Today, I want to tell you about a new way to judge the value of a high-tech stock. It’s especially important since it’s a great way to spot winners in a market under pressure from fears of rising inflation.
It’s called free cash flow per share. It tells you a lot about how the company is managing its profit margins because the higher those margins are the greater the firm’s free cash flow.
With that in mind, a firm that’s doubling its free cash flow per share every six years would be an investment well worth taking notice of.
And that’s exactly what I have in mind for you today with a storied and very well-run leader in the $430 billion semiconductor sector.
Even better, it’s returning a lot of that cash flow directly to investors through yearly dividend increases, with the yield now at 2.3%.
Let me show you just how price appreciation and great dividend growth make this stock such an excellent investment…
Cryptocurrency is here to stay. In fact, I’d go so far as to say that it’s an unstoppable trend. Let me be totally clear about this; at this point, I think that most investors should have at least some exposure to cryptocurrency in their portfolios. Now, there are different ways to do this, whether that’s through some kind of ETF or even buying the most basic cryptocurrencies like Bitcoin and Ethereum through easy services like those offered by PayPal Holdings Inc. (PYPL).
I like to talk about pick and shovel plays because they are often the best way for you to claim a lucrative stake in a wide swath of a high-growth tech sector.
And I like to talk about just how much tech serves as the driving engine of the modern economy.
So, you can just imagine my excitement when I learned that Levi Strauss & Co. is embarking on a massive new $210 million digital spending program.
What we have here is a pick and shovel play, dating all the way back to the original California Gold Rush, where we get the term. And that company has decided it needs to go high-tech.
That means digital offerings, AI, and data analytics needed to thrive in the modern retail world where mobile and online shopping rule.
It’s all part of a sector that MarketsandMarkets says will be worth $1 trillion by 2025 as thousands more companies engage in digital transformation from legacy computer programs or paper-based systems.
And I have uncovered a great supplier firm that can help firms like Levi’s make the journey smoothly.
Over the last year, the fitness industry has gone through some big changes. Peloton became the hottest way to exercise as gyms across the country were closed and even companies like Lululemon have gotten in on home fitness, buying fitness start-up Mirror for $500 million. We also saw home workout company Beachbody go public via SPAC and now it is trading right near par value.