Smart homes and buildings are becoming increasingly popular with a projected market growth of 18% according to Acumen Researching and Consulting. The internet of things, and IFTTT (If this then that) has allowed for individuals to create systems that works together with minimal human intervention.
Automation and connected smart appliances have seen a huge rise in demand in recent years. Amazon recently acquired Eero and previously paid $1 billion to acquire Ring, a doorbell-camera startup. It had acquired Blink, a smart camera maker in 2017.
Google also invested heavily in the smart-home game a few years ago when it acquired Nest for 3.2 billion. Nest was quiet for a few years after its acquisition by Google but recently launched new temperature sensors, a video doorbell and an outdoor smart camera.
Smart lights, security, entertainment systems, and temperature control are the principle smart devices in demand. These products are surely to grow as we become more invested in energy-saving and healthy lifestyles.
Most of these smart devices work with voice assistants, but read carefully as not all are compatible, depending on your brand. Apple’s Homekit is an example of a software framework that lets you use a smart device with Siri.
Nest smart-home products at B&H
Here are the top companies developing smart homes products…
Displaced Oracle in the cloud as the database of choice. It's about selling cloud services, like a utility. Margins are much higher on cloud than selling software. Over time, margins and free cashflow will go up. Not concerned about the valuation, because of growing business and margins.
Sony Corp. ADR (SNE-N)
They offer a suite of voice assistant enabled smart products that help automate the home. You can even control your Sony TV through Google Home.
Covid crisis has boosted gaming. Well run, well established, blue chip. Pretty solid name. She owns MSFT instead, as it also benefits from cloud-based usage.
Homekit, along with the Home app, is the company’s smart home system used as a platform for iOS user. The platform brings multiple devices together and coordinates their actions.
A leader in e-commerce and they sell smart home solutions that also works with their voice assistant, Alexa. They help you get what you need to turn your home smart, and a way to control everything.
It's picked up and retained new customers during the pandemic. Also, Friday its unionization drive in Alabama failed.
Alphabet Inc. (A) (GOOGL-Q)
They acquired Nest and is a big player in connected home devices. Many devices connect through their Google Home platform.
(A Top Pick Aug 06/20, Up 49%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with GM is progressing well. We recommend trailing up the stop (from $1800) to $2000. This would all but guarantee a minimum return on investment of 33%.
Some stocks not on Stockchase are also worth mentioning : Alarm.com NASDAQ: ALRM, Control4 NASDAQ: CTRL and Sonos NASDAQ: SONO are among many smart-home stocks you should watch. Other companies are also involved and benefit from the home automation rise in demand even if they don’t develop consumer products themselves, here are more smart-home related stocks :
Canon Inc. (CAJ-N)
Smart all-in-one printers are the mainstay of a smart-office. Canon offers multiple solutions for big and small sized companies and help automate the workplace.
Unfortunately they have had a tough time. Camera division is doing extremely well. Coming out with new cameras. He is scrutinizing it hard. 4.2% dividend is safe. Strong balance sheet. If camera division takes a turn to the worse he would sell.
A supplier of billing and back-office support for telecommunication and cable companies. They offer real-time intelligence capabilities for contextualized customer engagement.
One theme she really likes is a company that provides products and services that other companies simply can't live without. This company is so ingrained with other businesses processes. They work with AT&T, BCE, Telus, Rogers and Vodafone. Do back-end billing, making sure you are getting charged what you are supposed to be charged for…
Logitech International SA (LOGI-Q)
Harmony Hub takes all your devices and lets you control them with your smartphone. They are working on creating a universal controller.
They've thrived during Covid. Last night, they reported a great quarter with sales up 85%, beating EPS easily (more than doubled the street), and raised their full-year forecast. And yet, shares fell $3 today as investors fear that their business will cool down as society recovers. He disagrees.
Marvell Technology Group (MRVL-Q)
They produce storage, communications, and consumer semiconductors. Their digital semiconductors for consumer communications is used in smart home technology.
It's the ultimate 5G play, and they delivered a great quarter. He owns a lot of this, and he bought on recent weakness.
Silicon Laboratories Inc (SLAB-Q)
A semiconductor producer that is used widely in cell-phones and smart devices.
(A Top Pick Jan 26/05. Down 36%.) Face the opportunity for single chip cell phone technology to penetrate the low end of the market. Went up 30% and he sold. Looking at it again.
They create chips that power the smart home devices. They have good technical support, and could break out, but semiconductors have done poorly recently.
