technology opportunity

October 2021

TechnologyOpportunity

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October 2021 Issue

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In This Month’s Issue:

• The Race to Secure America’s Semiconductor Supply Chain• New Recommendations: Skyworks Solutions (NASDAQ: SWKS) and

Microchip Technology (NASDAQ: MCHP)• Portfolio Snapshots and Updates

The Race to Secure America’s Semiconductor Supply Chain

It took more than a year for the U.S. commerce secretary to say what we’ve known all along: The semiconductor shortage crisis isn’t going away.

A few weeks ago, Secretary Gina Raimondo went on record saying, “It’s a huge problem... Everything in your life that has an on-off switch requires semiconductors — your phone, your car, all of the electronics around you.”

Although this may seem painfully obvious to our investment community, we can’t say we didn’t see this coming.

But for the sake of our newer members, let’s catch everyone up to speed.

And make no mistake, this situation was a perfect storm for a crisis.

As Secretary Raimondo so aptly pointed out, semiconductors are a vital component of nearly every piece of technology that makes our lives easier today.

Mind you, these shortages aren’t without precedent.

We’ve seen chip shortages in the past.

Perhaps some of my readers remember the craze over Tamagotchis in the late 1990s? In 1997, a massive surge in demand for these “digital pets” took up a large amount of the semiconductor capacity and threw the entire industry into chaos. Delays and shortages for semiconductors were rampant that summer.

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Now, let’s fast-forward to 2020.

Things were going well until the COVID pandemic hit and put an incredible strain on the world’s semiconductor supply chains. As the pandemic finally made its way to the United States, everyone was expecting a market slowdown, if not a complete collapse.

While some companies like Huawei were stockpiling chips for more than two years, some industries were caught completely off guard.

The auto industry alone suffered an incredible loss of $210 billion worth of sales in 2021.

Simply put, the world’s largest automakers failed to invest in such a key ingredient to the technology used in their vehicles. In North America, the production of approximately 1 million vehicles was impacted.

Ford was suddenly hit with delays on five of its top 10 models. GM’s CEO came out and told us that this shortage cost the company roughly $2 billion in lost earnings.

So why not just boost supply?

Well, remember that constructing the necessary fabrication plants to build these chips and boost supply can take up to five years, with costs that run as high as $10 billion.

In other words, there’s no quick fix to all of this.

The situation becomes even grimmer in the United States.

You see, just two companies — Taiwan Semiconductor and Samsung — control nearly three-quarters of the global semiconductor market. As you might imagine, this puts enormous pressure on companies in the U.S.

At least, it’s put enough of a strain on our companies that the U.S. government is stepping in.

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Back in June, the U.S. Senate passed the United States Innovation and Competition Act, which seeks to increase competitiveness for our domestic chip research, design, and manufacturing.

The legislation comes with a plan to help boost our chipmakers to the tune of $52 billion. It is currently working its way through the House of Representatives and may soon find itself on the president’s desk.

Regardless of how soon this bill passes, this crisis isn’t abating anytime soon. The market is expecting the chip shortage to last well into 2022, perhaps even longer.

The game-changer here will be how chip manufacturers are able to respond and add to their manufacturing capacity. But again, increasing supply could take more than two years to finally satiate demand.

At the very least, we are confident that the supply/demand fundamentals will remain tight as we move into 2022.

And it’s with this in mind that we move to the two newest additions to our model portfolio…

New Recommendations

Skyworks Solutions Inc. (NASDAQ: SWKS)

Skyworks Solutions (NASDAQ: SWKS) is a strong semiconductor player that designs, develops, manufactures, and sells semiconductor products and solutions for wireless connectivity. Its product list includes power amplifiers, filters, switches, and integrated front-end modules that support wireless transmissions.

This stock has been holding strong throughout the relentless semiconductor crisis and is still a rock-solid, long-term play.

Of course, like many of its competitors, its future success is closely intertwined with the ongoing 5G revolution.

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The company’s analog semiconductors help connect everything, and its solutions are expanding into a vast number of new markets. We’re talking about the aerospace and automotive sectors, as well as new broadband, entertainment, industrial, gaming, medical, and military markets.

