Samsung: Tech Powerhouse

09/10/2013 10:00 am EST


Jim Powell

Principal Analyst, Global Changes & Opportunities

This South Korean stock is a technology powerhouse that I think every long term investor should own, says Jim Powell, editor of Global Changes & Opportunities Report.

Samsung Electronics (SSNLF) is not only South Korea's most successful tech company, it is also a global trendsetter. Its list of cutting edge products includes HDTVs, Blu-rays, digital cameras, computers, and Android-based devices.

The company's Galaxy smartphones and tablets are taking sales away from Apple, an accomplishment that few analysts thought was possible.

Larry Ellison, founder and CEO of Oracle, said recently that Samsung “may be the number one technology company in the world.” I concur.

Samsung also makes advanced home appliances including high-end washing machines, dryers, refrigerators, and so on. Less well known, but also very profitable, is Samsung's line of digital imaging equipment for hospitals.

In addition, the company is a leading manufacturer of semiconductors, semiconductor manufacturing equipment, and chemicals.

Alas, there is a catch with Samsung. At the present time, the company is only available in the US through the Over The Counter (OTC) market, known as the Pink Sheets.

Although the OTC market has come under tighter regulation in recent years, it's still not a place for most investors. So few shares, of even large companies, are often traded each day, therefore big price swings are common.

If you make the mistake of placing a market order (you pay whatever the price happens to be when your order is filled), you could be hit with an astronomical bill. With a market sale you could suffer a huge loss.

I think you should steer clear of the OTC market, which is why I didn't suggest buying Samsung via the Pink Sheets.

However, Samsung is available in the German and the UK stock markets, which are available to US investors. (The symbols are (GR:SSUN) and (LSE:BC94) respectively.)

Prices on these exchanges are easy to follow—but trades are more expensive than for US listed stocks, and not all brokers offer them.

The bottom line is, I think long-term investors should have Samsung Electronics in their long-term accounts. This should be a particularly good time to invest, because prices have dropped, due to concerns about the global economy.

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