In the Aug. 2 Strategic Tech Investor, we introduced you to a new hot tech stock to buy: a Silicon Valley semiconductor company that is leading the charge into ultra-high-definition (UHD) video.
And we predicted the stock - which Wall Street had yet to discover - would double in less than three years.
It only took five months.
If you didn't pull the trigger on this under-the-radar stock, don't fret: The Wall Street pros are now interested and are saying this stock could double or triple from here.
And we agree.
This microchip player's existing businesses are zooming along at 40% and 50% annual rates. And the firm just announced a pact with Internet-search giant heavyweight Google Inc. (Nasdaq: GOOG), which we'll find out more about at the massive Consumer Electronics Show (CES) opening in Las Vegas Tuesday.
There's an old adage that says you never get a second chance to make a first impression.
And there's an investing parallel: You never get a second chance to get in on a "ground-floor" profit play.
With our UHD-video semiconductor company, you're looking at an all-too-infrequent exception to that rule. We're talking here about a company that's about to become a high-tech star - one of those rare "ground-floor" profit opportunities that can become an honest-to-goodness difference-maker in your life.
And you heard about it here first.
Google "Launched" This Stock
As trade events go, it's hard to beat the impact the Consumer Electronics Show has on the U.S. high-tech sector.
This is where you're guaranteed to see a steady stream of the world's most innovative products - everything from next-generation TVs to self-driving cars to 3D printing.
Indeed, a tech firm that finds itself with a hit product at CES is a lot like an actor or actress getting their "breakout" role in Hollywood.
And the company we recommended to you back in August as one of the best stocks to buy will be unveiling a new "wearable" video camera that it co-developed with Google.
We're talking about the Santa Clara, Calif.-based Ambarella Inc. (Nasdaq: AMBA), whose video-chip technology is finding its way into security cameras, automotive cameras, and the "wearable" video cams the "extreme sports" crowd uses to record their often-breathtaking exploits.
But the deal with Google could shoot Ambarella into an even-higher orbit.
The two companies revealed last month that they've jointly developed a wearable camera - the same product line that's been such a big hit with extreme sports participants - for use in the new "Helpouts" service app that Google unveiled in November.
Helpouts has been described as a live "how-to" service that will let teachers, counselors, doctors, home repair specialists, personal trainers, and others offer their paid or free expertise via real-time online video.
According to Ambarella, wearable-camera technology will let Helpouts instructors view live video from the trainee's perspective. And that will support truly interactive instruction in such topic areas as sports, fitness, art, cooking, engineering, or any other hands-on activity.
Ambarella says the Helpouts platform relies on its A7LW camera "system on a chip" (SoC). Among other things, the A7 stabilizes video even when users are in motion.
In addition, the camera can record full HD video while simultaneously streaming live video wirelessly.
For a small company like Ambarella - its market cap is a tiny $960 million - hooking up with a heavyweight like Google is incredibly bullish.
And there's a possible "wild card" that could cause Ambarella's shares to "go vertical" - at least in the near term.
Helpouts is clearly designed for use in Google Glass - the $1,500-a-pair wearable computer that Google unveiled to developers and a selected "test" audience earlier this year.
Nobody's saying if Ambarella is somehow connected with Google Glass. But if it turns out to be the case, you can bet that Ambarella's shares will move even higher.
Stocks to Buy 2014: A $19 Billion Opportunity
Finding out that Ambarella is somehow connected with Google Glass certainly wouldn't surprise us: After all, Ambarella clearly knows the wearable-tech market cold.
The firm already nailed it in the world of action-sports recordings, where its high-definition SoCs are the "brains" inside the GoPro Hero 3 wearable HD video camera.
Because the GoPro mounts to sports helmets, skiers love the device. If you ski, check it out next time you hit the slopes - you'll see bunches of skiers or snowboarders capturing "action" footage.
For its part, Ambarella certainly chose a great growth market to dominate. Berg Insight says sales of wearable devices will zoom by more than 50% a year to 64 million units by 2017.
Juniper Research forecasts industry sales of $19 billion by 2018. That's a nearly 15-fold increase from last year, when Berg says sales hit $1.4 billion.
Actually, this is the second year in a row in which Ambarella's stock will be getting a boost from CES.
At last year's event, the firm unveiled the A9 SoC. That device features several modules that provide HD still and video images and superior sound quality.