And we certainly can’t leave out the fact that every day, Skyworks is bolstering its share in huge markets like the smartphone, tablet, and wearable markets.

Need proof?

Every one of us knows how volatile 2020 turned out to be for stocks. Most businesses were in trouble as economic growth ground to a halt.

However, Skyworks has shown that it can outperform the market.

During the company’s third quarter for fiscal 2021, it reported net revenues of $1.12 billion, representing a 52% year-over-year jump. That’s a notch lower than last quarter’s 53% jump but not enough to cause concern, especially since Skyworks CEO Liam Griffin predicted the company will hit anywhere from $1.27 billion–$1.33 billion during the fourth quarter.

Moreover, the company has managed to exceed analysts’ earnings expectations for an entire year now. It’s becoming pretty easy to see who is thriving during the semiconductor crunch.

Even though Apple played a huge role in the company’s recent success, the value here for us goes far beyond the iPhone.

Remember, Apple accounted for more than half of Skyworks’ revenue in 2020. So when smartphone sales exploded to a record 79.94 million units during the fourth quarter of 2020, it was great news for shareholders.

In other words, the more iPhone 12s that are sold, the more cash pours into the company’s coffers.

Now, keep in mind, Apple’s highly anticipated iPhone 13 series is the model to hit shelves this year.

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Apple is wildly bullish over this flagship’s future sales. The company has reportedly told its suppliers it plans on building up to 90 million iPhones this year, compared with the 75 million manufactured in 2020.

But Skyworks isn’t just a one-trick pony anymore. After all, what happens when Apple suddenly decides it wants to bring that production in-house?

Well, the company has already made a few moves to de-risk itself from that event should it occur.

In April 2021, the company announced it had entered into a definitive agreement to acquire Silicon Laboratories’ infrastructure and automotive business for $2.75 billion.

Among the huge perks to this deal is that it puts Skyworks Solutions in a perfect position to take advantage of the red-hot boom in electric and hybrid vehicle markets.

The growth potential will be enormous, and the company believes this kind of market opportunity is valued at approximately $20 billion annually.

We rate Skyworks Solutions (NASDAQ: SWKS) a “Buy” under $245. The risk level is “Low.”

Microchip Technology (NASDAQ: MCHP)

I’ve told you before that practically zero investors in today’s market have ever heard of the tech firm that’s pumping out the chips necessary to operate the tech in virtually every home in America.

Let me introduce you to Microchip Technology (NASDAQ: MCHP).

Microchip Technology was founded in 1989 after a spinoff from General Instrument. And when I say this company’s chips power the everyday gadgets and devices you’ll find in every home in the country, I mean it.

You see, it comes down to a core piece of technology known as the MCU.

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No, I’m not referring to a universe of superheroes. Short for microcontroller unit, the MCU is a type of semiconductor that is made up of a processor unit, memory modules, communication interfaces, and peripherals.

The lower-end 8-bit MCUs, like the ones offered by Microchip Technology, are a vital component to the household electronic devices we often take for granted. They’re utilized in products like washing machines, robot and drone technology, and even the video game controllers kids use for hours on end.

Over half the company’s revenue derives from a vast array of electronic devices you use every day, from the chips in your garage door opener all the way down to the ones that are found in the power windows of your car.

These may not be the most technologically advanced devices we use, but they’re arguably more important than the most advanced tech in other industries.

Simply put, we owe many of the comforts of our modern life to this company.

However, the growth potential of this company goes beyond everyday electronic conveniences.

The company also provides a number of automotive-grade products, including analog, connectivity, memory, MCUs, security, timing, and touch. These products use a tiny amount of power and can operate in high-temperature and electromagnetic environments.

Once again, we find ourselves capitalizing off the transition toward electric and hybrid fleets. And make no mistake — electric and autonomous vehicles have enormous potential for chipmakers like Microchip Technology.

We are way past the technology that’s powering your windows. The company’s products can be utilized in sensors and electric motors, as well as the support systems in your car.

