I have one new pick this week, the hardware kingpin on the new remote world: Logitech International S.A. (LOGI), one of the largest makers of peripherals for the PC and mobile phone market, observes Tony Sagami, growth stock specialist and editor of Ultimate Portfolio.

Take a look at your mouse, keyboard or headset; there’s a good chance it was made by Logitech. Historically, its products have been predominantly used by video gamers, video streamers and other high-usage PC users, but it has enjoyed a big boost in business from the work-at-home crowd.

Not only are more Americans working at home, millions more are playing online video games and participating in a new booming industry called “e-sports.”

Lockdowns have forced teenagers and millennials to turn to activities that lets them social distance from others, which is why e-sport participation has skyrocketed.

Total revenues for the video gaming industry hit $179 billion in 2020, a 20% year-over-year increase, according to IDC. And it’s expected to rise to $189.3 billion in 2021, with the number of gamers rising to 2.8 billion.

gamers

All those nerdy gamers need equipment, which is why Logitech’s revenue at its gaming division jumped from $246 million to $436 million (see above table), a whopping 78% increase.

Better yet, Logitech recently increased its 2021 revenue growth forecast from 57%-60% to 63%. That’s impressive … but that was the fourth time Logitech has raised its guidance for 2021. Four times!

logitech

Not only is Logitech selling more hardware, it's making a mountain of money. Last quarter, Logitech reported more than a 300% increase in operating profits.

Logitech reports its next quarterly results in mid-April, and as the above chart shows, Wall Street is woefully underestimating the underlying strength of the work-at-home and video gaming trends.

A big bonus is that Logitech stock is a lot cheaper today than it was a few weeks ago when it hit $120 a share. Buy Logitech at market; then place a protective stop at $76.

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