The Company Leading the

$19 Trillion Revolution

 The Company Leading the
$19 Trillion Revolution

M
OORE’S law holds that computing power doubles every two years. And that’s what we’ve had for
over 50 years now. Computers are becoming smaller, cheaper and more powerful.
Computers have come a long way in those 50-plus years. In 1959, IBM introduced its 7090
mainframe computer, which was impressive for its time. You could even use it from a remote terminal. The
downside? It still filled a room, cost between $4 million and $5 million in today’s dollars and was incredibly slow.
By the 1960s, we started to experiment with transistors.
But the big change came when we moved to computer chips.
By packing circuits together, a chip expanded the power of old computers. Plus, you could pack them so
tightly that machines that once needed a whole room, now fit on a desk.
Computer chips made people incredibly rich. Imagine buying into Intel, Apple or Microsoft when the chip
revolution came to the stock market.

If you bought Microsoft at its IPO and put $1,000 into it, you’d have more than $1.8 million! The key is
getting in early on a new trend and buying companies that are going to benefit the most.
Right now, an incredible new trend is unfolding… the Internet of Things (IoT).
You may have seen it referred to as Internet 2.0, or the Second Industrial Revolution. The Internet of Things
is the network of devices loaded with sensors and software. In this report, I’m sharing a company that’s going
to get us in on the Internet of Things revolution.

Unlocking the Internet of Things

The key to the Internet of Things is something called MEMS, or micro-electromechanical systems.

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 Also known as “smart sensors,” MEMS are microscopic computer chips. Many of them can fit on the tip of
your finger. These are the critical elements for this network to work.
These smart sensors are going into pipes to measure how much water is flowing through them.
They’re in roadways to tell us how much traffic is on a highway. They can collect information in a
smartphone because they capture data with great precision.
MEMS can handle huge amounts of data in a fraction of a second. We can adapt MEMS for particular
environments ... heat, cold, water or air. They calibrate themselves for unusual situations so that the data is
relevant.
Industry research shows that sensor growth is going to explode over the next few years. Allied Market
Research (AMR) estimates globally MEMS are going to be a $122.8 billion market by 2026. AMR also
predicts that the growth rate will rise to 11.3% per year.
That’s an impressive rate of growth! And it’s the kind of growth you want to get into early.
Smart sensors will be all around us.
We want to buy into a company that puts their sensors in machines everywhere. Intel didn’t become a
winner because it had the best technology — it succeeded because its chips went into billions of personal
computers. We want our smart sensors to go into something that’s going to sell by the billions.
We also want to make sure that the technology is unique, so that it can’t be replaced easily. You don’t want
to own a commodity sensor company. You want a company that has different tech, one that is absolutely
critical to have in machines and devices.

22 Billion and Growing…

This year, analysts estimate that there will be nearly 60 million cars sold. These cars are now equipped with
smart sensors. They are in the engines to monitor things like temperature, levels of oil, water and air pressure
and countless other factors.
They’re on the outside of cars to tell the driver if a car is in his blind spot. They can even automatically brake
the car if something juts out in front of it.
According to the latest reports, every car has about 60 to 100 smart sensors on board. However, cars are
becoming smarter.
This means they will create more data than ever before.
As a result, the projected number of sensors per car could soon reach as many as 200. The car industry by
itself will need 12 billion sensors this year alone. And that’s a lot.
Another area where more and more smart sensors will be incorporated is in your home. For example, Nest is
a smart thermostat that learns your heating and cooling preferences. It adjusts on its own to account for them.
It also learns your daily routine so it can turn on and turn off your heating and cooling systems.
That way, you’re not wasting energy when you’re not home.
As cars and home appliances show, smart sensors are going to be everywhere. And we want to profit from that.
We want to buy into the perfect smart sensor company. We want one whose stock is going to soar higher
because we will use its products in huge amounts. So, we’ll look for a company whose smart sensors are used in
cars, homes and in city infrastructure. In other words, you want it to look like this:
As I mentioned earlier, we want a company that has unique technology. It needs to be critical for what
customers use it for. We want to see a company that’s innovating and creating new products that its customers
want to use. This combination of high-volume usage and unique technology is why you want to buy
STMicroelectronics (NYSE: STM).

