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Always On, Always Connected
10/06/2013 9:00 am EST
It seems like everyone is always connected to everything else, which is why Chris Versace has his eye on these tech and voice companies.
CHARLES GITHLER: Welcome to the MoneyShow.com video network. I'm Charles Githler here with Chris Verscace. We're talking about power trend profits. Give us some ideas in the disruptive areas that you look at.
CHRIS VERSCACE: Sure.
CHARLES GITHLER: In technology.
CHRIS VERSCACE: Well, for me the way I look at technology is I don't necessarily call it technology, Charles, I look at it more as the shift towards an always on, always connected society, and how people are changing their habits. If you think about the pervasive use of smart phones, tablets, and other online services, it's a real shift in the way we've done business, the way we've interacted with people, stayed in touch with people, and for that I try to look at not only some of the key players but some of their key suppliers.
So while people are looking at smart phones and you might go Apple or Samsung, I delve down a little bit deeper and look at the ecosystem, and a fantastic company is Qualcomm. They're continuing to take share for the base band business. They're expanding their presence in the application processor market, and long term I think Qualcomm is a huge beneficiary from this shift not just from smart phones and tablets, but the connected car and the connected home. There's a lot of drivers for their business, and you can look at other beneficiaries of mobile, such as eHealth for example. We're seeing a lot of applications out there. One example would be Nike's fuel band but there are others that are coming, and if we think of some potential insurance changes that are coming as a result of the Affordable Care Act where people might get reimbursed for medical apps and equipment that's going to be connected, that's a huge boon potential for Qualcomm.
CHARLES GITHLER: Any other ideas?
CHRIS VERSCACE: We like Facebook a lot. Facebook in our view, I didn't like Facebook after the IPL, I didn't think that they were attacking mobile correctly. I didn't think they were really embracing the potential advertising model that they had, so I kind of shied away, but around $24 and watching what the company had done in term of getting, repositioning really its advertising efforts and really increasing the use of mobile usage over the last nine months or so, I thought the risk/reward was fantastic.
We've had a nice pop in the stock, so we recommended trimming that position back but they're doing some things now even just this last couple days where they're working to bring TV listings, restaurant menus to the mobile offering. They're also getting ready to use voice services which I think are fantastic. They made a small acquisition, and I'm very big on voice, and as we're talking about voice, I also like Nuance Communications, NUAN. They're one of the key suppliers behind Apple's Siri product but they're also benefiting from the pervasive use of voice, not just with smart phones and tablets but also in the connected car as well and other markets. So Charles, when you call to check on your bank accounts, you probably get that automated voice. Guess what, that's Nuance's technology.
CHARLES GITHLER: Nuance. Do they have competition?
CHRIS VERSCACE: They do have some competition. IBM has some products, Google has some products, but Nuance is a pure play, what makes it really interesting is Carl Icon has been ratcheting up his exposure to the stock from about 6% to something north of 15%. Could be an interesting play. He does get involved and try to shake things up a little bit.
CHARLES GITHLER: Indeed he does. Well, that's fantastic. We've been speaking with Chris Verscace at the Power Trends Profits newsletter. It's a pleasure to have you with us.
CHRIS VERSCACE: Thanks, Charles, I appreciate it.
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