Thursday Night's Show Highlights:
NXP Semiconductors is profiting through secured elements and NFC! Consider NXPI!
Thursday, August 21, 2014
Note: Jim is on vacation on this week. No Lightning Round or other fresh stock picks. Thank you.
CHANGE NOTICE - Mon./Tues. now shown on Wednesday night's show.
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Jim: Doesn't it seem like you find these things (demonstrating how he uses his magnetic ID keycard to get into CNBC) everywhere? I've got to show my good-looking mug on this ID card every day to get to work. But apparently not everybody is on board.
You see, on Thursday, an analyst at Goldman Sachs came out with what I regard as a striking condemnation of NXP Semiconductors, NXPI, a company that makes both high-performance chips and standard commodity semiconductor components for all sorts of end markets, like these ID cards.
In response, NXPI's stock... it got slammed. Of course, it's Goldman Sachs. It was down as much as 5% intraday, and it closed off 2%.
I think this downgrade, where Goldman cut the stock's rating, from "neutral" to outright "sell," was a huge mistake. And tonight I want to explain why. Now he's (the Goldman Sachs analyst) doubling down on his negativity, and I think this could be a terrific buying opportunity in a stock that rarely gives you this kind of pullback. Thank you, to Goldman. First, you need to understand why this downgrade is wrong, and why NXP Semiconductors deserves to be bought, not sold. This Goldman analyst makes five claims, phrasing each in the form of a question. It's sort of Jeopardy-like. And I think all five arguments fundamentally misrepresent this company. Maybe when you hear his critique, you should play some Jeopardy... "Dumb Research for $100, anyone?" In short, this guy is negative, and he's wrong. The truth is, NXP Semi is riding a couple of big waves. There's the near-fiehld communications business I already mentioned, that I know you're intrigued by. You've got to go look into that. And the company's also a huge player in what's known as the "secured element" market. This is another business that they own. A secured element is a chip that keeps all of your information encrypted, so that only you can access it. And one of the fastest-growing segments here is the EMV chips... that's a standard that you're going to have to get to know... that you may have seen embedded on the front of your credit cards. These chips are a huge help in terms of fraud protection. They're already big in Europe, Canada, Asia and China. The government actually mandates that all credit cards have...