I am currently enrolled at the University of Connecticut as a Finance Major. With over twenty thousand undergraduates enrolled, there seems to be a fairly large sample size when it comes to observing the relationship between youth and technology. One can quickly identify many current and emerging trends simply by walking around with an observant eye. An example of this would be the new sensation of tablets and e-readers. Let me be the first to say that the footprint of this new trend has yet to be felt by the college community. Out of my five classes, each containing roughly 20-30 students, there is currently one student who owns a tablet and uses it in class. Now this is an extremely small sample size, but I am willing to bet that you that number will jump to 10-20 students by next year alone. I for one have already purchased an Ipad that I will use on a daily basis next semester. A study done in July by Britain’s The Independent, stated that 50% of college students plan on owning an E-reader by next year (2011). The same study determined that number is currently 2%, which falls in line pretty close to my in-class observation of roughly 1%. Many of the reader’s out there have long been removed from college, but let me inform you that the average book price is currently around $100 per book, with student-spending on books totaling an average of $900-$1000 per year. With e-textbooks priced at 60% of what hard copies cost, students will easily be able to justify the need for a tablet to their parents (the real consumers in this equation). It is for this reason that I truly believe that out of the three estimates for 2011 global wide tablets sold, my gut is telling my DigiTimes estimate of 100 million will be the closest. The other two estimates made by Citigroup and FBR Capital fall at 35 and 70 million, respectively. For many people, looking at these estimates there is no tangible way to gauge how obtainable/unobtainable those numbers are. But when you are in a young, tech-savvy environment that is known as “college” and you still see no footprint of a juggernaut trend that tablets seem to be, an investor like myself is able to truly see the unrecognized potential. Amazon has found success in their Kindle, Samsung has been decent with their Galaxy pad, and a slew of others including RIMM, Microsoft, Cisco plan on rolling out versions in 2011. It seems like AAPL is by far the "best-in-class" in this category, and many analysts agree with me with most having unite lofty expectations for this tech giant to post solid 2011 EPS growth. It's hard to blame them, with many attributing a large percentage of EPS growth to the iPad.
This goes beyond technology, but covers consumer and retail brands as well. It doesn’t take a genius to recognize that if 6 out of every 10 girls walking around campus are wearing UGG Boots (by Decker’s Outdoor), that not only is it a strong trend, but that is more than likely putting pressure on the minority 40% to cave in and buy a pair for themselves. DECK is currently up 155% in 2010, as these $150-$200 boots continue to rack up huge profits for the company. I won't go into too much detail on UGG Boots, and I haven't done that much research on the company or their financials, but I know that young people have been frantic over them for quite a few years now, and it seems like Wall St has only caught on to this fact within the last year. Not sure how saturated the market has become, but they definitely deserve a mention on a topic such as this.
How and When Does a “ Youthful” Trend Correlate With a Move in Stock
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.