Ever see a new car commercial touting the lane assist, new parking sensors, or even collision-avoidance technologies?

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Like our other power plays, Microchip Technology has been outperforming its competitors, and the numbers prove it.

During its fourth fiscal quarter of 2021, the company reported record net sales of $1.46 billion, a nearly 11% year-over-year increase. This period was also one of its strongest on record in terms of MCU revenue.

For the full fiscal year of 2021, the company posted record sales of $5.4 billion and experienced record gross margins of 62.1%, record operating income of $998.1 million, and a net income of $349.4 million.

Sounds pretty good so far, right? Well, it gets better. Microchip already released earnings for its first fiscal quarter for 2022 and showed rock-solid 19.8% year-over-year growth at $1.57 billion.

After more than 30 years of developing its technology and being a leader in semiconductors, Microchip Technology is a stock we can’t afford to ignore any longer.

I have just one final note on Microchip Technology…

Tomorrow the company will execute a previously announced 2-for-1 stock split. The split is effective for any shareholder on record as of October 4. The good news is that this move will make shares far more affordable to smaller, individual investors.

We rate Microchip Technology (NASDAQ: MCHP) a “Buy” under $160. The risk level is “Low.”

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Portfolio Snapshots and Updates:

ABB Ltd. (NYSE: ABB)Snapshot:

ABB is a Swiss-Swedish robotics firm that specializes in industrial automation. The company is one of the largest global suppliers of electrical equipment and automation products in the market, and the second-largest robotic arm supplier in the world.

It ranks as a top-200 Forbes company and is one of the largest engineering firms in the world with over 135,000 employees, operations in 100 countries, and annual revenue of over $35 billion.

Updates:

Even with ABB shares falling slightly this past month, the company is moving forward with a few bold projects. Around the end of September, ABB officially broke a world record for the fastest electric vehicle charger ever made.

The newly released Terra 360 charger is another giant step toward the world’s inevitable electric future. The modular system can charge up to four vehicles at once, and it can provide more than 60 miles of driving range in less than three minutes. For most standard batteries, a full charge will take around 15 minutes.

The new record might not hold up long, especially considering how much money is going into EV infrastructure these days.

We haven’t seen any confirmation yet, but the new Terra 360 charger’s first public appearance could be at the upcoming ABB FIA Formula E World Championship race. Coming to Vancouver in 2022, this all-electric event will showcase some of the best EV tech available today.

ABB joined the Formula E partnership back in 2018. Since then, it has been a valuable promotional tool for both the company and for the EV industry in general.

We rate ABB Ltd. (NYSE: ABB) a “Hold,” with a buy limit of $35. The risk level is “Medium.”

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Allied Motion Technologies (NASDAQ: AMOT)

Snapshot:

Allied Motion Technologies, formerly known as Hathaway Corporation, is an American manufacturer of motion control systems and other robotics components. The company’s products are used in automated farm equipment, Amazon factory robots, and prosthetic limbs, just to name a few applications.

The company was founded in 1939 in Denver, Colorado. Today, it is based in Amherst, New York, and its business is almost evenly split between domestic and international customers.

Updates:

Allied Motion Technologies once again gave us a slow news month. Other than the company’s plan to sell off $275 million worth of securities, no press releases, new projects, or major deals were announced.

Allied Motion didn’t offer any explanation for the sale, but all signs point toward strong growth in the company’s future. For the last three straight years, it showed compounded growth of 25% per year.

That’s not too shabby for a company still working through a pandemic-induced slump.

We rate Allied Motion Technologies Inc. (NASDAQ: AMOT) a “Buy” under $50. The risk level is “Medium-Low.”

Analog Devices Inc. (NASDAQ: ADI)

Snapshot:

Analog Devices is an American-based semiconductor company that practically wrote the book on data conversion, digital signal processing (DSP), and power management technology. True to its name, the company specializes in an endless array of analog-to-digital converters to measure things like sound, light, heat, and pressure.

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As one of the earliest players in the industry, Analog Devices used to account for close to 50% of the total data conversion market share. ADI currently has deals with more than 125,000 customers in nearly every industry on the planet.

