| | Could this account for recent strength in Cypress?
forbes.com
FORBES
From The Chart Room
Nanotech: The Next Memory-Chip Giant Ben Berentson, 08.21.03, 9:00 AM ET
Tobin Smith, the editor of ChangeWave Investing, has an investment strategy that seeks to get out in front of new technologies that he thinks will change entire markets. His last pick, IMAX (nasdaq: IMAX - news - people ), was one of those stocks because the big-screen film company was beginning to feature new theatrical releases such as Matrix Reloaded. He recommended it at $7, buying into a rally that saw the stock climb to nearly $10.
Now Smith has his sights set on another industry: memory. His pick? NVE (nasdaq: NVEC - news - people ). NVE is developing a new kind of memory--MRAM--based on a technique it calls "spintronics." This nanotechnology-based technique uses an electron's spin rather than its charge. "This is a new kind of RAM," Smith says. "It's 100 times faster, 100 times denser and it's not volatile. That means that it's always on and you don't have to boot up anything." Smith notes that IBM (nyse: IBM - news - people ) and Infineon (nyse: IFX - news - people ) are working on the same project, but their chip is slated for a 2005 launch. Cypress Semiconductor (nyse: CY - news - people ), a partner of NVE, has a working model due out in the next six months. NVEC currently trades for around $19.50, having settled down from nearly $29 in mid-July. "This is a late-stage, venture-capital-type play, but it's now getting to the point where it's really moving," says Smith.
Technically, NVE is showing all of the signs Smith likes to see in his recommendations. The short-term 30-day moving average has moved up through the longer-term 50-day moving average. Says Smith: "It peaked out at that $28-to-$29 level and came right back down to its support at the 50-day [level]. NVE is also trading up on heavy volume and only pulling back on light volume." Smith is bullish on NVE's prospects despite its recent price dip: "The stock had gone from $6 to $28 in a matter of weeks, this drop just flushed out the weak sisters. If you know the MRAM story, this is the only way to play it." Smith thinks that in two or three years, NVE could be selling for $100 given the current market caps of other prominent IP holders such as Rambus (nasdaq: RMBS - news - people ) and that it should hit $30 by the end of the year. "The only way they could get beat is if someone outdoes them in MRAM or if someone gets around their intellectual property." |
|
