS Rating: ****
GOOGL $828.55 Down -7.19 -0.86%
Alphabet (A shares… CAPS Rating: *****
NOK $4.97 Down +0.00 +0.00%
Nokia CAPS Rating: **
QCOM $67.71 Down -0.35 -0.51%
Qualcomm CAPS Rating: ****
RLD.DL $0.00 Down +0.00 +0.00%
RealD CAPS Rating: *
STM $7.93 Down -0.19 -2.34%
STMicroelectronics CAPS Rating: ****