Top Smart-Home Stocks to Buy in 2019
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…
It has sold off with the market and is down 27-28% year-to-date. As a tech company it is more infra-structure and service focused than advertising like Google and Facebook. It is already embedded in millions of companies around the world and allows migration to the cloud.
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.
Q4 results topped expectations. Spiderman game and PlayStation doing well. Market leader in gaming consoles, 64% market share. 44% market share of sensors. Lots of horses in stable. 12-month average price target is $130. Yield is 0.60%. (Analysts’ price target is $145.56)
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 great opportunity. Don't often get a chance to buy on the cheap. Such a long runway to price target. Phenomenal moat. Extremely profitable. Still a high bar on innovation. High margins on services, about 67%. Yield is 0.69%. (Analysts’ price target is $184.42)
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.
He has owned this. You're buying this for its 5-10-year growth. Their retail business is getting more profitable though at a 3% margin; their cloud business is #1 at a 70% margin; and they're increasing advertising which has a 40-50% margin. Amazon Prime continues to grow and could raise prices. Can't say you will make…
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.
Prefers the L stock (no votes). Shares are off 22%. Revenue growth has slowed. Has $100 billion in free cash flow. They continue to dominate web search. They own Androids, which is half the phone market. They are #3 in cloud computing. He expects GOOG to return to previous highs in 18 months. (Analysts’ price…
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.
He just bought this midcap. A third of the Russell 2000 stocks are profitable and outgrowing the S&P; not subject to currency or tariff changes; they serve domestic markets. This is an infotech company that will serve sectors that will endure. It's a safe place to hide because they service domestically, are cash-flow positive and…
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 make wireless computer mouses, pointing devices, etc. They benefitted during COVID as did their profits, because people were staying home. A high quality business with good cash flow. They are looking to enter, but not sure at what level.
Marvell Technology Group (MRVL-Q)
They produce storage, communications, and consumer semiconductors. Their digital semiconductors for consumer communications is used in smart home technology.
The best in 5G and high-performance computing, which are out of favour now. He wants to buyback shares he has trimmed recently.
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.
New CEO is both an engineer and management operator, exactly what INTC needs. Product line breadth gives it a huge advantage. Added acquisitions every year for the last 5. Free cashflow machine, very profitable. Enviable gross margins by making most of its own chips. Leader in CPUs and autonomous vehicle chips. Price target is $56.
A strong player in the IoT space, offering connectivity and machine intelligence to smart home technology. They offer security and automation technology to consumers.
Top investing idea. John: Backlog. 12x earnings. Moving big into internet of things. Will benefit from a rotation back into growth. Buy and tuck away.
They’re focusing on home security and automation systems to protect your home and family.
It has disappointed shareholders. It tried to branch into the content business by buying large companies and then letting them go without much explanation. It also cut back its dividend. Verizon is higher quality.
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.
(A Top Pick Jun 16/21, Down 4%) Still owns it. Now below $300 you can add/buy. Home prices are rising over time and the home inventory is getting older. US homes are getting older, so need renovation. Also, HD has focused on their pro customer to easily buy online. Pros sales were strong last quarter.…
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.
AHY: Accidental high-yielding stocks that have fallen so far that their dividends now pay huge. He's gun-shy retail, and BB has plunged from $142 last November to $85 today. Pays a 4.16% yield. Their near-term numbers are less than ideal, but managers have announced positive guidance through more services. Trades at only 8x earnings, maybe…
Office Depot (ODP-Q)
They offer a smart home and office installation service that installs and connects Google and Nest products to you building.
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.
Valuation down to 11x earnings. He expects a strong quarter with good cash flow from their cable subscriptions.
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.
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.
With industrials, what's the macro in the future, like a recession in Q3 or Q4? It's fully valued now. $168.73 is his model price. A huge buy at $112, though.
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.
Las Vegas Syndrome happens when you hold onto a stock that's fallen, but would rather hold onto it, hoping for a rebound, instead of selling it. Will you be better off holding this or selling it in 10 years' time? GE remains a mess of low-growth, cyclical businesses. There are many other better businesses.
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.