When it comes to investing in tech, the spotlight is often on big names like Nvidia, Alphabet, and Microsoft. However, according to Trent Masters, portfolio manager at Alphinity Investment Management, there is one stock that has been flying under the radar – telecommunications company Motorola Solutions. Despite being overshadowed by other tech giants, Masters describes Motorola Solutions as “a very beautiful, solid, public safety-focused business” that is worthy of investor attention.
Contrary to popular belief, Motorola Solutions is not just about phones. The company has transformed itself into a key player in the public safety sector. With approximately 70% of its business dedicated to Land Mobile Radio (LMR), which is used by first responders for communication, Motorola Solutions is at the forefront of facilitating critical communication in times of emergency. In addition to LMR, the company also offers video security and building command center solutions, further establishing its presence in the public safety market.
Masters is confident in the future outlook of Motorola Solutions, especially considering the current upgrade cycle in the company’s LMR business. With new devices being rolled out at higher prices, there is significant potential for revenue growth. Additionally, the company’s video security and command center divisions are experiencing increased market traction, adding to its overall value proposition. Masters views Motorola Solutions as a solid, high-quality business with strong growth potential.
While AI is not the primary driver for Motorola Solutions, there are opportunities for the company to leverage AI technology to enhance its offerings. For example, AI could be used in the company’s video security solutions to identify potential threats, such as individuals carrying weapons, and control access to sensitive areas. By integrating AI capabilities into its products, Motorola Solutions could further strengthen its position in the public safety market.
Traded on the New York Stock Exchange, Motorola Solutions has seen a notable increase in its share price, with gains of over 18% year to date and over 30% in the last 12 months. Analysts covering the stock have provided mixed ratings, with nine recommending a buy or overweight rating and six suggesting a hold. The average price target on the stock indicates slight downside potential, but the overall sentiment remains positive.
While Motorola Solutions may not be the first name that comes to mind in tech investing, the company offers a compelling value proposition in the public safety sector. With a strong focus on critical communication solutions and a potential for growth through AI integration, Motorola Solutions presents an opportunity for investors seeking exposure to a hidden gem in the tech industry.
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