6 Tech Stocks
That Could Double
By Louis Navellier
What are the qualities of stocks that double? If you pay attention to the markets at all, you see plenty of stocks go up and down, but it’s only a few that go up 100%.
So, how does an investor pick one? Are there secrets to picking these big winners that most average investors don’t know, or is it just a matter of luck?
Recent history provides a strong clue that you can apply to any market condition.
Silicon Valley is full of twenty- and thirtysomethings worth hundreds of millions of dollars. One month, a tech-smart college dropout is living with his parents and driving a used Hyundai. The next month, he’s worth $50 million and driving one of his three Ferraris.
The driver of all this new wealth?
The word scalability is repeated over and over in Silicon Valley – and for good reason.
A business must have scalability in order to grow large in a short time (that is, “make you a ton of money quickly”).
Scalability is the ability of a business to massively grow revenues while minimally growing the costs associated with producing those revenues.
For example, a lawn-mowing business is not scalable. If you own a lawn-mowing business and want to double in size, you’ll have to buy twice as many lawn mowers as you have now, and you’ll have to hire twice as many lawn-mower operators as you have now. Because of this, your revenue cannot soar far beyond your costs.
On the other side of the spectrum, you have social media businesses like Facebook (FB) and Twitter. These businesses are very scalable.
It took a lot of work in the early days to create the technologies and businesses behind Facebook and Twitter. But once they were created, these two businesses added new users and increase their advertising revenues much faster than they increased costs. Their market values exploded higher as a result. They grew to huge sizes faster than just about any other kind of businesses in U.S. history.
Software companies are very scalable as well. A company like Microsoft (MSFT) must spend money and time creating and developing software like Office. But once the product is created, Microsoft can produce and sell additional copies of the software at minimal cost… so the company’s sales can rise much faster than costs.
Don’t get me wrong: Owners of non-scalable businesses (like a lawn-mowing business) can grow wealthy. Many people have done so in the past. Many people will do so in the future.
But if your goal as an investor is to own businesses that can make you a lot of money quickly, then you must focus your attention and capital on scalable businesses. And the best place to find them is Silicon Valley.
We bring this up because making a lot of money in technology stocks is what this report is all about. Below, you’ll find 6 technology stocks with surging growth. They all have the power of scalability – great sales growth and operating margin growth – and can put that to work for you and your wealth.
Tech Stocks That Could Double #1: Clearfield, Inc. (CLFD)
Within two years, most cell phones will be 5G enabled and able to wirelessly handle television streaming. But when you factor in the possibilities of an entire “Internet of Things,” reaching everything from transportation to gaming and artificial intelligence and even healthcare, 5G is a much bigger story than watching TV on your smartphone.
Helping this 5G revolution is Clearfield, Inc. (CLFD). The company started operations as APA Enterprises with the acquisition of fiber connectivity operations from Americable and Computer System Products in 2003. But, by 2007, it changed gears (and names!) and reinvented itself as a leading provider of fiber optic management, protection and delivery products.
The company’s “fiber to anywhere” platform was designed to not only meet the needs of broadband service providers, but also cut down on the costs associated with the deployment, management, protection and scalability of fiber optic networks. Clearfield’s “game-changing” Clearview Cassette is the building block of its FieldSmart product portfolio of cabinets, enclosures, panels and wall boxes. All of which are designed with flexibility, service and network migration capabilities.
Clearfield introduced the StreetSmart Small Count Fiber Hand-Off Box, which was developed to streamline a provider’s ability to extend fiber networks even further into the network at a more economical price. The product is expected to support not only 5G network rollouts, but also the rollout of fiber-to-the-premise (FFTP) and wireless access services.
With 5G spreading across the country, from urban city centers to rural areas, it’s not surprising that Clearfield has seen strong demand for its products—or that it posted record results.
Clearfield, Inc. did just that for its second quarter in fiscal year 2021. Thanks to strong demand for fiber-fed broadband networks, Clearfield achieved record sales of $29.7 million, or a 45% year-over-year increase. Analysts were expecting second-quarter sales of $25.8 million.
Second-quarter earnings surged 414% year-over-year to $3.6 million, or $0.27 per share, up from $0.7 million, or $0.05 per share in the same quarter a year ago. Analysts were looking for earnings of $0.17 per share, so Clearfield smashed estimates by 58.8%.
