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Tuesday, February 28, 2017 Stock Pick

Stock Price: $15.26

STMicroelectronics NV engages in designing, developing, manufacturing, and marketing semiconductor circuits and devices. It operates through Semiconductors and Subsystems segments.

STM is an Internet of Things play in Europe with a significant portion of its business from its automotive division. Its chips help with navigation and infotainment systems in higher-end autos. This business can easily trickle down to all vehicles over time providing STM with a solid revenue flow.

The company revenue has beat year-over-year numbers the last two quarters on this growth in their automotive chip business. STM is also in the business of sensors for consumer electronics, which will only grow as everyday devices become smart devices.

STM has put together an amazing chart climbing from just over $5 last July to a high of over $15 now. STM now sets at market cap of $12.88 billion with revenue last year of $6.3 billion and net income of $153 million. STM looks undervalued going forward with expectations on the company to grow earnings.

STMicroelectronics is extremely well positioned to take advantage of the Internet of Things space, which is expected to grow to $7.1 trillion by 2021.

Speculative Score: 1

1 Being the Least Speculative and Most Confident

10 Being the Most Speculative and Possibly the Most Risky

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