This Stock Has More Triple-Digit Upside
Today’s stock is another good example of one of my favorite strategies of picking top technology stocks. It is called venture capital, and it helps investors ride upcoming hot trends and make up to triple-digit gains.
These emerging companies provide products and services that are in high demand by a number of industries. Today’s highlighted venture capital stock stands to post huge gains because it enjoys proprietary technology that has become almost indispensable in the popular consumer technology devices of today.
Universal Display Corporation (NASDAQ:OLED) dominates the market in organic light-emitting diode (OLED) technologies and materials. This technology goes into the panels and screens in our mobile phones, TV sets, and a number of other lighting products. The company has patented this technology, which is fast becoming the standard in consumer electronic devices.
I am bullish on OLED stock for the following reasons.
The demand for these screens is likely to continue going up as consumers demand better and more energy-efficient displays and lighting products for consumer electronic gadgets. OLED technology is being used in smartphones and TVs, and will also be used in wearables and virtual reality (VR) devices.
Moreover, OLEDs have diverse applications in different sectors like automotive, healthcare, lighting, transport industries, and many others.
According to a report published by Allied Market Research, the organic LED market is expected to reach about $37.2 billion by 2020, posting a compound annual growth rate (CAGR) of 18.3% during the forecast period of 2014 to 2020. (Source: “Organic LED Market by Application…and Type…2014 – 2020,” Allied Market Research, last accessed June 16, 2017.)
OLED technology is gaining more acceptance among consumers, since the screens are thinner, brighter, more lightweight, and more power-efficient compared to Liquid Crystal Display (LCD) screens. Further, OLEDs offer wide viewing angles and faster response time among other benefits that enhance viewing experience.
Given its high-end materials and technology portfolio, Universal Display Corporation is perfectly positioned to gain from the popularity of this superior display technology. Samsung Electronics Co Ltd (NASDAQ:SSNLF) is the largest customer of the company and its “Galaxy S8” already has OLED screens. The upcoming “iPhone 8” by Apple Inc. (NASDAQ:AAPL) is rumored to have OLED screens. OLED stock will get further boost if this indeed turns out to be the case.
And the promising story does not end here. The company is investing in new display technologies and materials that give it a competitive edge in the market. It continues to focus on developing new OLED technologies and next-generation materials.
One of its most exciting projects is Organic Vapor Jet Printing (OVJP), which is a groundbreaking printing process. Universal Display believes that this technology is a very good option for cost-effective OLED manufacturing, mainly for the large-area OLED TV market. (Source: “UNIVERSAL OVJP (Organic Vapor Jet Printing),” Universal Display Corporation, last accessed June 16, 2017.)
With new agreements signed in China and recent acquisitions, the company is set on a multi-year growth path.
Things are phenomenal on the earnings front too. The company posted stellar first-quarter results, beating Q1 expectations and upping its guidance last month. Total revenue increased by 87% on the back of higher material sales as well as royalty and license fees.
Universal Display stock has more than doubled year-to-date, with gains of almost 300% over the past five years.
Chart courtesy of StockCharts.com
The company’s broad portfolio of intellectual property and focus on licensing its technologies to product manufacturers bodes well for the future growth of Universal Display. Although the stock has gone up substantially, there are a number of catalysts that could push OLED stock higher in the coming days.
The Bottom Line on OLED Stock
There are good indications that Universal Display stock can continue its upward march. The adoption of OLED displays continues to grow across consumer technology products. As stated in the company’s annual report, in 2016, OLED penetration of the smartphone market reached approximately 25%, and OLED TV shipments more than doubled, to about 900,000 units. There are product road maps being built for new applications, and Universal Display is ready to capitalize on these opportunities.
The sky could be the limit for this venture capital stock, which is riding high on the strength and superiority of its technologies. Investors might want to consider investing in OLED stock on any sign of price weakness.