Smartwatches Make Me Want To Buy ARM Holdings plc

The release of Samsung’s smartwatch makes me bullish about ARM Holdings plc (LON: ARM).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

I’ve always been a fan of watches, and the recent release of a smartwatch by Samsung has made me rather intrigued.

It acts as a ‘companion’ to a Samsung smartphone, and allows users to check emails, read texts, take pictures with its camera and also listen to music. It will go on sale across the world priced at $299.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Of course, the inevitable question is: why bother getting one? As far as I can see, it performs exactly the same functions as a smartphone but on a more limited basis, leading me to also ask why not just keep your smartphone in your pocket and use that?

However, just as other technology products have initially seemed to be of limited use, the smartwatch may yet find its customer base. For instance, gym-goers and sports players may find it useful for assessing their performance, while listening to music from a watch rather than a phone may prove to be less cumbersome.

Anyway, it will be fascinating to see how it performs and, as a private investor, I’m interested to know how I can potentially benefit from further releases in the ‘wearable technology’ sector.

One company that could be a means for me to benefit is ARM (LSE: ARM) (NASDAQ: ARMH.US). With Apple mulling over the release of its own smartwatch, ARM could be poised to develop the technology to push it onto another level, just as it has done with the iPhone and various other technology products.

Indeed, the UK-based technology company is a world-leading semiconductor intellectual property supplier, focusing on the design and licensing of intellectual property rather than the manufacture of physical semiconductor chips.

This, in my view, makes the business even more valuable and explains why ARM remains successful: it has an ability to set the pace and drive change in the technology space, achieving sky-high margins and being an integral player in much of the technology we use on a day-to-day basis.

Certainly, focusing on the price-to-earnings (P/E) ratio would lead investors to conclude that shares are expensive, with them currently trading on a P/E ratio of 64. However, when earnings growth forecasts of 40% this year and 23% next year are taken into account, ARM does not look so expensive, with the company having a price-to-earnings growth (PEG) ratio of just over 2.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

> Peter does not own shares in ARM. The Motley Fool owns shares in Apple.

More on Investing Articles

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

This cheap share fell 30% last week. I’d buy now

This huge US corporation saw its shares crash by 30% last week. But I'd buy this surprisingly cheap share now…

Read more »

Various denominations of notes in a pile
Investing Articles

These 7 shares produce passive income of 7% to 11% a year!

Passive income is extra money I make without working. By buying these seven shares, I could earn 8.9% a year…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

6.6%+ dividend yields! 2 FTSE 100 dividend stocks to buy

Finding the best dividend stocks to buy requires extra care today as soaring inflation takes a bite out of shareholder…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

At 85p, are Rolls-Royce shares a slam-dunk buy?

The Rolls-Royce share price is in penny stock territory. Roland Head explains why he thinks this FTSE 100 stalwart looks…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

‘Big Short’ investor Michael Burry is buying this quality growth stock! Should I?

In the first quarter, Michael Burry bought more of this growth stock. Is this a hint that I should also…

Read more »

A beach at sunset where there is an inscription on the sand "Breathe Deeeply".
Investing Articles

Stock market crash: here’s why falling prices is good news

Over in the US, a stock market crash is battering high-priced stocks. But I see falling shares as an opportunity…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

These 5 FTSE 100 shares crashed in 2022. I’d buy 1 today

Although the FTSE 100 index is flat in 2022, some Footsie shares have crashed hard this year. But I see…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How investors can boost their passive income when the FTSE is falling

Stock markets are plagued with fears right now. Here's why I firmly believe those fears improve our passive income prospects.

Read more »