Two significant hands-free laws went into effect on July 1.

In California, according to the Department of Motor Vehicles, the law prohibits all drivers from using a handheld wireless telephone while operating a motor vehicle; motorists 18 and over may use a "hands-free device." In the state of Washington, the law is similar, prohibiting the use of a wireless device such as a cell phone being held to your ear while you are driving.

Because of these new laws, there may be a trading opportunity with the companies that make hands-free headsets.

Unfortunately, you can't invest in Aliph, maker of the stylish Bluetooth Jawbone headsets, although two venture capital companies, Sequoia Capital and Khosla Ventures, own parts of the company. But there are plenty of other companies that make headsets.

Plantronics (PLT) makes Bluetooth headsets, telephone headset systems and accessories. The stock has a P/E of 17, a PEG of 3.6 and a yield of 0.8%.

Motorola (MOT) makes headsets as a small part of its overall mobile telecom business. The stock has a forward P/E of 26 and a PEG of 13. It pays a yield of 2.2%.

Mobile phone company Nokia (NOK) also puts out headsets. The stock has a P/E of 12, a PEG of 0.84 and a 2.9% yield.

Sony Ericsson is a joint venture between Sony (SNE), the Japanese electronics and media company, and Ericsson (ERIC),the Swedish telecommunications company.

Parrot (PAOTF.PK), which rarely trades on the Pink Sheets in the U.S., is based in Paris, France, and is one of the leading manufacturers of hands-free mobile telephone devices. The stock has a P/E of 12.

Samsung Electronics (SSNLF.PK) is one of the world's largest electronics manufacturers, based in South Korea. It also makes headsets. This is a high-priced stock that sells for over $600 per share.

There is even a BlackBerry-brand BlueTooth headset. The BlackBerry products are produced by Research In Motion (RIMM), which has a P/E of 49 and a PEG of 1.01.

Matsushita Electric Industrial (MC) makes headsets through its Panasonic brand of electronic products. It has a P/E of 15 and a PEG of 1.48.

For other telecom-related companies, check out High-Yield Telephone Stocks and Brazilian Telecom Stocks.

It's always good to consider all your options in the current up-and-down market.

A note from James Altucher:

Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to a theme but also offer significant analysis as to why the stocks are cheap.

Here are some examples:

Stocks related to drilling the Marcellus Shale

MLPS with yields above 7%

Microcaps trading for less than tangible book

Stocks that do well after Hurricanes

Here's the challenge: Build a portfolio at Stockpickr.com with great analysis, and send me the link. Each great portfolio (with analysis) will get posted on TheStreet.com with your byline (as a "Stockpickr Guest Columnist") and will be included in my email I send to Jim and the other
hedge fund managers on my list.


Posted on Aug. 11, 2008