Updates:

After a yearlong drought left the semiconductor industry stranded, the rising tide is finally coming to lift it back up. Foundries are either being built or reopened, and chipmaking is starting to become a global industry.

One of Analog Devices’ biggest post-merger contracts is coming from Lotus Cars. The newest line of electric vehicles from Lotus will contain Analog Device’s wireless battery management system.

This combination of hardware and proprietary software helps extend the life of EV batteries by monitoring internal conditions and adjusting power in key areas.

On the business side, management at Analog Devices has just announced a public offering of senior notes. The company will be selling off a grand total of $4 billion in assets, according to the following breakdown:

• $500 million in floating rate senior notes due 2024

• $750 million in 1.700% sustainability-linked senior notes due 2028

• $1 billion in 2.100% senior notes due 2031

• $750 million in 2.800% senior notes due 2041

• $1 billion in 2.950% senior notes due 2051

Analog claims that the new sale is to cover debt repayments from previous outstanding notes, some due by the end of this year.

We Rate Analog Devices Inc. (NASDAQ: ADI) a “Buy” Under $190. The risk level is “Medium-Low.”

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Appian Corp. (NASDAQ: APPN)

Snapshot:

Appian Corp. provides a platform that enables almost anyone to take advantage of powerful computer coding and automation processes. Thanks to a new type of programming called “low-code,” users can build customized applications and automate tasks without a computer science degree.

The interface is simple, but the platform is sophisticated enough to work with sensitive industries like cybersecurity, finance, and medicine. Appian’s system is proven to increase worker productivity and satisfaction, improve operational agility, and optimize workflow.

Updates:

Appian has been crushing expectations since we first laid eyes on the company. Its sleek and powerful low-code automation has endless uses in any industry you can imagine.

Since we last covered Appian’s activity in September, the company hasn’t made any waves to speak of. But to give you a glimpse of the type of deals Appian has made recently, here’s a brief list of 2021’s greatest hits:

• In July, Appian opened a new regional office in Japan. The company has been pushing into the Asia-Pacific region more and more recently, and analysts predict nearly 75% of all application development will rely on low-code platforms by the end of 2021.

• In early August, one of the top process mining laboratories on the planet became part of the Appian team. Lana Labs, the developer behind the LANA Process Mining Platform, was acquired for an undisclosed amount. With Lana in its corner, Appian can offer the best low-code automation suite in the industry.

• Later in August, Appian helped bring Pandora Jewelry’s 2,500-person workforce back into its Baltimore headquarters. A low-code workforce safety program is currently helping ensure the transition is as smooth and safe as possible.

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Low-code platforms are going to start replacing an entire IT department in the very near future. And so far, Appian has the strongest low-code development suite on the market.

We rate Appian Corp. (NASDAQ: APPN) a “Buy” under $150. The risk is “Medium.”

Beyond Meat (NASDAQ: BYND)

Snapshot:

Beyond Meat is one of the world’s largest producers of plant-based meat substitutes — and the first publicly traded company to focus exclusively on this industry. The company was founded as a California-based startup in 2009. Today, it sells its surprisingly realistic chicken, beef, and pork substitutes in 50 international markets and from 27,000 U.S. distribution points

Updates:

Beyond Meat has been continuing its aggressive expansion this past month with a slew of new contracts in a handful of different countries. The McPlant burger at McDonald’s is currently making its way through the U.K. and Ireland in preparation for a nationwide launch by 2022.

McDonald’s has made it painfully clear that the new sandwich will be cooked separately with dedicated utensils, most likely to prevent the cross-contamination that dragged Burger King into court last year.

Beyond Meat is also starting a project with another household name: PepsiCo. By the end of 2022, the two companies are hoping to roll out a series of plant-based protein snacks.

PepsiCo’s new “pep+” initiative has a laundry list of green initiatives like recycling plastic and creating compostable packaging.

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All over the world, consumers are starting to choose healthier food options. Even fast-food restaurants are starting to bow to the pressure. By 2025, the industry is expected to grow over $8 billion.

