There are many exciting global investment themes creating incredible change and investment opportunities in the market today. The Internet of Things (IoT), cloud computing, data analytics, biotech, disruptive technology, robotics, cyber security, and social networking are some of the tech trends transforming our lives. Let’s look in detail at just one of these.
The Internet of Things (IoT)
The IoT will connect everything from your car, to your smart thermostat, to even your outdoor voice-activated grill in the near future. The emerging IoT will provide connectivity to a variety of devices, such as sensors, home appliances, and consumer electronics. Many companies are investing heavily into this megatrend and developing exciting products for this tech evolution.
IBM has just invested $3 billion into the IoT. For GE, the IoT which the company calls the “Industrial Internet” is a massive growth engine for their business. There are many cyber security companies that will also benefit. Palo Alto Networks (PANW) and Cyber Ark Software (CYBR) are two leaders worth mentioning. With connected devices set to triple to 50 billion by 2020, many chip makers will benefit tremendously. Skyworks Solutions (SWKS), a maker of RF technology will see rising demand for their smartphone chips. Skyworks is currently up 30% year-to-date and 255% over the last three years.
Big Brands are also Betting Big
If you’re planning to buy the Apple Watch, or you can’t seem to get the Frozen lyrics Let It Go out of your mind, you might want to consider buying Apple or Disney shares. These two companies are inextricably intertwined into everyday life for many of us.
These brands serve as an example of how adding international investments to your portfolio will allow you to profit from global diversification, potentially save you money in capital gains, hedge currency risk, and ultimately help you earn solid returns.
Apple (APPL) has risen 119% over the last two years, and 20,603% since inception. Apple trades at a discount at 17 times earnings, versus the S&P 500 which is trading at 19 times earnings. Apple is already up 15% year-to-date. I feel many analysts are underestimating the importance of Apple’s focus on the IoT, including Apple Pay and the launch of the Apple Watch. The founder of my company is already eyeing one of the Apple luxury watches, and I think many others out there are also.
Walt Disney Co. (DIS) is a global entertainment company with shares rising 15% year-to-date, 78% in the last two years and 57,893% since going public in 1957. Disney’s theme parks continue to bring in impressive revenue. Disney has recently invested $1 billion into a “magical” IoT wristband that will handle all park transactions and help personalise a child’s Disney experience so that Mickey can even greet them by name, for example. The Star Wars trilogy, the Marvel franchise, and creation of new franchises like Frozen, with multi-year sequels planned, will also continue to make this company a solid bet.
The IoT is hardly a niche investment play. If you’re looking to invest into it, there are plenty of ways to profi t offshore. It shouldn't be much of a surprise that large global brands are betting big on the Internet of Things market. Why shouldn’t you?
Wade Dawson is an American living in Johannesburg and is the Africa Regional Manager for Austen Morris Associates. If you would like more o shore investment tips go to www.austenmorris.com or follow us on Linked In. Wade can also be reached by e-mail on [email protected] or follow him on twitter @wadedawson4
Published online with permission from Forbes Africa, originally printed May 3, 2015, Forbes Africa