Whoa! These 3 Stocks Ignored Europe’s Problems: Sonus Networks, Inc. (SONS), Delcath Systems, Inc. (DCTH)

I’ve been a little early in my investing thesis that China’s mandate of a conversion to digital signals will pay off handsomely for the smart-card maker the way the conversion to digital signals here in the U.S. helped push Dolby Laboratories, Inc. (NYSE:DLB) and Corning Incorporated (NYSE:GLW) to new heights. Dolby was the sound standard on the new TVs, and Corning provided the glass for all the flat-panel TVs that were sold. When the conversion came about, they reaped the rewards.

China Digital is similarly situated, making the smart cards that are essential for the new standards. It owns 57% of the smart-card market in the country, which is the reason for my confidence in its being a prime beneficiary of the move.

Last year’s fourth-quarter results were weak in comparison with the prior year’s effort because of a sharp spike in smart-card demand as a deadline for provincial cable network consolidation loomed. We’re bearing down on the 2015 deadline now for digital signal conversion, and I suspect we’ll start seeing sales grow appreciably in the near future for the same reasons.

The article Whoa! These 3 Stocks Ignored Europe’s Problems originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey owns shares of Oracle and Dolby Laboratories (NYSE:DLB). The Motley Fool recommends Acme Packet, China Digital TV, Corning, and Dolby Laboratories and owns shares of Corning and Oracle.

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