We rate Beyond Meat Inc. (NASDAQ: BYND) a “Hold.”

Brooks Automation (NASDAQ: BRKS)

Snapshot:

Brooks Automation is a uniquely positioned robotics stock, as it allows us to play both consumer technology and biotech at the same time. The firm is headquartered in Chelmsford, Massachusetts, with direct operations in North America, Europe, and Asia. Brooks provides both automation and cryogenic solutions for multiple markets, which include semiconductor manufacturing and life sciences. Its robots help companies automate the storage, retrieval, and testing of biologic samples so scientists don’t have to. This is all done to ensure consistency and to help fight against accidental contamination or injury.

Updates:

Instead of splitting into two public companies as planned, Brooks Automation will instead be selling off its Semiconductor Solutions Group for $3 billion in cash. Going forward, the bulk of the company’s focus will be on the faster-growing life sciences division.

The news sent stock prices up about 10%, eventually settling above $100 at the time of writing. Only time will tell whether or not the split will have lasting effects on the newly halved company.

But considering its life sciences division earned almost half a billion in revenue last year alone, I’d say Brooks is more than capable of continuing its solid growth.

We rate Brooks Automation (NASDAQ: BRKS) a “Buy” under $105. The risk level is “Medium.”

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Desktop Metal (NYSE: DM)

Snapshot:

Desktop Metal manufactures 3D printers to make metal and carbon-fiber 3D printing accessible to all engineers, designers, and manufacturers. The company’s technology is utilized in a wide range of sectors and products, from automotive parts to consumer goods to the manufacturing of industrial equipment to the design of mechanical systems.

Updates:

One of our newest additions to the portfolio heard some promising news this month: Demand from European manufacturers is starting to explode, especially for Desktop Metal’s newest proprietary Shop System.

This metal binder jetting printer is the first of its kind to be specifically designed for machine shops. Desktop Metal reported strong demand from top-tier manufacturers in France, Finland, Germany, Greece, Italy, Portugal, Spain, the Netherlands, and the United Kingdom.

This new technology is Technology and Opportunity’s bread and butter precisely because it could completely upend some of the biggest industries on the planet.

It can save huge amounts of money in one of manufacturing’s most dreaded tasks: prototyping. Instead of endless rounds of redesigning, designers can print any part in-house for a fraction of the cost.

This system is something that product engineers have been dreaming about for as long as their field has existed.

We rate Desktop Metal (NYSE: DM) a “Buy” under $15.00. The risk level is “Medium.”

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Drone Delivery Canada Corp. (OTC: TAKOF)

Snapshot:

Drone Delivery Canada Corp. is a drone-manufacturing firm based in Toronto. The company is designing, developing, and implementing a commercially viable drone delivery system. Drone Delivery Canada Corp. has built drones that can carry up to 400 pounds. It already has commercial customers and plans to establish up to 150,000 drone delivery routes in Canada.

Updates:

Drone Delivery Canada and most of the drone industry itself have been quiet this month. Aside from a large raven attacking a California-based company’s coffee delivery drone, there hasn’t been much development to speak of.

Check back with us next month for any new updates on Drone Delivery Canada and the drone industry itself as they await the FAA’s ruling on long-range flights.

We rate Drone Delivery Canada Corp. (OTC: TAKOF) a “Buy” under $2.50. The risk level is “High.”

Everspin Technologies (NASDAQ: MRAM)

Snapshot:

Everspin Technologies offers magnetoresistive random access memory (MRAM) products. The company’s portfolio includes both Toggle MRAM and spin-transfer MRAM products that deliver superior performance, persistence, and reliability in non-volatile memories that transform how mission-critical data is protected against power loss.

Updates:

Everspin hasn’t given us enough news to dive into this month, but I did want to point out something I noticed while looking at the company ownership breakdown.

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According to a recent analysis, 20% of the total shares are owned by institutions. That means hedge funds dug deep into Everspin’s inner workings and decided it was a safe bet.

Insiders own 4.2% of the total shares, which is to be expected for a company this small. A major factor we will continue to watch is whether or not these insiders choose to buy or sell in the future.

