Posted on 06/22/2016 7:50:45 PM PDT by BenLurkin
Demand for virtual reality is expected to surge in the years ahead. Research firm IDC expects that more than 110 million VR headsets will be sold in 2020, up from 9.6 million headsets in 2016.
Investors looking to add exposure to the trend have a number of stocks to choose from, including both NVIDIA (NASDAQ:NVDA) and Facebook (NASDAQ:FB). But while those companies may offer attractive upside, their shares certainly aren't cheap, trading for about 40- and 69-times trailing earnings, respectively.
Those investors looking for more of a bargain might consider AMD (NASDAQ: AMD). The computing giant seems likely to play a large role in the market for VR experiences, as its graphics cards could power many VR-capable PCs in the years ahead.
An inexpensive stock
Admittedly, AMD isn't profitable. Last quarter, it lost $109 million. AMD's management believes the firm will become profitable in the second half of the year on an adjusted basis, but will remain unprofitable under generally accepted accounting principles for some time. That means AMD has no trailing -- or even forward -- price-to-earnings ratio. Still, it compares favorably to Facebook and NVIDIA based on many other metrics.
AMD's trailing price-to-sales ratio, for example, hovers around 1, compared to 5-times for NVIDIA and more than 16-times for Facebook. Its enterprise value to trailing revenue is likewise considerably lower: about 1.5-times for AMD, 4-times for NVIDIA, and 15-times for Facebook. That's not to say Facebook and NVIDIA are unreasonably expensive: both businesses are booming. NVIDIA's revenue rose 13% on an annual basis last quarter; Facebook's surged 52%. But at current levels, investors are certainly paying for that growth.
AMD's business, in contrast, is less attractive. In addition to losing money, sales were actually down over 19% last quarter.
(Excerpt) Read more at fool.com ...
I’ve invested all my money in a Nigerian email scam, which I think will pay out even better than this VR thingie.
I invested all mine in houses and lots. Whore houses and lots of whiskey.
Meta.
That’s called a recession-proof portfolio.
Advice from a website named “fool.com?” How appropriate.
it only lost 109 million last year? Who do I send the check to?
...Can’t help but invest the $2K I have left in businesses touted in paid-for stories headlined “THIS DIRT CHEAP STOCK.”
All depends on whether you’re the scammer or the scamee.
In Ponzi schemes, it is always the last one in that takes it in the FruitoftheLooms.
It’s a shame there are no public VR porn stocks to buy
rofl!!!
now there’s a winner!
already up from the 2 bucks where it probably belonged. If it goes to that again i’l waste some money maybe.
Trading above both the 50 and 200 day moving averages for the last six months..
THAT i didn’t know. Thanks.
that’s solid.
I’ve been poking around at it for 10 minutes.
i dont care about losing 100m last year. I care what it has on hand to withstand losses until/if it goes into the black
That will do well until another technology takes over. It might be a while.
I once knew a guy who once had a lot of inherited wealth which had mostly disappeared. When asked what happened to it, he said he spent about half of it on booze and loose women. And the other half, he spent foolishly.
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