“Chipageddon” strikes again
18th March 2021 |
I’m a big advocate of getting to know a company by using its products. My view is that you can get a good idea if something is good by simply owning it or using it wherever possible.
It’s why making the recommendations for Mitchells & Butlers (which we made a nice quick profit on), Marston’s and City Pub Group was so easy. They’re all companies where I’ve had a chance to use their products or services.
It’s also why I originally recommended MelodyVR, which has become Napster Plc – I used its virtual reality app, watched some live music, and it was great. A real game changer for the music industry.
It’s also why I recommended Aston Martin Lagonda… Actually no, not true.
I would like very much to have first-hand experience in the ownership of some of Aston’s new products. But that’s not the case just yet. Perhaps soon enough.
Nonetheless, as I explained in your latest recommendation from last week, Kanabo Group, you can buy its products right now. You can get a hold of its CBD vape, the VapePod, and its CBD formulas and try it out for yourself.
You may be open to the idea of CBD wellness, or maybe not – it’s completely up to you. But for me, I’m all for it. That’s why I’m currently waiting for my VapePod and its “Relax” and “Dream” formulas to arrive on my doorstep.
I went to Cannacares and bought one for myself. I’m going to give it a try and see how it goes. It will either reaffirm my decision to recommend Kanabo to you, or the thing will blow up in my face and then… well, you can figure it out from there.
I’m being a little facetious there – there’s no way I expect it to be a bad experience. In fact, I’m hoping it will help me get a better night’s sleep and maybe help deliver an extra bit of sharpness and focus through the day.
My son is very much into full-blown-toddler mode which means far-too-early mornings and a lot of stubbornness. So a little relaxation and clarity is always welcome!
I’ll keep you posted with my experience, and perhaps if you’ve procured a VapePod or perhaps you’ve already got one, you’d like to share your experiences with me also.
Now speaking of things that help to reaffirm or detract from a view on a recommendation, I noted something this week of great interest around my “Chipageddon” investment idea.
As noted in your February recommendation, IQE, there is a global chip shortage. Original equipment manufacturers (OEMs), manufacturers and global device makers simply cannot get enough semiconductors to meet the growing demand for high-tech products.
Major car markers around the globe are pairing back production, even halting production lines because they can’t make their cars without the right mix of semiconductors.
This week General Motors said it would even be building a bunch of its pickup trucks without a fuel management module because of the shortage. That means those specific vehicles would suffer from lower fuel economy.
Even Samsung is expecting to feel the crunch due to “Chipageddon” in the next quarter. Samsung is expecting it’ll have to completely skip the release and introduction of the new Samsung Galaxy Note this year because of the shortages.
The Note is one of Samsung’s best-selling models – I can vouch for that as I’ve got a Galaxy Note 10, a fantastic phone. I would have considered an upgrade to the new version. But, thanks to “Chipageddon”, that doesn’t look like it will be happening now.
In short, this all reaffirms why I think a company like IQE has such great potential to be a solution to the world’s global semiconductor problems. It’s also why with the stock is trading below our buy limit. It remains an active buy.
Stock Focus
Spirent Communications plc
As we move deeper into 2021, the rollout of 5G networks will continue to accelerate around the world. Fortunately, Spirent Communications is right in the thick of this huge technology rollout.
On 5 March, Spirent announced the acquisition of octoScope for $55 million.
octoScope is a US-based company that provides wireless test solutions to the wireless industry. These solutions are centered around 5G and the newest Wi-Fi 6E technologies.
CEO Eric Updyke stated,
“This acquisition supports our strategy of sustainable, profitable growth by establishing Spirent as the firm market leader in the expanding Wi-Fi space, adding to our 5G solution portfolio.”
Complementing this news was the release of the company’s full-year results for the year ended 31 December 2020.
Considering the 2020 difficulties across the world, revenue was up 4% on the previous year. Operating profit and earnings per share were both up 8%.
A great outcome in a weird and wild world.
Considering the impact of the pandemic, the company has done exceptionally well. To give a further idea of how well, it has not made any staff reductions, nor has it used the furlough scheme or utilised any government funding whatsoever.
Our buy rating of Spirent Communications remains firmly in place while it trades below our buy limit.
Marston’s
News through this week that Marston’s CEO Ralph Findlay would be stepping down.
The final date of his tenure will be 30 September 2021.
Sometimes a CEO exit is a shock, and can be of concern to investors. Not here though. Findlay has been CEO for 20 years now. That’s an immense stint, far longer than most CEOs survive in the top job.
Marston’s, like many others, has had perhaps the most difficult year in its existence. Not only has Findlay helped the company to weather the storm, but actually helped it grow with deals like Carlsberg JV and also fended off US venture capital funds that were trying to underpay for the company.
In short, it will be a loss, but with a well-managed process to find his replacement, I think he leaves Marston’s in great health and with still more upside for the stock in the tank for investors.
The Frontier Tech Investor “Top Three”
Sometimes it’s hard to decide on which stocks to invest in from our buy list
Below is our Frontier Tech Investor “Top Three” section showing three stocks in open BUY positions that if you’re trying to figure out what to invest in next, are the three we think are a great place to start.
This doesn’t mean our other stocks are no good, it’s just a guide to help you out in your decision-making process for the next stock we think is worth your consideration.
Napster Group – Napster is a part of the global music streaming industry. A huge opportunity for the company exists in virtual reality music and entertainment streaming. This includes live concerts. I call it the Spotify of VR. The potential is huge. The Napster brand is a good old throwback to yesteryear, looking to build on that long legacy and grow its offering. I think there’s great potential in this still relatively unknown company, now with a globally recognised brand name.
IQE – our most recent recommendation, IQE, is a key part of the supply chain getting semiconductors into the world. With a gigantic increase in the demand for semiconductors the world is facing a “chipageddon”. It’s a situation where there simply aren’t enough semiconductors to supply the world’s biggest, most demanding companies. IQE is one of the few ways to pure-play the world’s semiconductor industry in the UK market.
Velocys – there’s no doubt that governments are going to continue to push their “green agenda”. This means doing what they can to support industry that will help enable carbon neutral economies. Velocys is a big part of this developing sustainable fuels for transport and logistics (in particular aviation) with pioneering technology. If you’re looking for a great “green energy” play, Velocys is a great place to start.
Regards,
Sam Volkering
Editor, Frontier Tech Investor
