We've got three new stocks to watch today:
- Apple Inc. (Nasdaq: AAPL) has introduced its newest phones, but it's another sector of the company that will push it to $1 trillion.
- ROBO Global Robotics & Automation ETF (Nasdaq: ROBO) demonstrates the profit potential of one of tech's most exciting frontiers.
- Abiomed Inc. (Nasdaq: ABMD) gets singled out as one of Wall Street's fastest-growing companies.
Here's what you need to know...
Stocks to Watch Now No. 1: New iPhones Aren't the Reason to Be Excited About Apple
Apple Inc. (Nasdaq: AAPL) unveiled its new iPhone 8 last week, along with the higher-end iPhone X. The latter is pronounced "iPhone 10," as in, "10 years since the original Apple smartphone debuted," and it will retail at a hefty $1,000.
Apple is expected to sell 85 million phones in the final quarter of 2017. But Money Morning Chief Investment Strategist Keith Fitz-Gerald isn't interested in that number. He's also not impressed by the new phones, saying the new features are nothing more than fodder for analysts and Apple fanatics. How many of them the company sells, Keith says, is "immaterial."
But what Keith is excited about is Apple's services revenue, a number that by itself is comparable to the revenue of an entire Fortune 100 company. "What I want to see," Keith said on FOX Business Network's "Varney & Co." last week, "is another 22% to 25% growth in a $7 billion business segment" that Apple's got.
Keith is referring to Apple's quarterly report released at the beginning of August, in which its services revenue was $7.27 billion, up 22% from a year earlier.
And he's apparently optimistic that Apple can repeat that success. Later in the interview, host Stuart Varney asked Keith how soon AAPL's market cap will hit a trillion dollars. Its current market cap sits around $825 billion, the highest in the world. The stock price would have to rise from around $160 right now to $194 for Apple to become the first trillion-dollar company.
How soon will it happen?
Stuart needed to catch his breath after he heard Keith's answer. Check it out...
Stocks to Watch Now No. 2: ROBO's Returns Will Make You Forget That It's an ETF
In order to weed out excessive volatility, when we generate our list of Money Morning top 10 outperformers, we only include picks that are at least six months old. That's the only reason Money Morning Director of Technology & Venture Capital Research Michael Robinson's late-June pick of ROBO Global Robotics & Automation ETF (Nasdaq: ROBO) hasn't made the list. It's up 11% in less than three months, outperforming the S&P 500 by more than 300%. ROBO is now up 41.7% in the last 12 months, in what has been a virtually uninterrupted climb.
It's unusual to see big movement in ETFs, as their diversification tends to smooth out the peaks and valleys. But ROBO is boosted by being tapped into a slew of emerging technologies: autonomous vehicles, drones, the Internet of Things, and artificial intelligence, among others.
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ROBO's portfolio of more than 80 stocks includes companies that are on the cutting edge of automation technology...
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- Deere & Co. (NYSE: DE) is now a leader in driverless vehicles after spending the past two decades developing autonomous tractors. Some models can even adjust to changing crop conditions.
- Cognex Corp. (Nasdaq: CGNX) develops machine vision products to guide tracking, sorting, and assembly processes for manufacturers. Apple turns to Cognex to automate its quality control process.
- Daifuku Co. Ltd. (OTCMKTS: DAIUF) develops custom automated factory solutions for a variety of industries. One division is dedicated to airports, streamlining the baggage claim process for transportation hubs across four continents.
"I believe this is an ETF that offers patient tech investors some excellent long-term potential," Michael says, "and would make a great foundational play for your portfolio."
ROBO seems to be rewarding not-so-patient tech investors, too.
Stocks to Watch Now No. 3: Abiomed's Tiny Heart Pump Generates Massive Growth
Another of Michael's picks, Abiomed Inc. (Nasdaq: ABMD) has climbed to a 52-week high of $158.87. It's been on a steady rise since early February, which is part of why it just ranked No. 4 on Fortune's list of the 100 fastest-growing companies of 2017.
ABMD jumped up four spots from last year's list, thanks to 88% growth in earnings per share over the last three years, to go with 36% revenue growth and 79% total return in the same time frame.
As we highlighted in our most recent "Best Stocks to Watch" roundup, Abiomed has developed the world's smallest heart pump to help over 50,000 patients so far - surpassing the Massachusetts-based company's goal of treating enough patients to fill Fenway Park. The device allows for safer coronary interventions for heart disease patients who are not candidates for surgery.
Coronary artery disease affects more than 100 million people each year around the globe and is the No. 1 cause of death. According to Cardiovascular Business, heart failure in the United States - already at epidemic levels - is expected to rise 46% by 2030. So Abiomed's device, currently only used in 1% of percutaneous coronary intervention procedures, fills a desperate need in the healthcare industry.
"This is the kind of stock," Michael says, "that really puts you in the fast lane of high tech's road to wealth."
For those following along with our Money Morning Top 10 Outperformers, here's the latest list:
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About the Author
Stephen Mack has been writing about economics and finance since 2011. He contributed material for the best-selling books Aftershock and The Aftershock Investor. He lives in Baltimore, Maryland.