Stocks to Buy 2014: Just $1 Unlocks Tech's Hottest New Sector

[Editor's Note: This inside look at three of the hottest "Miracle Materials" sectors today - and one of the best stocks to buy in the rare-earth metals sector - was first published March 11 in Michael A. Robinson's Strategic Tech Investor. To get all of Robinson's research as soon as it's released, click here.]

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It's not often that you get a chance to get in on the "ground floor" of an entire new business.

But that's just what you have here.

In the past, you've heard me say that we are living in the "Golden Age of Materials Science." You see, without Miracle Materials - and the science that backs them - we simply wouldn't have some of the unique high-tech products we take for granted: smartphones, electric cars, and new drug therapies just to name a few.

Today, I want to talk with you about three of the Miracle Materials sectors that I'm targeting ... and to tell you about one of the best super-low-priced stocks to buy - with 300% profit potential.

So let's get down to it...

Miracle Material No. 1: Synthetic DNA

I was having dinner with the chief executive officer of a biotech firm not long ago when the conversation wound around to Miracle Materials. To underscore their importance, Miracle Materials scientists are now participants very early in the product-discovery phase of the global-tech ecosystem. Advanced technologies, you see, now require breakthroughs in a wide range of materials - from polymers to metals to medical molecules.

Nowhere is this need more obvious than with the development of synthetic vaccines.

Since synthetic vaccines stem from fragments of man-made DNA, the idea is to "program" them to fight the flu or other diseases.

I see this approach as a "Disruptive Technology" that will turn the $30 billion vaccine market inside out. Besides the flu, firms in this space are working on synthetic vaccines for leukemia, HIV, malaria, hepatitis, and cancer.

Currently, no firm has a synthetic product on the market for human use. But trust me, those products are coming. Several are in clinical trials right now - just awaiting U.S. Food and Drug Administration (FDA) approval.

This field of materials science is extremely important for a couple of reasons.

First, during the past several years, we've seen new flu strains develop. And developing vaccines to combat them in a timely manner - using longstanding organic strategies - takes too doggone long.

And, second, if there's a big outbreak, or a flu virus mutates, the use of 60-year-old organic strategies will keep us from developing needed vaccines in a timely enough manner, or in big enough quantities. In short, if there's a big outbreak, we'd never be able to react in time.

But once synthetic vaccine technology receives FDA approval, scientists will be able to engineer and scale up for full production in a matter of a few weeks.

And that, I can tell you, is the true definition of a "miracle" material.

Miracle Material No. 2: Engineered Carbon

This substance ranks as the thinnest material ever created. If you stacked 3 million sheets of this stuff on top of one another, the entire array would be a single millimeter in height.

Even so, this two-dimensional structure made from carbon atoms is incredibly strong: It would take an elephant balanced on a pencil to break through a sheet as thin as Saran Wrap.

And while scientists refer to this as "engineered carbon," the mainstream news media and retail investors know this super-strong substance by a different name.

They call it "graphene."

The intense interest is understandable: This form of engineered carbon boasts seemingly endless uses - from sensors to semiconductors, batteries, energy-generation, medicine, transportation... it's limited only by our imaginations.

I firmly believe that graphene will revolutionize the economy. But I also believe that its full, commercial benefits won't be realized for several years.

For a second form of engineered carbon - one that seems less sexy, but is just as robust - the time is now. This form is graphite - a close cousin of graphene. It's a critical ingredient for lithium-ion batteries, which require about 10 times as much graphite as lithium to operate. And lithium-ion batteries are the preferred energy source for a wide range of consumer electronics, including smartphones and electric vehicles.

Electric-vehicle production will remain a major driver for this industry because the batteries are so much bigger than those you find inside smartphones or tablets.

Byron Capital Markets estimates sales of electric and hybrid cars will skyrocket tenfold by the end of this decade, rising from 250,000 units in 2012 to roughly 5 million globally by 2020.

And that brings us to our third, and last, version of Miracle Materials - one that I was perhaps the first analyst to recommend to investors.

Miracle Materials No. 3: Rare Earths

Rare-earth materials (REMs) is a field I first began covering back in the 1980s as part of my analysis of Ronald Reagan's Star Wars program. As many investors today know, rare earths are at the heart of many defense applications, including laser-guided weapons, jet-engine parts, and night-vision goggles.

What those same investors don't realize, however, is that there's also a huge need for rare earths in many consumer applications, as well. We're talking everything from smartphones and tablets to digital cameras and fiber optics to MRI machines and LED lighting.

That's why I've chosen rare earths as our "Miracle Materials" profit play.

Stocks to Buy: Tasman Metals' (NYSE: TAS) Miracle in the Making

The company I've identified is Tasman Metals Ltd. (NYSE: TAS), an exploration-stage company whose CEO is someone I know well. I've met CEO Max Saxon, and have held a number of follow-up conversations with him.

Saxon is one of the world's top geologists. A few years back he discovered the Nora Kaar rare earth mine in Sweden, a tract that is considered of vital strategic importance for Europe.

European authorities want to source rare earths on the Continent - rather than importing them from China, which has used export restrictions to hoard its supply. European leaders have all but guaranteed Tasman a built-in customer base when Nora Kaar opens.

The company recently expanded its metals portfolio by acquiring a large tungsten project - also in Sweden. And it offers investors another potential new catalyst.

Two months ago, Tasman said it was negotiating a merger with Flinders Resources (TSX.V: FDR/OTC: FLNXF), which owns a large graphite mine in Sweden that could begin production next year.

I think that merger will go through if for no other reason than Saxon founded both firms. I also believe that a rare-earth/graphite combination makes for a very powerful mining firm.

And the timing looks to be excellent. After three years of struggle that has been tied to fears of a slowing China economy, the rare-earth sector appears to be headed for a rebound.

Tasman's shares have already rallied about 30% over the past three months, but still trade at about $1.30 each.

And that's still well below its three-year closing high of $6 each. If the stock can recover half that amount in the next two years, you'd be looking at a potential upside of nearly 150%.

Let's be clear about a couple of things here.

First, Tasman is the embodiment of a high-risk stock. Given the fact that it's both a turnaround and a merger candidate, we'd actually label this as a "Special Situation" profit play. This is only appropriate for the high-risk portion of your portfolio - and then only for investors who are truly able to stomach the volatility we all know is possible, even probable, with a small-cap stock like that.

Making it even more imperative that you be honest about your capacity for risk is the reality that stop-losses rarely work for exploration-stage mining firms. Instead you need to use a time-based risk-management strategy - probably investing and riding out the Tasman's swings for a good two years.

So you should only invest an amount that you feel comfortable tying up for two years - but certainly no more than 1½% to 2% of your total holdings. This is definitely not a "back-up-the-truck" stock.

But I feel strongly that every investor should have at least one stock like this in their portfolio. As we talked about in the past, once you have your solid foundation in place you can look for these kinds of unique investments to help turbocharge your returns.

We'll keep an eye on this for you and bring you the best stocks to buy to profit from the Miracle Materials sectors discussed here - and more.

NOW: A tech market with enormous upside potential is flying under the radar - one company has had 161% gains in the past 12 months, and another underwent a $370 million merger in January. Here's how you can profit from this overlooked tech market...

About the Author

Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.

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