“The Hottest Investment Opportunities for 2014”

Looking at some teased predictions for next year's top performers from Andy Obermueller

By Travis Johnson, Stock Gumshoe, July 18, 2013

Irregulars Quick Take Paid members get a quick summary of the stocks teased and our thoughts here. Join as a Stock Gumshoe Irregular today (already a member? Log in)

Andy Obermueller writes the Game-Changing Stocks newsletter for StreetAuthority, which is either new or renamed as far as I can tell (it looks like it might have replaced his Government-Driven Investing), and he’s been teasing us with a spiel about the hottest investment opportunities for next year — hoping to get on early, I guess, as the prognostications begin to pile in this Fall about the top picks for 2014.

The special report he’s peddling is called “The Hottest Investment Opportunities for 2014” and, as is typical for these kinds of “special reports” it’s “Free!” … though, it appears, that means “free if you try a subscription to his newsletter.”

And, also typical of the genre, he gives away the name and ticker of one or two names at the top of the ad to get our juices flowing — this time the free pick is SodaStream (SODA), which has been one of the better-performing stocks this year but has come down from the highs over the last month. He also pitches a penny stock that makes the sweeteners SodaStream needs, but doesn’t really provide any clues — he could be teasing one of the Stevia stocks, but those are pretty much all penny-stock-promotion junk. The sweetener SodaStream actually uses in their core syrups is Splenda, which is owned by giant companies and doesn’t move their needle much (that’s Tate & Lyle and Johnson & Johnson).

And he also pitches the “freely revealed” stock Nuance Communications (NUAN) as his play for the “death of the keyboard” as voice recognition continues to become a major trend in human-computer interaction — NUAN has been teased many times as well, of course, and it’s not one that’s ever been super-appealing to me, but they’re certainly the major player in voice recognition.

So let’s move on to some of the other stocks he teases — first is the enabler of the “Apple Bank” …

“I predict that within the next 12 months, Apple will create a new currency called iCash and become the largest bank in America.

“The company is already quietly moving in this direction. It recently acquired biometrics security firm AuthenTec (Nasdaq: AUTH). Why? Because the single most important part of the mobile payments revolution is security. It wanted to have sole access to the best technology….

“I believe that it has the best shot of creating the “It” product when it comes to mobile payments.

“That’s not to say that Apple doesn’t face stiff competition.

“For instance, Wal-Mart, Target, 7-Eleven, Publix Supermarkets and a handful of other major retailers announced that they are working to develop their own mobile payments system, according to The Wall Street Journal.

“And other cell phone companies, like Google and Vodafone, are also vying for dominance in this space.

“Fortunately, there’s a simple way for you to profit from this sea change with or without Apple being the winner.

“It’s with a company that has a unique role in this game: It makes the various electronic components, including chips that make mobile payments possible. It has relationships with all of the major smartphone manufacturers, including Apple.

“It’s a $6 billion company, which would be nothing for Apple or Google to buy, considering their cash hoards.”

Well, I’m afraid I say “phooey” to the idea that Apple will be creating a NFC payment network that generates any meaningful returns for them next year — but it’s possible. I also think it’s unlikely that Apple will be buying a maker of mobile payment chips that use near field communications (NFC) — the technology that most people are looking for to continue to revolutionize the “pay by cell phone” trend. But again, possible.

Apple has an extremely powerful mobile payments position because they have more credit cards on file than anyone else, even Amazon, thanks to the iTunes store, but that doesn’t necessarily translate well into becoming an NFC payments power and letting you make your purchase at McDonald’s or Starbucks by waving your phone at the counter.

Presuming that NFC does continue to develop and grow (as has been promised for over a decade now, so be careful what you expect as far as timing), which chip stock is Obermueller touting?

Well, at a $6 billion market cap the pickings are fairly slim — the best candidates I’m aware of who have been near $6 billion in recent months are probably Infineon Technologies (IFNNY), NXP Semiconductors (NXPI), or STMicroelectronics (STM). ALL of which had market caps of about $6 billion back in April and May before they moved up, almost in unison, to 25-30% or so gains from there, so that could fit if he was putting his research together several weeks ago. They’re all very well-established with ties to most of the important companies in mobile, they all have significant NFC chip businesses.

If I were to pick one of them as being most levered and best-positioned for NFC without being overly reliant on one customer it would probably be NXPI, but I’m not an expert on that sector and I don’t own or follow any of these closely. Much larger players like Broadcom (BCOM) and Qualcomm (QCOM) are also in the NFC space so there’s certainly no one winner you can pin a flag on and guarantee you’ll profit as (or if) mobile NFC payments become more important.

