HIMX the poor mans NVDA

HIMX a stock to own now.

HIMX is being touted by some in the investment newsletter industry as the next stock for 10,000 % gains.  A tall order I must say.  The pitch also says they are one track for 15000% sales surge.  This is all based on the upcoming Virtual Reality/Augmented Reality explosion.  Now we certainly do not expect to Himax Technologies to trade at $100.00 but we do see upside as investors look for the next NVDA. We alerted members to NVDA on March 2, 2016.  See a few other Virtual Reality articles here.

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We see the Virtual Reality space being a niche market for now with the first adopters in the gaming space.  But time will tell just how large this market can grow.  For now perception and psychology along with some decent fundamentals is what will be the theme. HIMX has a decent product mix and their chips were in the first generation Oculas Rift.  They were also in the failed for now Google Glass.  We expect to see HIMX inside the Hololens as well.  So what does all this mean?  Most projections for Augemented Reality and Vitual Reality devices are from 3 million to 6 million units in the next year and ramping to 22 million to 35 million annually in the next 5 years. Not such a small number when HIMX could have $8.00 worth of chips in each device.

 

Himax designs and provides controllers for touch sensor displays, liquid crystal on silicon micro-displays used in palm-size projectors and head-mounted displays, light-emitting diode driver ICs, power management ICs, scaler products for monitors and projectors, tailor-made video processing IC solutions, and silicon IPs. In addition, it offers digital camera solutions, including complementary metal oxide semiconductor image sensors and wafer level optics, which are used in various applications, such as mobile phone, tablet, laptop, TV, PC camera, automobile, security, and medical devices. The company markets its products to panel manufacturers, agents or distributors, module manufacturers, and assembly houses; and camera module manufacturers, optical engine manufacturers, and television system manufacturers.  Read more about Himax here.

 

Notice the two in vogue, soon to be sectors Himax is actively engaged.  You got it, driverless cars and virtual reality.  Wall Street looks to the future right?  Take a look at TSLA for something that is trading on the hopes of future growth.  During the gold rush the real winners weren’t the miners, it was the vendors selling picks and shovels.  We are buying the pick and shovel vendor.  If the bulls can stay in control this month we think HIMX is a stock to own now.  Look for the $10.00 area to become support and wait for the crowd to catch on.

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Stay Nimble