Join The Cutting-Edge Wearable Tech Industry With This Thematic ETF
Investing.com | May 18, 2022 09:56
The 'body + tech' or 'wearable tech' industry is growing with significant future potential. So, Wall Street pays close attention to the many companies pushing the limits of innovation to bring exciting new products to the market.
Most available applications and products include mobile devices and gadgets that can be worn on the body such as smartwatches, medical wearables, smart clothing with sensors, and head-mounted displays.
According to metrics from Deloitte :
"320 million consumer health and wellness wearable devices will ship worldwide in 2022."
Estimates tell that figure should reach 440 million units by 2024.
We are likely to see more smart clothing or the integration of electronics into conventional textiles in the future. Recent research predicts that the global wearable technology market will exceed $380 billion by 2028. This increase would mean a compound annual growth rate (CAGR) of 18.5% from 2022 to 2028.
With wearable technology emerging as a significant trend, many investors now keep companies engaged in this cutting-edge sector on their radar screens.
h2 Examples of Body + Tech Stocks/h2InvestingPro provides access to 'body + tech' stocks that can appeal to long-term investors. Among the leading large capitalization (cap) shares are the semiconductor heavyweights Qualcomm (NASDAQ:QCOM) and Skyworks Solutions (NASDAQ:SWKS); continuous glucose monitoring (CGM) manufacturer Dexcom (NASDAQ:DXCM); global positioning system (GPS) device group Garmin (NYSE:GRMN); and radio frequency (RF) solutions provider Qorvo (NASDAQ:QRVO).
Technology behemoths, such as Apple (NASDAQ:AAPL) and Google parent company Alphabet (NASDAQ:GOOGL) are also ahead of the game with their wearables raging from fitness trackers to smartwatches.
Among the fastest growing wearable tech firms are the wireless power technology developer Energous (NASDAQ:WATT); low-power system-on-a-chip (SoC) chip provider Ambarella (NASDAQ:AMBA); Qualcomm; Dexcom; organic light-emitting diode (OLED) technologies group Universal Display (NASDAQ:OLED); and digital healthcare company iRhythm Technologies (NASDAQ:IRTC).
Meanwhile, some stocks currently trade at relatively low price-to-book (P/B) ratios. Micro-acoustic and precision device solutions provider Knowles (NYSE:KN); haptic technology specialist Immersion (NASDAQ:IMMR); Energous; Singapore-based engineering group Flex (NASDAQ:FLEX); GoPro (NASDAQ:GPRO); Qorvo; and microdisplay provider Kopin (NASDAQ:KOPN) are among those names.
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Regarding the most undervalued stocks compared to their fair-value levels as indicated by InvestingPro, we also see Skyworks Solutions; Qorvo; Switzerland-based IT name Logitech International (NASDAQ:LOGI), which focuses on hardware, storage, and peripherals; Garmin; and Kopin.
Among the wearable tech stocks, shares of the high-growth dividend stocks typically command a premium. Therefore, several names to focus on would be Garmin; Qualcomm; Skyworks Solutions; Logitech International; Universal Display; and electronics manufacturing services (EMS) provider Jabil Circuit (NYSE:JBL).
Finally, investors who take account of analyst price targets might be interested to know that several wearable tech stocks could see a significant upside from current price levels. Examples include Immersion; Energous; Dexcom; GoPro; and Logitech International.
Understandably, picking the "body + tech" stocks that best serve individual portfolio objectives requires further diligence. Retail investors could also consider investing in an exchange-traded fund (ETF) that provides broader exposure to the wearable tech industry.
h2 Examples Of ETFs That Provide Exposure To "Body + Tech" Shares/h2Different ETFs provide access to stocks on our lists because companies are varied and cover numerous technologies. Examples include:
- Invesco QQQ Trust (NASDAQ:QQQ), which holds Alphabet, Apple, Dexcom, Qualcomm and Skyworks Solutions in its portfolio - down 23% year-to-date (YTD);
- Invesco S&P MidCap 400 Revenue ETF (NYSE:RWK), which holds Jabil - down 7.1% YTD;
- iShares Micro-Cap ETF (NYSE:IWC), which holds Energous - down 18.5% YTD;
- Procure Space ETF (NASDAQ:UFO), which holds Garmin - down 18.4% YTD;
- ProShares Metaverse ETF (NYSE:VERS), which holds Immersion - down 17% since inception in March.
These returns remind us that 2022 has been a tough year for tech and growth companies across the board. However, those with robust product offerings, revenues, and balance sheets will likely create shareholder value in the coming quarters.
Today's article now introduces a thematic fund that provides exposure to several top names in the wearable tech industry.
h2 Global X Internet Of Things ETF/h2- Current Price: $28.83
- 52-week range: $26.65 - $40.46
- Dividend yield: 0.44%
- Expense ratio: 0.68% per year
The Global X Internet of Things ETF (NASDAQ:SNSR) offers access to businesses with a focus on the Internet of Things (IoT), such as wearables, sensors, networking infrastructure, or connected automotive technology.
SNSR, which started trading in September 2016, tracks the Global IoT Thematic Index. More than half of the companies come from the US. Next are businesses from Switzerland, Taiwan, France, and Austria.
In terms of sectoral allocations, we see the dominance of information technology (63.1%) and industrials (23.6%), followed by health care (6.8%), consumer discretionary (6.3%), and communication services (0.2%).
The ETF currently holds 47 stocks, of which the top 10 names account for almost half of $327.22 million in net assets. Among those are the Swiss semiconductor company STMicroelectronics (NYSE:STM); Taiwan-based embedded boards manufacturer Advantech (TW:2395); Dexcom; Garmin; sensor supplier Sensata Technologies (NYSE:ST); Qualcomm; and Ambarella.
Like many funds that invest in tech and high-growth shares, SNSR hit a record high in November 2021. But since then, we have seen a different story on Wall Street.
The ETF has lost 26.3% since January and 12.6% over the past 12 months. It also hit a 52-week low on May 12. Trailing P/E and P/B ratios stand at 17.39x and 2.60x.
Amid the rapid digital transition the world is witnessing, the global IoT technology market could grow at a CAGR of well over 6.5% during the 2021-2027 period. Long-term investors whose portfolios tolerate short-term volatility could consider researching SNSR further.
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