But with up to $800 million in GoPro stock expected to come to the open market in the form of a secondary offering, TheStreet TV's Jack Mohr has an alternative for investors: Buy Ambarella (AMBA) instead.
Shares of the semiconductor company are up 52% on the year and have risen an astounding 107% in the past six months, helped along by GoPro's IPO.
Although experts may advise investors to use the secondary offering as a buying opportunity for GoPro, Ambarella is appealing for several reasons. For starters, the company is the sole chip provider for all GoPro products. So as demand for GoPro cameras climb, so does demand for Ambarella's chips.
Furthermore, Ambarella doesn't live and die solely on the success of GoPro. It has a diversified business, with products ranging from commercial and consumer video surveillance, as well as cameras used in automobiles, drones and law enforcement.
Better yet, the stock comes with a price-to-earnings ratio that is 50% lower than GoPro, even though analysts are expecting sales for both companies to grow at the same rate, Mohr said. Over time, Ambarella will likely close the valuation gap, as the stock moves higher.
"So instead of flocking to your favorite stores this holiday season in search of deals, the best bargain out there may very well be Ambarella shares," Mohr concluded.
-- Written by Bret Kenwell.