Revolutionary or disruptive technologies don't come around every day. But when they do, they can be the multibaggers that make a portfolio outperform the market. At The Motley Fool we're always on the lookout for stocks that may become the next Apple or Microsoft, redefining industries and profiting investors along the way.
Today I'll outline three industries where I think disruptive technologies lie, and at least one stock that may be a multibagger for your portfolio.
LEDs, only organic
We've been hearing about OLED TVs for years, but manufacturers have so far disappointed in what they've offered. Since Sony introduced the first OLED TV in 2007, an 11-inch model that cost more than $2,000, the progress has been slow and painful.
But that's about to change, thanks to improving technology. At this year's Consumer Electronics Show, Samsung and LG introduced 55-inch OLED TVs that will hit the market later in 2012.
So why is OLED TV such a disruptive technology? It's all about the materials and manufacturing process. OLED materials can basically be printed on a surface, effectively reducing manufacturing costs versus existing technologies. Of course, that won't happen until economies of scale are reached, but the path is set. Even more impressive is the fact that the surface doesn't need to be a rigid, solid surface, like glass. Flexible-backing materials will eventually be used for large-surface OLED screens, opening a plethora of possibilities. OLED TVs also require little energy, making them more cost-effective once they've been purchased.
How to profit from this disruptive technology? Universal Display
Hope for advanced batteries
Electric cars are a divisive topic no matter how you feel about the issue. Supporters will say that electric vehicles are the future because they will eventually provide a greener, more economical mode of transportation. Doubters will ask what they're supposed to do when their electric car runs out of juice after a 50-mile drive, not to mention the added cost these vehicles currently come with.
Well, technology may soon be able to provide everyone with a palatable solution: a vehicle that can drive 500 miles between charges. IBM
Who is the winner? Tesla
A lighting revolution
Lightbulbs have gotten a lot of attention recently after Congress required them to be produced to a certain standard of efficiency. But industry is already moving beyond incandescent bulbs and CFLs to LED lighting.
LEDs last longer, use less power, and don't contain the toxic mercury that CFL bulbs are criticized for. The only downside is cost.
But the cost equation is changing quickly as technology improves and manufacturing capacity is brought online. General Electric
But my bet is Cree
Foolish bottom line
OLEDs, advanced batteries for electric vehicles, and LED lighting are technologies I think will be long-term winners, deserving a spot in your portfolio.