An Insider's Guide to Nanotech

04/15/2005 12:00 am EST

Focus:

Josh Wolfe

Editor, Forbes/Wolfe Emerging Tech Report

Josh Wolfe, nanotech expert and industry insider, offers investors an unparalleled opportunity to learn about a fascinating emerging technology. At his workshops, he explains not only on where to invest, but what to avoid. Here is a sampling of his recent insights.

"I think 2005 will be a much better year for nanotechnology stocks and prices will rise. Nanotech stocks will continue to be volatile, but I predict the next upswing will be quick and pronounced. So the times to buy into this sector are times like the present when there is little excitement in nanotech on Wall Street. As the real science of nanotechnology proves itself, and big company initiatives make headlines, you will see these stocks take off again.

"NVE Corporation (NVEC NASDAQ) is a battleground stock, plain and simple. But of all of the Nanosphere stocks, we believe NVEC has the greatest potential upside in 2005. A company trading at 53 times its trailing 12-month's earnings might seem expensive for most value investors, but it obscures its scalable business model. The company has been developing spintronic-based MRAM since 1989, working mainly off government research grants. They’ve built up an impressive intellectual property portfolio, consisting of 32 issued US patents and over 100 patents worldwide, either issued, pending, or licensed. Spintronics is a nanotechnology that utilizes a quantum property of electrons called spin rather than its electric charge.

"The advantages of storing information in magnetism rather than electrical charge are enormous and MRAM has been called the holy grail of memory, because it promises more compact, more efficient, and more secure data storage than conventional RAM. MRAM development has been delayed by a year, not surprising given the difficult-to-predict technology development cycle. Meanwhile, the stock’s risk-to-reward has never looked more favorable and any announcement of commercial MRAM introduction will send the stock soaring. In the meantime, NVEC will continue to be a highly volatile stock. But we believe its current price has discounted worst-case scenarios for the company's leading position in MRAM."

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