And as we mentioned above, wearable tech isn't the only growth market that Ambarella has taken a stake in.
Let's look at each one in greater detail.
Cashing in on Surveillance (I.C.U.)
With its advanced video systems on a chip, Ambarella also is shaking up the market for video security and surveillance.
You see, the industry is rapidly moving away from analog cameras operated on a closed-TV circuit in favor of new digital versions that make it possible to link into a computer network. This is known as Internet Protocol (IP) video security.
In October, Ambarella announced a new relationship with Dropcam, a cutting-edge service that provides cloud-based Wi-Fi video monitoring.
Ambarella will supply its HD SoC camera for the newly released Dropcam Pro. The new device offers improved low-light recording, higher sound quality, and easy wireless connection to a home network.
The move helps cement Ambarella's reputation as a technical expert in this sector. Dropcam receives rave reviews all over the Internet - one of its cameras gets four stars on Amazon.com, based on 1,342 customer reviews.
More to the point, video surveillance is a great growth opportunity for Ambarella.
The research firm MarketsandMarkets forecasts that overall video surveillance sales will climb from an estimated $15 billion in 2013 to $25 billion by the end of 2016. That's an increase of 60% in just three years.
Ambarella hasn't specified how video security contributes to sales.
But it is one of two key factors - along with wearable cameras - that helped the company's revenue grow 31% to reach $117.6 million for the first nine months of this year.
Ambarella isn't resting on its laurels, either.
The company is also going after a brand-new TV market.
When we talked about Ambarella back on Aug. 2, we told you the company's technology would give it a head start in the next-generation TV technology that's known as ultra-high-definition TV, or UHDTV for short.
Images on UHDTV sets are incredibly detailed because they have resolution of 4,000 horizontal pixels, which is why this technology also is called "4K."
It all boils down to a picture that is roughly four times sharper than today's best HD TV monitors.
UHDTV is still in its infancy, but is going to grow rapidly. The Consumer Electronics Association predicts that fewer than 25,000 UHDTV sets were sold in the U.S. market last year.
But the trade group predicts that figure will soar more than 60-fold by the end of 2016 to 1.43 million sets, or roughly 5% of TVs sold nationally.
The sector is expected to double again by 2018, giving UHDTV a 10% market share - which works out to a $3 billion opportunity.
Ambarella is uniquely positioned to cash in on 4K tech. It's already introduced its sophisticated A9 chip in the consumer-digital-video market for 4K cameras.
That should give it the inside lane when the professional 4K video market gets going in the next few years.
Ambarella (Nasdaq: AMBA): A Double... Again
Founded in 2004, the award-winning Ambarella went public in October 2012 at $6 a share. Today, the stock trades at about $34, for a post-IPO gain of nearly 460%.
But don't worry; we still see plenty of upside...
If you passed on Ambarella when we first talked about back in August, remember it's still not too late to jump aboard.
This is an incredibly well-run firm with excellent financials. The company is earning 17% on operations and boasts a return on stockholders' equity (ROE) of nearly 22%.
Over the past three years, Ambarella has grown earnings per share (EPS) by about 32%. That means both EPS and the stock could roughly double again in another three years.
Of course, the last time we predicted a three-year double, our estimate proved to be far too conservative.
And another surprise from Google could give Ambarella another near-term boost.
Stocks to Buy: We Were Serious About Sirius
Ambarella isn't the only recent recommendation that generated a pretty nice return in a very short period.
In the Dec. 17 Strategic Tech Investor report "The Tech-Sector 'Anomaly' That Could Double Your Money By Spring," we told you that satellite-radio player Sirius XM Holdings Inc.(Nasdaq: SIRI) was seriously undervalued.
We were right - and we weren't alone in that assessment. Cable-operator Liberty Media Inc. (Nasdaq: LMCA), which already owned 52% of Sirius, on Monday said it would buy the portion of the company it didn't already own.
Sirius is now up 12% from where we recommended the stock, in only 12 trading sessions - the equivalent of a 255% gain on an annualized basis. And there might be more still: Both The Wall Street Journal and Barron's said the price action in Sirius' shares demonstrate that investors feel the company is worth more, meaning Liberty might have to offer more.
No matter what happens from here, we can report that Sirius represents another solid piece of investment analysis - offered to you on an extremely timely basis.
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