Thanks to its “growing backlog, expanding pipeline and building market demand,” Clearfield expects full-year 2021 sales between $120 million and $125 million. That’s up from sales of $93.07 million in fiscal year 2020.
Tech Stocks That Could Double #2: CrowdStrike Holdings, Inc. (CRWD)
CrowdStrike Holdings, Inc. is in the lucrative cloud security business—and its business has been booming amidst the global COVID-19 pandemic. Specifically, CrowdStrike offers real-time endpoint security, threat intelligence and cloud workload protection, helping prevent cyberattacks on and off an enterprise’s network.
The company’s platform, The CrowdStrike Falcon, utilizes its proprietary CrowdStrike Threat Graph to identify security threats and prevent data breaches. CrowdStrike boasts that its platform combines artificial intelligence (AI) and machine learning with behavioral analytics and 24/7 threat hunting all in one solution to protect all workloads on the network—cloud-based, on-premise and virtual environments.
Currently, CrowdStrike offers 16 modules on its Falcon platform, which includes next-generation antivirus protection, firewall management, malware search engine and analysis, threat intelligence and threat hunting. The company also acquired Preempt Security in September to expand its offerings to include identity protection.
For the first quarter in fiscal year 2022, revenue soared 70% year-over-year to $302.8 million, with subscription revenue accounting for $281.2 million. That topped forecasts for revenue of $291.4 million. First-quarter earnings surged 400% year-over-year to $0.10 per share, up from $0.02 per share in the same quarter a year ago. Analysts were expecting earnings of $0.06 per share, so CrowdStrike posted a 66.7% earnings surprise.
Company management commented, “The CrowdStrike name has become synonymous with best-in-class cybersecurity protection and a platform that just works. Customers of all sizes are increasingly choosing CrowdStrike as their security platform of record…”
Looking forward to the second quarter, CrowdStrike expects revenue between $318.3 million and $324.4 million and earnings per share between $0.07 and $0.09. That’s nicely higher than analysts’ current projections for second-quarter earnings of $0.06 per share on $310.19 million in revenue.
Tech Stocks That Could Double #3: Logitech International SA (LOGI)
For nearly four decades, Logitech International SA (LOGI) has developed products that have an impact on how folks connect and interact with technology. Logitech’s products include keyboards, mice, iPad and tablet accessories, smartphone accessories, headsets, webcams, home security cameras, smart home devices, video conferencing tools and speakers.
Logitech’s products are utilized for gaming, as well as personal computer use, music, video streaming, home office solutions and teleconferences. The company’s products are marketed under several brand names: ASTRO Gaming, Blue Microphones, Jaybird, Logitech, Logitech G, Streamlabs and Ultimate Ears.
The company has benefited from more and more folks working remotely over the past year—and the great news is that trend isn’t going away any time soon. A recent survey by Gartner revealed that 80% of the companies it surveyed will permit at least part-time remote work and 47% will allow full-time remote work. So, home office supplies and communication equipment will remain in strong demand for the foreseeable future.
Thanks to more folks working remotely and students studying online, Logitech experienced a surge in demand for its products in the most-recent quarter, and the company expects this trend to continue.
Fourth-quarter adjusted earnings soared 245% year-over-year to $1.45 per share, up from $0.42 per share in the same quarter a year ago. Analysts were expecting adjusted earnings of $0.83 per share, so LOGI topped estimates by 74.7%.
Fourth-quarter sales surged 116.6% year-over-year to $1.54 billion, which also beat analysts’ expectations for $1.1 billion. For its fiscal year 20201, Logitech also achieved total sales of $5.25 billion, or 74% annual sales growth, and adjusted earnings of $6.42 per share, or 199% annual earnings growth.
Company management commented, “Fiscal year 2021 was our best year ever. It has been rewarding to see Logitech’s products play an essential role, enabling work, creation, connection and entertainment.”
Given the strong finish to its fiscal year 2021, Logitech upped its guidance for fiscal year 2022. The company now expects full-year earnings between $800 million and $850 million, up from previous guidance for $750 million to $800 million.
Tech Stocks That Could Double #4: NIU Technologies (NIU)
As you probably know, China has an air pollution problem, especially in its overpopulated cities. Interestingly, the coronavirus lockdown reduced air pollution in China by an average 48%. However, pollution levels are climbing again, as manufacturing restarted and folks began driving to work when the lockdown restrictions were eased.