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 Look at the image above again. That’s where STM’s sensors are being used today. Notice that these are all
high-volume markets like cars, houses, etc. I’ll tell you about some of the innovative products STM recently
introduced. I see these as what’s going to make its sales surge in the future. First, let’s get some details about STM.

The Start of a Fresh Uptrend

STMicroelectronics is a global smart sensor company with headquarters in Geneva, Switzerland. STM has
over 46,000 employees around the world. Of these employees, nearly 20% are in research and development.
This is crucial. The only way to have unique technology is to invest in research and development. As you
can see by the way it allocates its workforce, this is a huge priority for the company.
In 2019, STM generated $9.6 billion in revenue. Of this, 38% came from sales in the automotive industry.
The remainder was spread between smart homes, smart cities and industrial machines. This is exactly the kind
of high-volume exposure we’re looking for.
Now, you need to understand that STM’s smart sensors are a cyclical business. By cyclical, I mean that it
goes through periods when there’s more demand, and periods when there is less demand. Cyclical businesses
go through long ups. Catch the stock at the beginning of the up cycle, and you can make five or even 10 times
your money.
STM’s smart sensors are at the beginning of the Internet of Things three-stage market cycle: innovation,
acceptance and saturation. It’s introducing innovative new products that are going to become widely accepted
and will then saturate the market — making STM’s sales surge.
STM recently announced a smart sensor that improves accuracy in car navigation. It also just introduced
the newest generation of electronics for smart cars. These will help cars optimize performance, lower power
usage and increase reliability.

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 STM has developed a new silicon-carbide technology that lets automobile owners travel longer distances.
You can also recharge cars more quickly.
And this is just a sample of what STM has up its sleeve.

A Premier Play on the Internet of Things Revolution

I can tell you from 25 years of being an investor in cyclical companies that this is the exact setup for getting
in at the bottom of a cycle and riding it to the top. This is the setup to make five or 10 times your money.
In 2011, STM’s stock traded at over $11 a share. At the time of writing, STM currently trades over $24 and
is already up 317% from when I first recommended it.
I’m very happy with that return on investment. I also believe that STM has a lot further to climb. The
Internet of Things cycle is going to be a massive one. This cycle is going to challenge the all-time share price
seen in STM in 2000. That price peak was associated with the framework for the internet.
Meanwhile, the estimated worth of the Internet of Things mega trend is $30 trillion — up from the $19
trillion estimate when I first wrote this report.
So, this cycle is even bigger than the one that we experienced in 2000. Back then, STM peaked at $54. I
believe STM will surpass its 2000 share price peak of $74.
STMicroelectronics has an enormous upside. The company continues to put itself right into some of the
greatest opportunities that the Internet of Things has to offer.
It’s a play on one of the biggest elements of the Internet of Things mega trend — self-driving cars. It also
has its sensors in many different industrial applications. STM’s components are already being used in factory
machinery, smartphones, wireless charging and virtual reality machines.
In other words, STM is set up to be the most important sensor company for the Internet of Things. So,
despite the fact that the stock has gone up rapidly, there are plenty of profits to come. I believe that the stock
could soar even higher into the future.
Action to take: Buy STMicroelectronics (NYSE: STM).
Note: As I mentioned earlier, when I first told readers about STM in June of 2016, the stock was trading at
just $5.99. It has since moved higher than my entry price.
However, I still believe that this stock has plenty of room to climb, so it’s still a great buy. That means you
can add it to your portfolio if you’re comfortable paying more than my buy-in price.
Just know that your results may vary from mine depending on what you pay for your shares.
Regards,

Paul Mampilly
Editor, Profits Unlimited

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