We rate Everspin Technologies (NASDAQ: MRAM) a “Buy” under $8.50. The risk level is “Medium.”

Global X Lithium & Battery Tech ETF (NYSE: LIT)

Snapshot:

The Global X Lithium & Battery Tech ETF invests in the full lithium battery cycle, from mining and refining the metal through battery production. It’s designed to correspond to the Solactive Global Lithium Index. The fund invests at least 80% of its total assets in securities of companies that are economically tied to the lithium-ion battery industry.

Updates:

We’ve been preparing for the lithium boom to really kick into overdrive as optimism returns to a post-COVID market.

And the numbers are certainly on our side here…

By 2030, the world’s lithium consumption is projected to increase fivefold, with producers struggling to meet demand.

Unfortunately, bringing on new supply isn’t as easy as you think. Sure, we expect new projects to be announced as demand grows, but remember that taking a project from inception to production is a long and costly process.

In fact, lithium prices have more than doubled in 2021.

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Of course, this is great news for our Global X Lithium & Battery Tech ETF, which owns a piece of every major lithium producer on the planet; Albemarle Corp. is its largest holding and accounts for over 14% of its portfolio.

After watching our ETF run higher over the last seven months, we may finally see a new buying opportunity emerge.

Today, we’re raising our buy limit to $95.

We rate Global X Lithium & Battery Tech ETF (NYSE: LIT) a “Buy” under $95. The risk is “Medium-Low.”

Intellia Therapeutics Inc. (NASDAQ: NTLA)

Snapshot:

Intellia Therapeutics is a genome editing company that develops proprietary, potentially curative CRISPR/Cas9-based therapeutics. The company’s pipeline includes vivo development programs targeting genetic diseases, including transthyretin amyloidosis and hereditary angioedema, and ex vivo programs, which include acute myeloid leukemia.

Updates:

Within the past few months, Intellia Therapeutics has established a clear standard in the CRISPR/Cas9 gene editing community. Its NTLA-2001 treatment cleared FDA hurdles with flying colors and is now approaching the next phase of human testing.

This month, Intellia is continuing the momentum with its next accepted trial, dubbed NTLA-5001. This ex vivo treatment, meaning the targeted T cells are engineered outside the body, will become the first of its kind to treat the particularly nasty acute myeloid leukemia (AML). Intellia plans to get moving with the initial patient screening by the end of this year.

As a company, Intellia is one of the more promising players in the bleeding-edge gene editing sector. With the unofficial “mother of CRISPR” at the helm, Intellia has more than enough star power to rise above the latecomers.

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Share prices have been trending downward this month, possibly due to the more skittish investors getting impatient between trial results. For any still on the fence, Intellia has another landmark announcement: The company will be rolling out its latest and greatest treatment, NTLA-2002. The target this time is hereditary angioedema, a disease that causes patients to build up excess fluid around vital organs.

Patient enrollment will begin in New Zealand before the year is out. We will be keeping a close eye on Intellia in the near future as these trial results can easily make or break even the best stocks.

Intellia Therapeutics is rated a “Buy” for us under $180. The risk level is “Medium.”

II-VI Inc. (NASDAQ: IIVI)Snapshot:

II-VI (pronounced “two-six”) is a vertically integrated manufacturer of optoelectronic, photonic, and semiconductor products including lasers, fiber-optic equipment, and hardware for facial-recognition systems. The company was founded in 1971 and is based in Saxonburg, Pennsylvania.

II-VI has exploded in recent years through acquisitions. In late 2019, it gained Finisar, an optical communications equipment manufacturer and former Technology and Opportunity portfolio company that developed components for the iPhone’s facial recognition system.

Updates:

Although there are no major updates from II-VI this month, keep an eye out for November 5, 2021, when the company releases its next earnings report.

Analysts are expecting II-VI to post earnings of $0.83 per share.

I hope to have more news for you on the company’s operations soon.

We rate II-VI (NASDAQ: IIVI) a “Buy” under $105. The risk level is “Medium-Low.”

