Cart (0)
business newsFour Ways to Play the Bull Market in PCs
By
Michael Comeau
Apr 15, 2010 10:10 am
Apple, Dolby, NVIDIA, and Tessera are ready to ride the boom.
PRINT
 |
|
Common sense tells us that if the guts are in demand, so is the rest of the body.
So how can you play the bull market in PCs?
Here are four ideas:
1. Apple (AAPL) -- Let's not think too hard here. Apple is gaining market share even though it's ignoring the industry's race toward dirt-cheap notebooks and netbooks. While Apple has less than 10% of the broader PC market, it has more than 90% of the $1,000+ market -- a sweet spot of the market. On top of its strength in PCs, Apple's iPhone business has room to more than double in size within a few years.
And of course, the iPad, Apple's answer to the already-commoditized netbook market, appears to be taking off like a rocket.
2. Dolby Laboratories (DLB) -- You may not know it, but when you bought a PC, you indirectly sent a buck over to Dolby. Microsoft (MSFT) includes Dolby's audio technologies in four of the six versions of Windows 7, including the Professional and Enterprise versions. Corporations are finally getting around to upgrading their employees' PCs, and Dolby is going to benefit. Remember, Dolby is a unit play -- it actually benefits from collapsing prices for consumer-electronics products.
And reminiscent of Microsoft in its glory days, Dolby has mastered the art of lowballing on guidance, leading it to beat analysts' earnings expectations for 18 straight quarters.
3. NVIDIA (NVDA) -- I've been waiting at least a decade for Intel's integrated graphics solutions to finally put NVIDIA's graphics chips six feet under, and if it hasn't happened by now, it probably never will. Software applications are becoming more and more demanding in terms of visuals, and that ensures a healthy market for powerful graphics processors.
And if the non-Apple portion of the tablet PC market ever takes off, NVIDIA is well-positioned to benefit with its powerful Tegra 2 mobile chipset, which is gaining steam with both tablet and smartphone producers.
Finally, here's a wild card for all you adrenaline junkies:
4. Tessera Technologies (TSRA) -- Like Dolby, Tessera is a play on unit growth. Tessera licenses its chip-miniaturization technologies to memory producers like Samsung, Hynix, and Micron. Demand for memory is outstripping supply, and the resultant strong pricing trends wiill filter down to Tessera as chipmakers expand production capacity.
But unlike Dolby, Tessera isn't a model of stability, as it's frequently hauling into court to either defend or enforce the patents upon which its entire business rests. Tessera is well-positioned to benefit from the PC industry boom -- just don't forget your barf bag.
Buzz & Banter: Trading ideas & insights from 30 professional traders. 14 day FREE trial.
Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