And interestingly, Andy Obermueller also touts uranium as one of the big “surprise” stories of the next year — something we’ve heard before. And while it hasn’t been a teaser topic much of late, I have seen many other pundits quietly indicating their interest in uranium miners this year … really, one of the few mining sectors that’s getting some positive mention of late.

The reason for that is the end of the uranium recycling deal with Russia — the possible end of the supply that the world’s electricity generators have enjoyed as warheads were turned into fuel for power plants. That treaty ends at the end of this year, so it’s always possible that there will be similar disarmament deals made (though unlikely, I’d think), or that new technologies and more recycling of spent fuel will cut demand for uranium below what is expected … but most people believe the price is likely to increase by at least a bit as the supply dwindles and demand continues to climb with new reactors built, particularly in Asia.

So what does Obermueller say?

“Your best bet to profit is with the only uranium miner in the world that has a chance of ramping up production fast enough to satisfy the coming wave of demand. This single firm produced almost 20% of the world’s uranium mined last year. What’s more, it’s sitting on 65% of the world’s known uranium supply.

“It owns a high-grade mother lode that boasts the richest uranium ore body on the planet — with concentrations 100 times stronger than average.

“The site is so fertile that the ore has to be blended with waste rock just to make it safe to handle. That ultra-high ore grade is a major advantage. Extraction costs are so low they could turn a profit even if prices drop in half.

“Uranium now costs around $40 to $50 per pound. If it jumps by $30 a pound, which could happen fast once the Russian supply dries up, it could add hundreds of millions of dollars to this company’s bottom line. This stock would almost have to soar.”

Well, as you might expect this would really have to be Cameco (CCJ), the standard-bearer for large public uranium stocks — they have two of the largest and highest-grade uranium mines in the world in McArthur River and the soon to be fully operational Cigar Lake, and they’re profitable. This is a big company, with an $8 billion market cap, but it pretty much is the tradeable uranium market — there are smaller uranium companies like Denison (DNN) or Uranium One (UUU.TO or SXRZF) or Paladin Energy (PDN.TO), and active uranium operations at several other large miners like Rio Tinto (RIO), but they all pale in comparison to Cameco when it comes to size and the capacity to mill and produce uranium — and to produce an increasing amount of it, if needed.

For many years CCJ has been the investable way to get uranium exposure — the way that Newmont was the way to get copper exposure in the days before ETFs and futures made commodity exposure simple (there are ETFs for uranium producers, most of which have at least a 20% weighting in Cameco shares, but no real futures market — most uranium is sold on long-term contracts and is, as you would imagine, highly regulated, though the contracts often do adjust for pricing of the “spot” market). You can always check out those more diversified ETFs, particularly if you’re still feeling skittish about Cameco because of their past troubles in getting the Cigar Lake mine built (flooding, etc.) you could always go with another strong producer like Uranium One or with one of the ETFs — probably the most direct play on uranium miners in ETF form is the Global X Uranium ETF (URA).

If you don’t remember the Cigar Lake troubles, the mine actually started construction eight years ago — they had a catastrophic water inflow that shut them down for a long time, then more water troubles, and they only last month got permitted to start production, which is probably happening right now. CCJ has substantially outperformed the Uranium index over the last year or so, which is understandable given that it’s the big, established and profitable player — little explorers have no hope of love from investors in this environment.

Cameco’s mines are very long-lived, very high grade, in Canada and the US for the most part, and probably at least as safe as any other uranium stock — though that may not mean much given the very volatile nature of uranium prices over the past ten years. Of course, it’s also not cheap and it may not double as fast as some of the jumpy little stocks if we do see a spiking uranium market next year as many folks expect … but if you’re looking for uranium than Cameco should be the obvious first stop for your research.

And if you’re curious about the general state of the uranium market, there’s a very good and (it seems to me) pretty balanced look here from the World Nuclear Association about the current state of uranium production and demand, and about the future demand/supply curve — it also indicates that we’re probably going to see pricing improve with demand and sluggish supply, but it’s not a guarantee given the large number of old reactors, the substantial mining capacity that is coming online, and the potential for more recycling, better re-refining of spent fuel, or more warhead dismantling.

And that’s all we’ve got time for today — if any of Obermueller’s other “best ideas for 2014” look interesting as I dig through I’ll share those answers with you in a future note. If you’ve got a fave of the picks above, or your own top stock for 2014 to suggest, feel free to shout it out with a comment below. Thanks!

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Share Your Thoughts

ShowHide Comments (39)
    1. Dusty
      Jul 18 2013, 04:58:18 pm

      All this about uranium, known disposal problems with spent uranium and associated radioactive materials and equipment after the uranium is ‘spent,’ whatever happened to the promise and hype about Thorium?