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KVH Industries Inc. (NASDAQ: KVHI)

Snapshot:

KVH Industries is a manufacturer of mobile satellite communications, guidance, and stabilization equipment and solutions for consumer, commercial, and military applications. It operates in two main segments: mobile connectivity and inertial navigation. As of today, the bulk of the company’s revenue comes from its maritime internet connectivity business. The real focus of KVH Industries is the fiber-optic gyroscopes (FOGs), a kind of inertial measurement unit (IMU). FOGs are highly accurate electronic components that measure the orientation and movement of various pieces of hardware and machinery. Although FOGs make up a small part of KVH’s top line, soon this segment will overtake its maritime business.

Updates:

Since our last issue, KVH Industries announced that it has been awarded three excellence awards by the National Marine Electronics Association (NMEA). The NMEA consists of the best marine electronics professionals in the United States.

The company’s TracVision UHD7 was given the 2021 Product of Excellence Award in the satellite TV antenna category, while its TracPhone V30 earned the 2021 Product of Excellence Award in the satellite communications antenna category, and its TracPhone LTE-1 nabbed the prize for 2021 Product of Excellence Award in the Wi-Fi/cellular device category.

KVH is also scheduled to announce its Q3 results later this month on October 27, 2021.

KVH Industries Inc. (NASDAQ: KVHI) is a “Buy” under $15. The risk level is “Medium.”

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Magnachip Semiconductor Corp. (NYSE: MX)

Snapshot:

Magnachip Semiconductor designs and manufactures analog and mixed-signal semiconductor platform solutions for communications and internet of things, consumer, industrial, and automotive applications. The company’s product portfolio consists of large display solutions, mobile display solutions, sensor solutions, LED solutions, mobile solutions, and power conversions.

Updates:

There are no updates this month from Magnachip Semiconductor. Look for the company to release its next earnings report on October 29, 2021.

Magnachip Semiconductor Corp. (NYSE: MX) is a “Hold.” The risk level is “High.”

NVE Corp. (NASDAQ: NVEC)

Snapshot:

NVE Corp. develops and sells devices that utilize spintronics, a nanotechnology that focuses on the spin of the electron. The company creates high-performance spintronic products, which include sensors and couplers that are used to acquire and transmit data.

Updates:

Shares of NVE have slid quite a bit since hitting a fresh 52-week high in late July. Despite the lack of news out of the company, we’ll have a better idea of the company’s recent performance after it releases its next quarterly report on October 21, 2021.

We rate NVE Corp. (NASDAQ: NVEC) a “Buy” under $95. The risk level is “Medium.”

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Rockwell Automation Inc. (NYSE: ROK)

Snapshot:

Rockwell Automation is an American provider of industrial automation solutions and equipment, which includes various power, control, and information systems that fall under two segments: architecture and software, and control products and solutions. Headquartered in Milwaukee, Wisconsin, Rockwell is a Fortune 500 company that employs over 22,000 people and serves customers in over 80 countries. Its top brands include Allen-Bradley and Rockwell Software.

Updates:

Our issue last month broke down how Rockwell made a smart move by acquiring Plex systems, gaining control of its one-of-a-kind software and branching into a cloud market.

Well, this month the company did it again. This time, through a partnership with Ansys and its Studio 5000 Simulation Interface, Rockwell is dipping its toe into one of the most interesting pieces of technology we’ve seen in a while: digital twins.

A digital twin is a software model that perfectly mimics a real-world design, whether it be a machine, product design, or even an entire building. Designers use these detailed blueprints to save thousands of man-hours on any number of different projects.

Rockwell is showing how versatile its technology can be. Every new application means another market that the company can easily pivot into.

Rockwell Automation Inc. (NYSE: ROK) is now rated a “Buy” under $280. The risk level is “Medium.”

Teradyne Inc. (NASDAQ: TER)

Snapshot:

Teradyne has historically been a developer and supplier of automatic test equipment (ATE), but it recently purchased a company by the name of Universal Robots (UR), the world leader in customizable, collaborative robots.

