I have a confession to make – I’m a total speed freak.
No, I’m not talking about pushing the 321-horsepower engine in my Acura Hybrid MDX to its limits, though that can be fun at times.
I use it all the time to see how fast my handhelds and other wireless clients are networking. I also use it when I’m on the road, or working from remote locations.
This is fresh on my mind for one simple reason: I’m getting ready to upgrade the wireless network in my home and office from a guaranteed 100 megabits download speeds to either five or 10 times faster – up to a gigabit a second.
Turns out, I am far from alone. Market Research Future says the wireless networking market is growing 13.5% a year, and will be worth $96.6 billion in 2023.
That’s why today, I’m going to show you the play to make to capture value in this cutting-edge sector.
And I’m going to lay out the five reasons it’ll get you there.
Check it out…
A Much Bigger Market
Let me be clear on one thing. I actually believe the true value of the full global wireless market is several times larger than what Market Research Future says.
After all, the entire world is moving rapidly to high-speed wireless network faster communications everywhere, from offices and shopping centers to factories, homes, airports and more.
Doing so means investing in high-bandwidth gear. For example, I need a new modem, WiFi router and at least one relay station, more likely two.
Multiply that example by hundreds of thousands per year and you can see why Ubiquiti Networks Inc. (Nasdaq:UBNT) is such a winning investment.
Simply stated, it’s one of the single best ways to invest in the global growth of what is becoming ubiquitous broadband wireless web access through Wi-Fi and cellular systems.
So let’s run it through my five rules for finding market-crushing tech leaders.
Take a look:
Tech Wealth Generator No. 1: Great Companies Have Great Operations
These are well run firms with top-notch leaders.
I don’t normally pay attention to a CEO’s wealth. After all, out here in Silicon Valley millionaires are pretty common place. But Ubiquiti CEO Robert Pera is in a very elite class – he’s a billionaire.
In 2017, Forbes listed Pera as one of 40 people who were billionaires before age 40. Not a bad accomplishment for the former Apple Inc. (Nasdaq:AAPL) wireless engineer who founded the company in 2005 with $30,000 in Apple stock options and some credit card debt.
How he made the money is what’s most important for us. He brought cost-effective broadband Wi-Fi gear to undeserved markets in the U.S. and abroad.
Pera has since moved into software and critical gear used for high-speed cellular communications, just as lightning-fast 5G networks are set to take hold this year.
Tech Wealth Generator No. 2: Separate the Signal From the Noise
To create real wealth, you have to ignore the hype and find companies that have rock-solid fundamentals.
Just weeks ago, Wall Street and the media were down on stocks across the board. They were particularly dour about high tech, because those stocks had led the markets higher for years.
From the time the markets sold off starting Oct. 3 through its recent rebound, the S&P 500 was off more than 11%. But during that same period, UBNT actually gained 8.3%.
That’s just a part this stock’s market-crushing record. Over the past five years, the S&P has gained a respectable 40.5%. By contrast, Ubiquiti beat the broader market by nearly 225%.
Tech Wealth Generator No. 3: Ride the Unstoppable Trends
Look for stocks in red-hot sectors, because they offer the best chance for life-changing gains.
Turns out, Ubiquiti has this part nailed. See, companies and consumers around the world are busy adopting high-speed broadband communications, both wired and wireless.
And here’s an astounding statistic that proves just what I am saying. To date, the firm has 85 million pieces of networking gear in more than 200 countries. Statista says there are 7.8 billion wireless subscriptions, and that traffic by all untethered devices will growth fourfold over the five-year period ending in 2021.
Tech Wealth Generator No. 4: Focus on Growth
Companies that have the strongest growth rates almost always offer the highest stock returns.
Ubiquiti grew sales in its most recent quarter by 15%. That means it’s moving at a rate more than four times faster than the overall U.S. economy.
Now, that was a slight dip from my projected 18% three-year average. But I’m not concerned, because most companies have swings on a quarterly basis. The long haul here looks great.
For the full fiscal year, sales were up 17.5%, just a modest fall from my long-term forecast.
And it’s important to note that as impressive as its sales growth is, earnings are climbing faster – a key sign of management efficiency for investors.
Tech Wealth Generator No. 5: Target Stocks That Can Double Your Money
This is where we look at the firm’s earnings growth and see how long it will take to double profits. By doing that we can figure out how long on average it should take for the stock to roughly double.
I’ve gone through the firm’s financials in detail, and I’m projecting earnings per share will grow by an average 24% over the next three years. I believe this is a very accurate forecast. See, over the past three years, the firm has maintained that exact average growth in earnings per share.
Now we use what I call my doubling calculator. Mathematicians call it the Rule of 72. Let’s divide the compound profit growth rate of 24% into the number 72. We find that it should double in almost three years, but to be extra conservative, I extended that out to 3 years.
With an $8 billion market cap, the stock trades at roughly $106.50. But it won’t stay there long this year as wireless adoption continues to grow and Ubiquiti keeps on riding that trend for major sales and earnings growth.
This is one of those stocks where it really pays to ignore all the market noise out there these days and focus on solid fundamentals.
That way, you’ll be able to sit back and watch your portfolio’s value rise as this stock rides the unstoppable trend of high-speed wireless communications.
Of course, the full rollout of wireless devices is happening in concert with another key tech development in the energy sector. And this one could change electricity, and how we get it, forever.
Imagine never having to be tied down to a charger again… or having to stop off at the gas station on a road trip or your way in to work.
I’m talking about power that’s available anywhere and everywhere. The company behind this new form of power could see exponential growth, meaning you still have time to get in, before this firm becomes a household name.
See you back here soon.
— Michael Robinson
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Source: Strategic Tech Investor