      Supposedly there is a Thorium reactor in use in Alaska providing the electric power for a town. Supposedly Thorium is much, much safer to use and easier to extract from source ores and source locations.

      Why did Thorium sourced electric power vanish from the radar and everything else?

      • David A
        Nov 15 2014, 05:09:51 pm

        CCJ is the Exxon of Uranium! The recent pull back has been an outstanding opportunity to buy shares. As a general rule of thumb, any day that I can get CCJ at $18 or under, is a BUY day for me! Its a matter of WHEN and NOT “if” the Uranium sector explodes. The challenge with buying Thorium, is that the world’s existing reactors do not use Thorium. And because it takes 8-10 years for a new reactor to come online from ground break to start up- forget it.

    2. Richard Hewitt
      Jul 18 2013, 05:29:42 pm

      Travis, your take in the Irregulars Quick Take makes no mention of Nuance. You seem to indicate you have never taken an interest but that they are leaders in voice recognition. Is that worth adding?

    3. s h
      Jul 18 2013, 08:57:13 pm

      Nuance is one of Kurweil’s companies and he was rather aggressive to promote its merits during a few stage appearances surrounding his recent book launch.

      Voice control has long been the holy grail of Human Computer Interface (HCI) but the recognition pattern issues due to the intonations and local slangs has been a challenge scientists have not yet overcome on a commercial basis. My own experience with the Dragon software over the years has been frustrating and always fueled by hope – writing my term papers from the beach, recording meeting minutes real-time, drafting proposals while chaperon to unruly kids, etc. And all these years I have been disappointed. But still a hopeful fan.

      In terms of transcription which is the hardest step in voice HCI the process, the services still require an element of human recognition. Most commercial transcription service companies are built on a large freelance group as effective conversion depends much on having the domain knowledge. Little has changed since the use of secretarial pools a century ago. For the experience you can even join a number of these smaller companies as a freelance transcriber for a block of hours.

      Advances in HCI are being made in the myo-sensing, Line-of-Sight and 3D manipulation. An alternative interesting development is from Disney called Botanicus Interactus where the plant on your desk can be used replace the computer mouse. Maybe we will soon see Mickey Mouse Fantasia part 2: the interactive submerged experience?

      With so many different paths it is not clear where and how we will end up interacting with computers in 10 or 20 year time. This is not a risk profile for me and have watched but not invested.

      My 2 cents on a Friday 😉

      • john
        Jul 18 2013, 09:42:31 pm

        Interesting theory about Nuance. Your post about outside noise causing issues with real time transcribing got me thinking. There was, maybe still is but I believed they were bought out, a company local to me named Clarity LLC. one of technologies they developed was a noise cancelling microphone. Supposedly, a race car driver could speak in a normal tone and the technology would cancel out the engine noise. Kind of important when you need to communicate with the team in the pit. Would be interesting if Nuance could incorporate this into their software.

        OK, way off topic, sorry.

    4. blackjack
      Jul 19 2013, 03:16:37 am

      NFC – i think you just need to follow the market leader in smartphones = Samsung and you can see what chip they use and then follow that stock.

    5. dennis
      Jul 19 2013, 03:54:07 am

      I like Dennison,dnn.own the stock and going to buy more. Demand and price will go up.Keep an eye open.Dnn has been going up lately. Dr.Kent Moors is raving about $20 trillion oil in Arckaringa Basin Australia.correct my spelling please. He said the Oil Company that may get the biggest contract is already working in other sections of Australia and has very good relations with them. DR. said we could start to see profits within a year and is long term investment. Hoping for some info. Thanks

    6. dennis
      Jul 19 2013, 04:14:43 am

      Dean I bought Dnn about 4 or 5 yrs ago and it shot up to 6 bucks in about 3 wks. They could be bought out but I think there looking to build there bus. . Uranium will used for a long time all over most of the world. Do your homework. I think its a great investment. More bang for your buck. Good Luck!

    7. Stuart Glassman
      Jul 19 2013, 09:39:25 am

      Nuance is the leader in voice recognition among many players. I’ve used it for five years and it’s pretty good and getting better(about 98% accurate now). Customer service has always been suboptimal. A very good microphone is critical in better results. Re: the stock, they are the leader in this field and probably will continue to be so. The better they get the more units they’ll sell. If they were a customer friendly company that would help also.

    8. epstamplecowsky
      Jul 19 2013, 11:27:43 am


    9. CRF
      Jul 19 2013, 12:01:16 pm

      Our radiology department recently switched to a medical/scientific version of Nuance from another voice recognition system, probably to save money. When we had live transcriptionists, I was told my dictations were the best in the department. Nuance is awful. I, and others, have literaly thrown the microphones against the wall in frustration. Three sylable words get split into two nonsensical words, the context of two, to, and too is misunderstood. If I owned the stock, I would sell it just to have less contact with the company.