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With an intuitive interface (no programming experience needed) and an estimated return on investment of just three–eight months, UR robots are an easy decision for U.S. factories that seek to gain an edge. UR robots can automate virtually anything, from assembly to painting and labeling to injection molding.

Teradyne offers a full line of robotics solutions with its UR3, UR5, and UR10 robotic arms. The robots are easy to program and set up and are flexible for redeployment. High-profile customers include Samsung, Qualcomm, Intel, Analog Devices, Texas Instruments, and IBM.

Updates:

Teradyne has been silent since our coverage last month. But the robotics market itself is in for a serious shake-up in the near future. You might have already seen why.

In case you’ve missed the relentless advertising, Amazon just broke news of its latest product: a small robot named Astro that meanders around your home, like an Alexa on wheels. It hosts features like home monitoring and security, voice response, and smart home integration.

What it really is, though, is the world’s latest and greatest attempt at home robotics. Tesla made headlines recently for its bizarre manual labor robot, but Astro will cater to a different crowd altogether.

Regardless of Astro’s success, this is the start of a totally different robot market. Like robot vacuums, they will quickly go from a novelty to a household necessity if the concept takes off.

We rate Teradyne Inc. (NASDAQ: TER) a “Buy” under $125. The risk level is “Medium.”

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Unity Biotechnology Inc. (NASDAQ: UBX)

Snapshot:

Founded in 2011 and based in South San Francisco, California, Unity Biotechnology is a biotech startup focused on targeted therapies that treat common joint and eye diseases by slowing the aging process at the cellular level. The firm holds 13 patents and is working on three drugs: an arthritis drug candidate called UBX0101 and two ophthalmologic drug candidates called UBX1967 and UBX1325. It has garnered large investments from Jeff Bezos, Peter Thiel, the Rockefeller Family, BlackRock, Renaissance Technologies, and Goldman Sachs.

Updates:

After months of anxious waiting, Unity Biotechnology just offered a teasing glimpse into its latest trial data for UBX1325. The company didn’t offer much, but it at least confirmed that patients were showing “evidence of improvement in vision and retinal structure… sustained through 12 weeks.”

Previously, patients with diabetic macular edema and wet age-related macular degeneration had very few care options. If the 12-week trial is successful and the drug enters the market, it would become the instant standard of care for future patients.

The full 24-week study will conclude before the end of 2021. We will keep you informed of any updates as soon as they emerge.

We rate Unity Biotechnology Inc. (NASDAQ: UBX) a “Hold.” The risk level is “High.”

Velodyne Lidar (NASDAQ: VLDR)

Snapshot:

Velodyne Lidar offers its customers sensor technologies for autonomous vehicles, as well as LIDAR solutions for driver assistance, delivery solutions, robotics, autonomous vehicles, navigation, and mapping. The company’s portfolio includes surround sensors, directional sensors, close-range sensors, and other related software.

October 2021 Issue

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Updates:

Now that LIDAR technology is making its way into everything from iPhones to robot vacuums, Velodyne is racking up bigger and bigger contracts.

First up, AGM Systems has elected to use Velodyne’s pride and joy, its flagship Alpha Prime LIDAR unit, for a series of upcoming unmanned aerial vehicles (UAVs). No details have been made public, but the unit is more than capable of handling a huge array of typical drone-related tasks like 3D mapping and scanning.

More recently, Velodyne announced an even bigger multiyear partnership with TOPODRONE, a company specializing in agricultural landscape mapping. Velodyne’s sensors are finally durable and lightweight enough to work effectively on drones, where every extra ounce shortens flight time.

Velodyne’s new foray into UAVs has sent stock prices on a modest climb. Like self-driving cars, drones are still a young technology that has yet to realize its full potential. With Velodyne’s help, a few of the key obstacles in the way of autonomous drone delivery could be solved.

Velodyne Lidar (NASDAQ: VLDR) is now rated a “Buy” under $17.50. The risk level is “Medium-High.”

Until next time,

Keith KohlTechnology and Opportunity

Technology and Opportunity © Angel Publishing 2021, 3 E Read Street, Baltimore, MD 21202. All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Technology and Opportunity and Angel Publishing do not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law.

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