Cheap Stocks for the Next Big Tech Wave
There’s a huge wave of technology coming fast. It’s the fifth wave of telecom, and it’s called 5G.
The good news for you is that it’s still early in the game, with time to get in on the cheap. Most investors, hedge fund managers, or even institutions have not yet come to grips with this next leg up in the bull market.
5G is all about speed — speed so fast it will change downloads, communication, and connectivity. This next wave will obliterate existing industries in a tsunami of creative destruction we haven't seen since the dot-com era.
It will destroy those that can’t keep up and will create new Googles, Facebooks, and Apples.
This technology will advance new industries, from self-driving vehicles to drone swarms to remote health care devices, as well as things no one has even thought of yet.
Farm equipment will be able to run and be controlled from hundreds of miles away.
ATMs can be monitored in real time. Inventory in stores can be monitored and items replaced as they are sold and by robotic devices.
Lag time will be an amusing anecdote, like pencils rewinding a cassette tape.
Growth in big data storage, big data, and artificial intelligence will be massive. And this boom is three quarters away...
Trump Opens the Door
Late last year, the Trump administration signed a presidential memorandum directing the Commerce Department to develop a long-term strategy to prepare for the introduction of next-generation 5G wireless networks.
AT&T Inc., Verizon Communications Inc., Sprint Corp., and T-Mobile U.S. Inc. are all already working to acquire spectrum and beginning to develop and test 5G networks.
These networks are expected to be at least 100 times faster than current 4G networks and cut latency, or delays, to less than one-thousandth of a second from one-hundredth of a second.
Wireless networks that today support 1,000 connected devices per square kilometer could instead support 1 million.
This is a big deal.
AT&T is spending hundreds of millions on advertising for its “5G E” services and will change its LTE icon to 5G E on its Android phones.
But it’s not just the consumers and their electronic devices that this will benefit. Companies will win big with faster speeds and lower costs.
But that’s not all.
The FCC Chairman stated that 5G has the potential to help create 3 million new jobs, $275 billion in private investment, and $500 billion in new economic growth.
One report by BIS Research claims that infrastructure alone will be a growth machine:
The 5G infrastructure market is expected to be valued at $2.55 billion in 2020 and is anticipated to grow at a compound annual growth rate (CAGR) of 75.09% during the forecast period (2025).
That is massive growth and more than double the cannabis industry's 34% CAGR.
Here’s the Deal
Right now the current 5G phones are a pieced-together affair, a hybrid that slaps a 5G modem on a 4G phone. This takes up more space in the phone and drains power.
However, by the first half of 2019, one company will start shipping its integrated 5G modem, which will use less power and take up less space.
Many tech magazines have reported that its 5G modem will become the de facto standard of the 5G era.
This company has already signed up 19 phone makers and 18 carriers for global 5G launches in 2019.
The names include a host of international device makers from Asus to ZTE, as well as carriers from AT&T to Vodafone Group.
To sweeten the pot further, it also has a 4.38% dividend yield. I’m working on the full report and will have it out in a few weeks.
I believe this 5G tech company will be a big winner in our 2019 portfolio. Maybe we can even beat last year's record.
- Bitcoin — a 2,528% gain
- Ethereum — a 1,040.32% and 39.95% gain
- Physical Rhodium ETC — a 163.34% gain
- USG Corp. — a 51% gain
- Canfor Corp. — a 58.21% gain
Not one loss in our closed 2018 positions.
And in 2019, I’ve already closed out Goldcorp for a 17.06% gain and Vina Concha y Toro SA for a 31% gain. In our open portfolio, members are seeing:
- Axon Enterprise, Inc. — up 110.82%
- Visa — up 104.85%
- Broadcom — up 43.49%
- Natural Resource Partners — up 36.33%
To make a long story short: We’re killing it!
Sure, we rode the crypto bubble and sold in time to bank lots of profits. Now we are looking for the next great moneymaking opportunity, and I think it will be 5G.
To be fair, I have to save those stocks for current members. But I will give you three rock-solid blue chip companies that are not only undervalued but should win big in the 5G rollout.
Here are three blue chip 5G stocks you should own now.
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Nokia (NYSE: NOK) was a huge cell phone maker before the iPhone took it down. After regrouping and reinventing itself, NOK is now a 5G equipment provider
Last year Nokia signed a $3.5 billion multi-year agreement with T-Mobile. Nokia will create and sell T-Mobile end-to-end 5G technology, including software and services, along with Nokia’s hardware. ANTEL and BT have also signed deals.
Nokia is a $5 stock with a $31 billion market cap and pays a 4.10% dividend.
Another old-school tech company that could win the 5G wars is Intel (NASDAQ: INTC). You might know Intel from the stickers on your computer.
However, as PC sales growth declined, Intel reinvented itself as a hardware supplier to the Internet of Things and data centers. When you are creating 100 times more data, you need to store it.
In 2018, data center revenue grew by 21%. It will continue to be a high-growth business for the foreseeable future.
And the great thing about Intel is that it is crazy undervalued. INTC has a P/E of 12.56 and pays a 2.32% dividend. The company has a profit margin of 29.72% and revenue of $70 billion. Revenue is growing at 9.40% year over year, and it has $11.65 billion in cash.
The share price is also in an uptrend — doubling last year after being flat since 1999. Intel looks like a great buy.
AT&T (NYSE: T) is the first carrier out of the gate with a 5G plan. The infrastructure and the phones won’t really be in place until next year, but they are coming on fast.
The problem with AT&T is it is not a pure play on 5G. The company is a behemoth with its fingers in telecom, media, and technology services. It owns WarnerMedia, Cricket, and DIRECTV, among others.
Cable cord cutting has hurt it, and so has the massive infrastructure cost of rolling out 5G.
The company has $5.21 billion in cash, but it also has $179.11 billion in debt. That said, quarterly year-over-year revenue growth has been 15.20%. It has a forward P/E of just 8.82 and pays a whopping 6.34% dividend.
And get this: AT&T has increased its dividend in each of the previous 34 years. If AT&T wins the 5G race, or even comes close, the boost in revenues will go back to direct payouts to shareholders.
Did I mention that it has a P/E of 8.82 and a 6.34% dividend? What more do you want, Scarlett Johansson in a red dress?
All the best,
Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor's page.
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