They report Thursday. It's now led by a new CEO who's doing a terrific job inspiring people inside and outside the company. If the stock falls, buy. The CEO can turn the company around on a dime, but will turn it.
A strong player in the IoT space, offering connectivity and machine intelligence to smart home technology. They offer security and automation technology to consumers.
With the worldwide shortage, likes that there's a big impetus to own semiconductor stocks. QCOM is not his top choice. He'd rather look at TSM or NVDA, with higher growth profiles.
They’re focusing on home security and automation systems to protect your home and family.
AMERICA MOVIL, S.A.B. DE C.V. (AMX-N)
They are working on 5G technology and are working to commercialise smart products to tap into the IoT universe.
(A Top Pick June 5/07. Down 8%.) Largest cellular company in Mexico. Their capacity utilization of the network is superior to many other global ones. Very Bullish on this stock.
Home Depot (HD-N)
You can get everything you need to connect your home. They’ve profited from the DIY boom and smart homes could be the next big thing.
It's still worth buying home improvement stocks like this despite a big run-up. People will continue to spend on their homes, seeing it as an investment, not as an expense. In any home boom, like now, people spend on home improvement. Also, we're entering gardening season.
Best Buy Company Inc (BBY-N)
A name synonymous with consumer technology. They offer a wide variety of smart homes devices, and smart home systems.
Allan Tong’s Discover Picks Best Buy is trading only $6 lower than its average price target of $116. Even though the wind is at its back, it’s likely wise to wait for a pullback before entering or adding more. Existing shareholders have been rewarded with a 74.56% total one-year return at a 3.53% profit margin…
Office Depot (ODP-Q)
They offer a smart home and office installation service that installs and connects Google and Nest products to you building.
Has been outperformed by Staples. Global. Good balance sheet. Good cash flow. New management coming in.
Audiovox Corp. (VOXX-Q)
A custom home automation and consumer electronics company. They are working on connecting residential and commercial properties.
No debt and $160 million in cash, a little over $7 per share. Chairman owns 20%. Not widely followed.
Comcast Corp (CMCSA-Q)
Its Xfinity brand has driven their smart home products. They specialize in smart voice-drive TV experiences. They also have partnerships with home security and smart lock companies.
ABB Ltd. (ABB-N)
A Swedish-Swiss multinational that develops robotics, power, and automation technology. They are working on building smart grids. These grids are adaptive and responsive, and many current infrastructure needs replacing. These smart grids have a big potential when these infrastructures are redone.
Are they connected enough to green? They focus on smart grids, building grids that connect renewable projects. Now is an interesting time for grid development. Many, like Ontario's, are ancient and need updating. ABB is a play on smart (adaptive, responsive) grids, which are really expensive. If there's more infrastructure spending to update the grid…
Honeywell International (HON-N)
They have consumer smart home solutions, including thermostats, and security systems. It has a good management team and they have good branding.
They report Friday. Great CEO. They're becoming building services play and fine healthcare company. He expects their numbers to go higher still.
General Electric (GE-N)
They have smart outlets and security systems. However, it’s been beaten down a lot, and analysts are wary. They are not cash flow positive, and the business is trying to sell off assets trying to survive.
(A Top Pick Oct 20/20, Up 82.7%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with GE is progressing well. We recommend trailing up the stop (from $8.00) to $11.50. This would all but guarantee a minimum return on investment of 46%, including the previous recommendation to cover 50% of the position.
Johnson Controls (JCI-N)
An automotive batteries and electronics, and HVAC equipment producer. They also have their building automation system. The system helps keep occupants safe and productive.
(Top Pick Feb 6/17, Down 2%) He expects that it will probably get back to $42-$45. Typically auto does well until the end of May.
Eaton Corp. (ETN-N)
Provides engineering equipment to different companies. They are a key player in the global human machine interface (HMI) race. HMI is a growing market especially due to the rising demand for lower expenses.
They delivered a perfect quarter. They're doing a lot of the right things. Management has horse sense.
They manufacture electronic instruments and electromechanical devices. They make monitors for many industries, including pharma and oil. A leader in highly engineered electrical connectors.
Electronic equipment that makes monitors for many industries from pharma to oil. Established international company. ROIC rose from 14% in 2009 to 26% now. Stock is still cheap. $17B market cap. $3.8B in revenue. Consistent, well-diversified company.
Anixter International (AXE-N)
A communications and security products company. They offer a full-line solutions. A leader in helping businesses and communities build reliable systems.
(Top Pick Oct 4/13, Up 2.40%) It is core industrial America. Just made an acquisition that will be accretive right off the bat.