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SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks

Companies / AI May 11, 2019 - 02:53 PM GMT

By: Nadeem_Walayat

Companies

Where to invest to profit from the exponential machine intelligence mega-trend. I have ranked these stocks in in terms of risk vs reward and volatility. Do remember that when investing in the stock market that your capital is at risk. There are NO SURE BETS!

If you've not already done so then watch my following video from November 2016 which illustrates why everything will start to change exponentially by 2022.


Machine Intelligence has become a broad church that has fragmented or branched off into a myriad of sectors and the number keeps expanding every year. Many years ago I broke the machine intelligence mega-trend down into 9 key sectors that I have now further fragmented into 10 by basically adding Cyber Security as the following list illustrates, the 10 key machine mega-trend sectors to invest in.

Machine Intelligence Investing Mega-trend

For a primer on how to invest in AI Stocks then see my following recent video:

How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend

Top 10 AI Stocks

The stocks are ranked in order of priority. Also to further break down the list, I consider the first 5 stocks as PRIMARY i.e. the most important. The next 3 as of SECONDARY importance and finally 2 far more risky TERTIARY stocks.

The stocks analysis is being published in reverse order (10 to 1) as this analysis has first been made available to Patrons who support my work: https://www.patreon.com/posts/top-10-ai-stocks-25779914

So for immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

8. SAMSUNG - BC94.L

Here's one you were probably not expecting to make it into my AI list. However if I am including APPLE then I should definitely include the South Korean electronics giant Samsung that like Google, Amazon, Apple and the rest has embraced the quest to develop AI to implement across it's internet connected devices foremost of which are its pocket super computers such as the Galaxy range of smart phones. The current incarnation of Samsung's quest for AI is its Bixby intelligence assistant that Samsung is seeking to imbed in all of its products from TV's to fridges, ultimately an HAL 9000 in every home!

Samsung Financials

Current Price $979  
Market Cap $258bn  
Enterprise Value $253bn  
Total Cash $32bn  
Net Income $40.5bn  
P/E Ratio 6.3  
Forward P/E 6.2  
Dividend Yield 3.17%  
Sales Growth -5%  
Price to Sales Ratio (lower better) 3.42  
Price to Cash Flow Ratio (lower better)    
PEG Ratio (lower better) 0.86  
Debt to Equity (lower better) 5.92  
Stock Price 3 Year Change 69%  
Ratio to S&P 181%  

Samsung's overall financials look good with $32bn in cash and strong annual net income of $40.5bn, though sales are falling which is reflected in the stocks low P/E 6.3, which means Samsung is going through a rough patch. Then there's a healthy yield of 3.17%.

Trend - Samsung has been in a corrective bear market for the past 18 months since its peak in October 2017, falling from a peak of $1267. Nevertheless the stock is still up 70% for the past 3 years so still beats the S&P. Volatility is lower than most other AI stocks so gives ample time for investors to react to accumulate or distribute into. As a Korean stock it's obviously not going to track the S&P trend. Though importantly it does beat the S&P in dollar terms by a healthy 80% margin.

Long-term Investing - I akin Samsung to being a sleeping giant. At a P/E of 6.3 its AI potential is definitely not being priced in by the market. So whilst it may remain a sleeping giant, nevertheless it does pay a dividend in compensation and it does out perform the S&P over the long-run.

Conclusion - In amidst the volatiles are the calmer stocks such as Samsung, yes it may remain calm for many years but that's not so bad when one considers the volatility of the likes of Facebook. That and it's off the radar of most investors. So it may turn out to be one of those stocks that people wake up to in 10 years time and wish they had invested in it when it was trading at just 6X earnings when most would not touch it given its annual falling sales. And especially when one compares it to its smart phone competitor Apple which is trading at 15X earnings.

Again this the whole of this analysis has first been made available to Patrons who support my work: https://www.patreon.com/posts/top-10-ai-stocks-25779914

So for immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Your analyst

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2019 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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