Constant connection to the internet, pulse and pace monitoring 24/7, pants that massage away your doughy thighs, shirts that wick away sweat, hugging jackets, and even undies that can thrill you via smartphone… not science fiction…already here or imminent and investible.
Kopin Corporation (NASDAQ:KOPN), a Boston based computer headset technology company, is opening a Wearable Tech Center in Silicon Valley and Chief Technology Officer Hong Choi told the Boston Herald wearable tech will be a $1.5 billion business by next year quadrupling by 2016. According to research company MarketsandMarkets wearable tech will grow by over 30% per year through 2018.
Five companies are at the forefront of wearable tech. Two are gimmes, Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) with a widely anticipated iWatch and Google Inc (NASDAQ:GOOG) Glass (also a possible Google smartwatch). Other companies that are tech fashion-forward are NIKE, Inc. (NYSE:NKE), Under Armour Inc (NYSE:UA), and VF Corp (NYSE:VFC).
Functional apparel
VF Corp (NYSE:VFC) is at the crossroads of two trends, wearable tech with their java infused jeans that purport to reduce cellulite and apparel personalization with its Vans sneakers.
VF Corp (NYSE:VFC) is a Dividend Aristocrat, alone among these fashion tech disrupters for reliably raising its dividend for 25 years or more. For investors that want value plus a stable yet growing yield VF Corp (NYSE:VFC) is the go-to name. The yield is 1.90% with an 18 trailing P/E.
NIKE, Inc. (NYSE:NKE), too, has personalizable shoes and “smart shoes” that give performance data thanks to pressure sensors and an accelerometer in their Nike+ sneaker line for basketball and other sports. Their Nike+ Fuelband is a wristband with accelerometer that syncs with an iPhone to track workout stats and allows users to compete against other Fuelband friends and even upload their stats to twitter and Facebook. And you thought cat photos were boring.
NIKE, Inc. (NYSE:NKE) is only up 13.22% over the last year and the yield is 1.30% with a forward P/E of 20.68. Compared to Under Armour Inc (NYSE:UA), which is up 24.14%, NIKE, Inc. (NYSE:NKE) is losing the momentum race. Under Armour Inc (NYSE:UA) is the pioneer in functional athletic wear with its moisture wicking clothes invented by CEO Kevin Plank. NIKE, Inc. (NYSE:NKE) also has similar functional apparel.
Under Armour Inc (NYSE:UA) also has the Under Armour Armour39, their fitness-monitoring device which measures everything the Fuelband does but also measures intensity, and unlike NIKE, Inc. (NYSE:NKE)’s, will be available on Android.
Under Armour Inc (NYSE:UA) is a more expensive stock going by the forward P/E of 34.40 but its PEG is lower at 2.10 reflecting analysts’ higher expected EPS growth rate of 20.83% over five years (yoy) compared to 10.97% for Nike. Lululemon Athletica inc. (NASDAQ:LULU) is also a big name in functional athletic apparel but its recent see-through yoga pants fracas leads me to give it a pass.
Wearable tech
The most interesting wearable tech is the remote control stimulation Fundawear by Durex owned by Reckitt Benckiser which runs on an iOS app on an iPhone. Basically underwear is fitted with the vibrating sensors used on smartphones and then controlled by a partner’s smartphone. “Bye, honey! Be careful on your business trip and make sure you charge your underwear!” The possibilities are mind-blowing but woe betide those whose phones get stolen!
Acccording to Bruce Tognazzini, who holds an intelligent wristwatch patent and was one of the original Apple Inc. (NASDAQ:AAPL) tech recruits, an iWatch could track down that phone for you and perform many James Bond tricks of yore. More prosaic tasks such as storing all your passwords and paying for all your purchases with a wave of your wrist could be on a new or later iteration of an iWatch.
An iWatch is not yet here but the patent applications are. CEO Tim Cook was coy at the All Things D D11 conference saying it was a very interesting market and his comments led to speculation there could be even more Apple Inc. (NASDAQ:AAPL) wearable tech beside a watch down the road. Analysts believe annual revenues from an iWatch could easily reach $10 billion depending on the price.
Apple Inc. (NASDAQ:AAPL) hasn’t received the Street sugar it used to but an iWatch could become as big a phenomenon as the iPhone. Tognazzini predicts an iWatch will get all the grousing and bashing the iPad did but as a lead-in component to the Apple Inc. (NASDAQ:AAPL) ecosystem will raise sales of iPhones as well as apps. Note, too that these other wearable techs all sync with Apple Inc. (NASDAQ:AAPL), both Nike and UnderArmour wristbands and the Fundawear.
Apple is the best fundamental value of all of these. It is the highest yielder at 2.70% with the lowest trailing or forward P/E at 10.58 and 10.10, respectively. It is also the worst stock performer of these, down 26% over the last year. Its PEG at .59 indicates serious undervaluation. The company has no debt and despite being taken to task on taxes, CEO Tim Cook handled the Congressional hearings admirably.
Google Inc (NASDAQ:GOOG) Glass has received its share of ridicule but just as many pundits think it’s undeniably cool. I just applied to try one after watching Google’s how it feels video. Google Inc (NASDAQ:GOOG), like Apple, has so much more to make it a buy, its growing dominance of cloud, its current dominance in search, its Android, tablets, and Google Inc (NASDAQ:GOOG) Fiber. Google Inc (NASDAQ:GOOG) has had a great year, up 47%. It has a forward P/E of 16.58 and with the pullback from $920 to $880 may be as good a time as any to get in.
At the end of the bionic day
Any one of these should bionically boost your portfolio. All will benefit from multi-year double digit demand for wearable tech…but Apple, Google, and Under Armour Inc (NYSE:UA) have the best growth prospects.
So doff your Google Glass, set your iWatch alarm, slough off your java jeans, toss the wick-sweated Under Armour shirt and Fundawear (hope they’re washable) into the hamper. Let those dogs breathe and slip off the Nike+ kicks. Don’t forget to get a good night hug from your self-hugging jacket.
Now you can sleep well knowing you bought the stocks behind these products, especially Apple. After being Bionic all day you’re tired…but it’s a good kind of tired.
The article Five Futuristic Bionic Stocks to Power Your Portfolio originally appeared on Fool.com.
AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, Nike, and Under Armour. The Motley Fool owns shares of Apple, Google, Nike, and Under Armour. AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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