NXP Semiconductors NV (Nasdaq: NXPI) stock has been on the radar of Money Morningreaders for quite some time. Executive Editor Bill Patalon first wrote about the stock in May 2012, and Money Morning's Defense and Tech Specialist Michael Robinson alerted his readers to the stock's potential in June 2013.
Since May 2012, NXPI stock has gained an impressive 148%. That compares to a gain of 30% for the Dow Jones Industrial Average and 44% for the S&P 500.
And while the stock has already brought Money Morning readers triple-digit gains, it still has excellent profit potential.
NXP Semiconductors designs and manufactures High Performance Mixed Signal semiconductor solutions, which are used in a wide range of industries including: automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer, and computing applications.
And while NXP's products are widely used, the main reason Money Morning experts have been high on NXPI stock is one industry in particular.
In fact, it's one of the most exciting sectors on the market today – wearable technology.
NXPI Will Cash In on Wearable Tech
In February, the research firm Canalys claimed wearable tech will become a "key consumer technology" by the end of 2014. At the same time, the firm also predicted that the smart wristband segment alone will grow from 8 million in 2014 to 23 million in 2015. That number is expected to reach 45 million in 2017.
Another study from Juniper Researchin late 2013 reported that retail revenue from the wearable technology market will grow from $1.4 billion in 2013 to $19 billion in 2018.
That type of growth is exactly why Michael Robinson has been watching this sector so closely.
"The tech forecasters at IDCsay the wearables market will grow at a compounded annual rate of 78% for the next several years," Robinson said. "That means it will double roughly every 11 months."
One look at the company's investor presentation and you can see that NXP is targeting this growing market.
"Right on page two the company lays out four major growth areas it's targeting: the Connected Car, Cybersecurity, Portable & Wearable Devices, and the Internet of Things," Robinson said.
But just because a company is "targeting" an industry doesn't alone make the stock a buy – it also has to have strong financials. Fortunately for NXP shareholders, NXPI stock's huge gains haven't been just a product of hype…