“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

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?

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“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 th