    10. 67 |
      Brad Kirsch
      Jul 19 2013, 12:27:52 pm

      Travis I’m confused. The uranium article that you referenced — the very bottom graph that shows use vs. production of U308. Now I know the Megatons to Megawatts is ending this year provides 24 million lbs of U308 yearly and the article stated that other secondary sources have been used but are mostly used up. The graph shows a secondary source of 20+ million lbs from 2010 – 2014. Then from 2014 thru 2030 it just continues to be 20+ million Lbs!!! Where is this material coming From! It appears to me that they just assume that its been that way for the past 20 years and it will just continue to be that way – but its not. That’s the crux of the uranium bullish case, How is this amount to be made up. It will take time for the excess uranium to be shaken out of the system, but after that there almost must be a shortfall. But I’m just an old country boy and maybe I missed something.

    11. dennis
      Jul 21 2013, 12:37:35 am

      Hey Blackjack, Thanks for the tip. What do you think about linc,tag tao.if and nzerf? I would like to have your opinion. Thanks Again

    12. dennis
      Jul 22 2013, 02:59:30 am

      Great info BJ There’s an article on rare elements that includes Moly corp MCP.. It’s about rare elements being found in gold mining waste. I guess we’ll have to wait and see the outcome.Thanks Again

    13. blackjack
      Jul 23 2013, 01:22:10 am

      rare earths aren’t rare at all
      its the refining of the ore thats expensive
      have a look at Lynas history
      and its still not up and running!!!!!
      but soon

    14. marjorie
      Aug 9 2013, 11:50:18 pm

      The next fuel for cars and trucks is hydrogen, not natural gas. I know this because
      some of the companies already have hydrogen using engines in prototype cars and
      there is a hydrogen station for waste management trucks in Orange County, Ca.

      My son who works in management for an auto company is driving a hydrogen powered
      car all the time.
      Have not seen any stocks related to this development. Let me know if you find any.

    15. Eric
      Aug 11 2013, 02:22:36 am

      Hydrogen is not a viable fuel at this time for one simple reason…it takes more energy to produce hydrogen than you get in return by burning it. Consider that when you burn hydrogen, you get energy plus water. Water has lots of hydrogen, but it’s in the lowest energy state, having already emitted the energy. You have to add energy back in to split off hydrogen and oxygen from the water “exhaust” to raise the energy level again. The same is true for other sources of hydrogen, including chemical decomposition. I’d love to see hydrogen cars, but there ain’t no such thing as free hydrogen yet.

    16. floyd falter
      Sep 7 2013, 01:32:10 pm

      Uranium? The Russian nuke conversion to fuel damaged the price of Uranium. Obama
      has already said he’ll reduce our nuclear stock pile. Will not these weapons be recycled
      just as the Russians were?

    17. Harold
      Sep 8 2013, 05:42:15 am

      I really don’t know how you guys figure these lies out
      Ya get one after another. Pretty soon it’ll be “Oh No.
      We’re not going to export gas, well keep it for ourselves.”
      How can you read this guy? The Ma Man!

    18. herach
      Sep 9 2013, 07:42:28 am

      Dennis, the Chinese water purifying company.
      I recently bought a modest stake in TRIT at 1.18.
      It is now at 1.50. As all Chinese companies, this is strictly dependent on the graces of the
      government. especially those companies with government contracts.
      The need for this technology is apparent. The results appear to meet the claims.
      The greatest factor in its success seems to be the political approval.
      This could be a long term winner, barring “regulatory” interference.
      You now have a name, do your DD and Bon Chance.

    19. Jose
      Oct 23 2013, 11:54:39 pm

      Its been great reading all the coments and opinions.
      I have a question though I’ve been seeing a large number of people now using e-cigs.
      is this a new thing that might be big in the future? I would love to get some incite in this if anyone knows anything.

    20. giovanni chiabrando
      Nov 21 2013, 01:35:36 pm

      in the last issue of Outsider Club Nick Hodges is presenting the story of the M2M program end with dramatic tones (lot of US cities in the dark and so on) and is speaking about a new very promising site in Canada called Athabasca Basin, and about one little Company that owns the northern part of it. It would be very interesting to know more about this company (stock today around 30c)
      Thanks to anybody that can shed some light

      • Eddy Li
        Dec 10 2013, 02:28:12 am

        Have a look at Zadar ventures ltd (ZAD.VN) trading now at $0.31.
        It looks like it but not quite sure! I need confirmation from others.

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