As a tech investor, I pay a lot of attention to the key trends reshaping our world and setting us up for massive gains.
I've also found that sometimes you can boil down great investment opportunities into a number. In this case its 11.4…the average age of a car on U.S. roads today.
Compared with the new connected car, that's like driving something out of the Flintstones.
See, the connected car is both web and Bluetooth enabled. It's also loaded with complex sensors, sophisticated software, and advanced semiconductors.
This embedded tech ecosystem is one of the big reasons why the industry sold some 15.6 million vehicles last year, in no small part because drivers want their smartphones and cars to stay connected to each other.
Here's the thing. As much as I believe in the connected car, there are many, diverse tech-related ways to cash in on the millions of new vehicles rolling off the assembly lines this year.
The secret to finding the best auto-tech plays is to understand foremost their positioning in this booming sector.
Some companies have arisen on the back of auto-technology, but lack the fundamentals to last…
Others have names as old as the industry itself, yet their technology outpaces much newer, and ostensibly higher-tech, companies…
And then there are some right in-between.
Today, I'll show you three very diverse companies…
Yet for their different niches, they fit our one criterion: Perfectly positioned in the auto-tech sector to deliver market-crushing results…
Driving the Web for Record Sales
From a high-tech standpoint, AutoNation Inc. (NYSE: AN) ranks as an intriguing hybrid play.
To be sure, it is heavily rooted in the physical world. After all, the company operates some 267 auto dealerships around the United States, making it the industry's largest new-car retailer.
But its savvy use of the Web presents the company to potential new clients as more of an Internet buying service than a standard auto dealer.
For instance, when I recently logged onto the company's website, it knew automatically that I am located in Oakland, Calif. Much like you'd find at an independent broker, AutoNation's website prompts you to search for a vehicle by type, make, and model.
The home page also tells visitors it provides "hassle-free" dealing and offers to appraise their vehicles and give them a guaranteed trade-in value.
In this regard, the first impression you get is that of a company using the web to make car shopping much easier, rather than promoting any existing dealer or nameplate.
Its sophisticated use of the web is one of the reasons why the company continues to register huge sales gains. Both last November and December, the company had the highest sales for each of those months since 2001.
For last year's third period, AutoNation reported its fourth consecutive record earnings per share from continuing operations, a 14% increase from the previous year to $0.75. Total sales also increased 14% in the quarter to $4.5 billion.
With a market cap of $5.9 billion, the stock trades at $48 a share with a forward PE of 14.5. It's priced at only .35 times sales and has a PEG ratio of just .65, well below the "fair price" ratio of 1.
The Sweet Sound of Profits
To say that I've followed the development of one of the nation's leading car audio firms for more than 30 years is no exaggeration.
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.