Don’t Give Up on Immersion
Portfolio holding Immersion (NSDQ: IMMR) develops technologies that allow people to interact with various digital products by using their sense of touch. Since we added IMMR to the portfolio on May 20, 2016, the stock has generated a healthy gain of 33.1%.
Now, the naysayers are arguing that IMMR is about to lose its touch (so to speak). But we beg to differ.
To be sure, the stock has taken a beating in recent months, as the cost of patent litigation against Apple (NSDQ: AAPL), AT&T (NYSE: T), Samsung (OTC: SSNLF) and Motorola (NYSE: MSI) weigh on Immersion’s financial wherewithal. Immersion’s deep-pocketed foes have challenged its patents on “haptic” (touch) feedback, the vibration an electronics device gives off to acknowledge a user action.
With a market cap of $239.6 million, Immersion is a small disruptor that was bound to get bullied sooner or later by the big boys. That’s also part of the company’s appeal, though, because it’s a tempting takeover target.
At Breakthrough Tech Profits, we counsel patience and taking the long view, not impulsive action. Immersion still possesses numerous inherent strengths and this certainly isn’t the first time that a groundbreaking company has come under attack by the status quo.
More often than not in these situations, tech upstarts have prevailed in court and richly rewarded patient investors. Despite Immersion’s well-heeled enemies, now’s not the time to run for the exits.
We continue to rate IMMR a Buy.
To lock in gains and protect against potential losses, consider a Stop Loss at $7.40, which would represent a drop of about 10% from current levels. This move would allow you to weather the volatility that’s common to high-tech small caps, but also give you an escape hatch before a modest decline turns into a ruinous rout.
Stock Talk
John N
My stop-loss on IMMR was triggered today at $7.40. (Although it sold for $7.41)
John Persinos
Check my latest portfolio update, which I published today. I discuss Immersion at length.
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