As a result, there’s still a very strong demand for environmentally friendly transportation options in China—and that’s exactly NIU Technologies (NIU) excels.
NIU Technologies was founded in 2014 to develop smart electric scooters. The company’s current portfolio includes seven series of smart e-scooters, including Gova, MQi, NIU Aero, NQi, RQi and TQi. Niu Technologies also designed a 4th generation NIU Energy lithium battery that is light-weight for two-wheel vehicles and provides longer range and battery life.
So far, NIU Technologies has sold more than one million smart e-scooters around the world. The company has more than 1,050 stores in 181 Chinese cities. It also operates in 38 countries, with more than 25 distributors.
The growing worldwide demand for electric scooters and bicycles is exploding, as they are viewed as a replacement for a car in many urban areas. And this rising demand has added handsomely to NIU Technologies’ top and bottom lines.
For its first quarter in fiscal year 2021, NIU Technologies saw total volume of the company’s e-scooter sales surge 272.6% during the quarter. NIU Technologies sold 149,649 e-scooters, with 144,654 e-scooters sold in China. The company also now has 1,916 stores in China and a distribution network that covers 48 countries.
First-quarter revenue soared 135% year-over-year to RMB 547.3 million, and adjusted earnings jumped to RMB 6.7 million, up from an earnings loss in the same quarter a year ago. Adjusted earnings per ADS came in at $0.01, which missed analysts’ estimates for $0.04 per ADS by 75%.
Looking forward to the second quarter, NIU Technologies expects revenue between RMB 900 million and RMB 1.03 billion, which represents 40% to 60% year-over-year revenue growth.
Tech Stocks That Could Double #5: Pinterest, Inc. (PINS)
Pinterest, Inc. (PINS) is not your typical social media platform: it is all about inspiring people. With folks spending the better part of the past year at home, this platform was more attractive than ever, as folks looked for inspiration for “do-it-yourself” projects, home décor, home office setups and even recipes.
You can think of Pinterest, Inc. as a visual discovery search engine.
If you’ve never used Pinterest, it can most simply be described as an online vision board. You can “pin” images, videos and GIFs that you find inspiring. This can range from inspirational quotes to new recipes to try, from kitchen design ideas to garden planting tips, from “do-it-yourself” solutions to wedding planning ideas, from bucket list travel locations to fitness tips.
Based on Pinterest’s latest data, many folks turned to the company’s online platform for inspiration as they were “nesting” at home in 2020. In fact, Pinterest added more than 100 million monthly active users last year, and the company now has more than 450 million monthly active users from around the globe.
As a result, “First-quarter results were strong, building off the momentum of 2020. Continued rapid growth of our international business and increased adoption from medium and small advertisers drove 78% year-over-year revenue growth.”
Pinterest reported first-quarter earnings of $78.53 million, or $0.11 per share, and revenue of $485.23 million, which is up from an earnings loss of $59.92 million, or an earnings per share loss of $0.10, and revenue of $217.94 million in the first quarter of 2020. Analysts were expecting earnings of $0.07 per share on $473.66 million, so PINS beat earnings estimates by 57.1% and revenue forecasts by 2.4%.
Tech Stocks That Could Double #6: Zedge, Inc. (ZDGE)
Zedge, Inc. (ZDGE) is the leading provider of smartphone personalization services. Simply put, if you’re like most folks, then you may have personalized your cell phone, whether it’s with pictures on your lock and home screens or a specific ringtone. Zedge offers even more ways to make your smartphone better represent your personality.
The company operates a personalization app that provides ringtones, notification sounds, wallpapers and videos for your smartphone. Zedge has more than 30 million monthly active users, and its app has more than 450 million downloads. It offers free and paid options, too. As a result, the company boasts that the Zedge app has been listed in the Top 25 free apps on Google Play over the past seven years.
Thanks to strong demand for its personalization services, Zedge achieved record results in its second quarter in fiscal year 2021, which was released in mid-March. Second-quarter revenue soared 101% year-over-year to $5.3 million, up from $2.6 million in the same quarter a year ago. The company noted that active subscriptions also jumped 138.6% year-over-year. Second-quarter earnings per share surged 1,600% year-over-year to $0.17, which crushed estimates for $0.04 per share by 325%.
Zedge noted that the third and fourth quarters are typically weaker for the company, but it still upped its fiscal year 2021 outlook, expecting revenue to increase 75% to 80%.
