With 2018 ended with a generally negative market returns for the three major US stock indices like the Dow Jones Industrial Average (down 5.6 per cent in 2018), the S&P 500 (down 6.2 per cent in 2018), and the Nasdaq Composite (down 3.9 percent in 2018), individual stocks like Nanometrics Incorporated (NANO) stock is up 8.24 per cent. Imagine if one were to put his entire wealth in one year, ignoring the various market volatilities impacting the stock price, that could easily be an instant return in and out over the course of one year.
One-year daily chart of Nanometrics Incorporated (NANO)
How about other nanotechnology-themed stocks that did well in 2018
One of the best performing sectors in 2018 was the healthcare sector, specifically the S&P Health Care Sector Index Fund (XLV) did make a comeback towards the end of the year with a technical rebound to close out 2018 on a bright note being up 3.5 per cent for the year to close at US$86.51 on the last trading day of the year.
Merck, a component stock in the XLV index fund was one of the top performing stock, and was up a whopping 35.9 per cent since the start of 2018 to close out 2018 on a solid footing at US$76.41.
Merck Inc. entered into nanotechnology field as far back as August 2016 when it signed an agreement with London Stock Exchange (LSE) listed Nanoco Group plc to develop and manufacture cadmium-free quantum dots and other nanomaterials. The financial details were not disclosed at that time, but Nanoco will receive licence fee and royalties on Merck’s sales of the Nanoco cadmium-free quantum dots Merck manufactures.
In that 01 August 2016 press release, the joint venture (JV) statement noted that Quantum materials offer substantial additional benefit when they are used as color converters in the light source of liquid crystal displays. In conventional displays, the colors blue, green, and red are filtered out of the original white light of the LED light source. A great deal of light is lost in this process. Because a blue LED in combination with red and green quantum materials only generates the blue, green and red light that is perfectly transmitted through the filters, there is much less absorption. This increases the display’s brightness, reduces electricity consumption and leads to much purer and potentially stronger colors.
What is in store for nanotechnology focused stocks in 2019
While it is too early to predict what will happen to nanotechnology stocks like Nanometrics and other health-care stocks that have incorporated some form of nanotechnlogy applications or investments in their businesses, we do expect the sector to grow out of the negative limelight received among the more savvy-oriented stocks like the “FAANG” stocks or technology-oriented stocks. Witness the fall of stocks like Facebook Inc. (FB) is enough to convince those who are deeply invested in their business model and have lost out badly in 2018.
While it cannot be say that such issues like misuse one’s individual privacy will negatively impact nanotechnology-focused stocks if any of them were discovered to have breached ethical standards, it does pay to stay diversified, and look deeply in sector index funds that have deep usage of nanotechnology applications. Perhaps, one can discover an index fund that is well diversified, low cost, and its benefits of long-term investing in the index fund outweigh the costs.