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Infinera Corp. (INFN), InvenSense Inc (INVN), Nuance Communications Inc. (NUAN): 3 Stocks to Indulge Your Bull Market Euphoria

The market has been doing fairly well lately. With the S&P 500 up 23% in the last year, it’s easy for investors to start feeling pretty good about themselves. Of course, now is the time to pay the most attention to the risks in the market. Europe’s economy is still throwing a tantrum, Syria is threatening to create a surge in oil prices which could have mixed effects on the market, and of course if the Fed stops their easing policies, the market could weaken in the future. The market also looks pretty high right now by other metrics. Corporate profit margins seem unsustainably high, and Market Cap/GNP is at 108% (Warren Buffett prefers to buy in the 70% and 80%’s).

But enough risks! Haven’t we had enough stock market worry? If you still feel like you’d like to have some fun and buy into stocks made for optimists, here are 3 game-changing companies to keep your eye on.

Infinera Corp. (NASDAQ:INFN)

Infinera Corp. (NASDAQ:INFN)

What is the most influential piece of technology in recent memory? The first thing that comes to mind is the internet. The sign of a developed country is no longer literacy, but internet connectivity. So, as the world’s internet traffic grows and demand for internet bandwidth increases, Infinera Corp. (NASDAQ:INFN) is there to meet that demand with its futuristic Photonic Integrated Circuits. In the 100G technology market, Infinera is now the market leader. Keep in mind that this is a market projected to grow at an almost 50% CAGR for the next four years.

Infinera Corp. (NASDAQ:INFN) operates in an industry where it’s difficult to get new customers. Given the capital already put into place by older market leaders, it’s tough to convince a customer to go to a new company, even if they have more efficient, faster technology. However, Infinera has done well, acquiring Vodafone and Duke University as customers. If Infinera Corp. (NASDAQ:INFN) can convince customers that it is worth trusting its technology, it could be worth much more than it is now. News like the other day’s (Infinera’s PIC technology has surpassed 1 billion hours of failure free operation) can only help.

Even with Infinera Corp. (NASDAQ:INFN)’s amazing new technology, the company isn’t yet profitable–sales only grew 8% over last year, and gross margins have declined each of the last 3 years. Infinera’s biggest threat is clear in these numbers. It’s the smallest member of its market, giving it very little ability to attract new customers and raise prices on its customers. The thesis for Infinera’s future is clear, however. It’s the argument that superior technology will eventually win over strong business relationships and market position, and if you don’t believe in this thesis, Infinera’s future might not be your type of tech story.

InvenSense Inc (NYSE:INVN)

InvenSense Inc (NYSE:INVN), on the other hand, is a market leader. This is a company that provides the gyroscopes, accelerometers, and other fancy sensors in smartphones, tablets, and many other products that allow them to use motion-tracking technology. Invensense has currently taken over the smartphone market, with Apple Inc. (NASDAQ:AAPL) as the only smartphone company still using their main competitor’s, STMicroelectronics, technology. However, even that could change. InvenSense Inc (NYSE:INVN) clearly has superior technology, and Piper Jaffray now believes that Apple is likely also among Invensense’s customers. While legal issues with STMicroelectronics currently overhang the stock price, continued revenue growth with the addition of Apple as a customer could provide a catalyst for large future gains. Moreover, if Invensense simply continues to ride the growth in the worldwide smartphone market, it should do perfectly fine in the long run. Technavio projects that smartphones markets will continue to grow by 10% compounded annually at least until 2016.

InvenSense Inc (NYSE:INVN) is already profitable, however, and trades for 24x earnings after achieving 36% sales growth since last year.  As InvenSense Inc (NYSE:INVN)’s biggest competitor, STMicroelectronics’s sales actually fell 13% last year, Invensense could become very cheap if it can grow and sustain its earnings. According to Finviz, Invensense is only trading at 17x forward earnings, and things should get better in the years ahead.