For the third quarter, the analyst community is expecting earnings of $0.04 per share and revenue of $3.77 million. That’s up from revenue of $2.1 million and an earnings per share loss of $0.03 in the third quarter of fiscal year 2020. ZDGE is a good, but speculative buy.
BONUS: The A.I. “Master Key”
Thanks to the magic of scalability – the ability of a business to massively grow revenues while minimally growing costs – no other kind of business can create great wealth in a short time like a technology business.
This is especially true when a massive technological innovation comes along. And that’s exactly what we’re seeing now with artificial intelligence (A.I.).
To many folks, A.I. sounds like something futuristic…and hypothetical. But, in fact, practically everyone uses A.I. every day. According to Pegasystems (a Boston-area software company), 84% of people use A.I. devices and services. The top applications
were email spam filters, Google (GOOGL) search, and Apple’s (AAPL) Siri “personal assistant.”
Here are a few more examples that should sound familiar:
- If you have an Android, Microsoft (MSFT) or Amazon (AMZN) device, there’s Google Assistant, Cortana and Alexa, respectively.
- Netflix (NFLX) uses A.I. to recommend movies and TV shows for you.
- Zillow (Z), the online real-estate listings, gives you a price “Zestimate” that’s based on A.I. Then, Zillow also uses A.I. to recommend similar houses.
- TurboTax, Quickbooks and Mint – which all come from Intuit (INTU) – use A.I., too. That’s how QuickBooks Assistant can track your business expenses automatically. And they’re even working on a TurboTax app that can do your taxes automatically, too!
- If you’ve ordered food from Domino’s Pizza (DPZ), Dunkin’ Donuts (DNKN), and even Denny’s (DENN), your order may have been taken by A.I. Chipotle Mexican Grill (CMG) just rolled out
A.I. ordering, too…and the list goes on.
In this new world of A.I. everywhere, data becomes a hot commodity.
“Data is the New Oil”
As scientists find even more applications for artificial intelligence – from hospitals to retail to self-driving cars – it’s incredible to imagine how much data will be involved.
To create A.I. programs in the first place, tech companies must collect vast amounts of data on human decisions. Data is what powers every A.I. system. As one A.I. researcher from the University of South Florida puts it, “data is the new oil.”
So, as investors, if we want to buy the right stocks to ride the A.I. trend, all we have to do is look back at the oil boom of the 2000s.
Back in 2003, if investors believed that crude oil was set for a big price rise, they had a handful of different vehicles to choose from. They could buy speculative futures contracts… they could buy a small oil company exploring for oil in some remote
jungle… or they could have bought shares in Core Laboratories (CLB).
Core did no drilling or exploration of its own. It provided technology to the companies who did. So, rather than take on the risk of owning shares in a company looking for oil in just a handful of places, a Core Laboratories investor could sleep soundly.
They knew the company was collecting a steady stream of money from a huge number of oil companies.
As oil prices climbed from $30 per barrel in 2003 to $100 per barrel in 2008, Core’s customers had more money to spend on exploration. Core’s revenues surged… and CLB stock went from $5 per share to $60 per share… a gain in market value of 1,100%.
Now, picture an industry like Big Oil as a huge skyscraper with lots of offices. By buying stock in an individual oil company, it’s like having a key to one of those offices. By buying Core Laboratories, it’s like having a “Master Key” to all of them.
“The A.I. Master Key”
Core Laboratories was the Master Key to the 2000s oil boom. And here, the Master Key is the company that makes the “brain” that all A.I. software needs to function, spot patterns, and interpret data.
It’s known as the “Volta Chip” – and it’s what makes the A.I. revolution possible.
Some of the biggest players in elite investing circles have large stakes in the A.I. Master Key:
- Ron Baron, billionaire money manager with one of the biggest estates in the Hamptons.
- Ken Fisher, author of The Ten Roads to Riches and other bestsellers, who’s made the Forbes 400 Richest Americans list.
- Mario Gabelli, namesake of the Gabelli Funds, with a salary of $85 million for one year – Wall Street’s highest paid CEO.
None of them, however, are programmers…or any kind of tech guru. You don’t need to be an A.I. expert to take part. I’ve got everything you need to know, as well as my buy recommendation, in Growth Investor.
As a thank you for reading this special report, I’d like you to have my free briefing on this groundbreaking innovation. Click here for more details.