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
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: 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.
For the third quarter in fiscal year 2021, Logitech achieved earnings for $476 million, or $2.45 per share, and revenue of $1.67 billion. That represented 214% year-over-year earnings growth and 85% year-over-year revenue growth. The consensus estimate
called for earnings of $1.02 per share on $1.23 billion in revenue, so Logitech posted a whopping 140.2% earnings surprise and a 35.8% revenue surprise.
Looking forward to fiscal year 2021, Logitech now expects revenue to grow between 57% and 60%, which is up from previous estimates for 35% to 40%. Earnings are now forecast to be about $1.05 billion, compared to previous guidance for $700 million to
Tech Stocks That Could Double #2: 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.
After Clearfield, Inc. smashed analysts’ expectations in its latest earnings announcement, the company management stated, “the first quarter of fiscal 2021 was an exceptionally strong start to our new fiscal year.” And I couldn’t agree more.
For its first quarter in fiscal year 2021, total sales jumped 40% year-over-year to $27.1 million, up from $19.4 million in the same quarter a year ago. Earnings surged 531% year-over-year to $3.2 million, or $0.23 per share, compared to earnings of
$0.5 million, or $0.04 per share, in the first quarter of 2020. The analyst community was expecting earnings of $0.13 per share on $24.75 million in sales, so Clearfield posted a whopping 76.9% earnings surprise and a 9.5% sales surprise.
Clearfield noted that the strong first-quarter results were driven by the strong demand for high-speed internet, as more folks were working from home and students were attending online classes. As such, the company experienced a 71% and 30% increase
in Community Broadband and Multiple-System Operator markets, respectively.
Tech Stocks That Could Double #3: JD.com, Inc. (JD)
Unlike Amazon, JD.com, Inc. (JD) started as a physical storefront. Back in June 1998, Richard Liu opened a small retail unit, JD Multimedia, in Beijing. However, during the SARS outbreak in 2003, Liu saw the opportunity to expand his
business by selling products online. By 2004, all operations were being conducted online and his physical storefront was closed.
Fast forward to today… JD.com is the largest e-commerce platform in China and biggest overall retailer in the country. With more than 700 warehouses throughout the country, JD.com has a fulfillment network that reaches 99% of the entire Chinese population.
And, given the coronavirus pandemic, the company is once again well-positioned to benefit from a surge in online shopping.
Like Amazon, JD.com offers same-day and next-day delivery. The company has more than 360 million active users who have access to local and international products, including clothing, home furnishings and appliances, electronics, fresh food and much
more! In addition, JD.com has strategic partnerships with Tencent and Walmart.
As a result, the company’s business is booming!
At the end of the fourth quarter, JD had 471.9 million active customer accounts, up 30.3% from 362 million at the end of 2019.
For the fourth quarter, JD reported earnings of $0.23 per ADS on $34.4 billion in revenue. That represented 187.5% year-over-year earnings growth and 41% year-over-year revenue growth. The consensus estimate called for earnings of $0.19 per ADS and
revenue of $33.78 billion, so JD posted a 21% earnings surprise and a slight revenue surprise.
During fiscal year 2020, JD achieved revenue of $114.3 billion and earnings of $1.62 per ADS. That compares to analysts’ estimates for full-year revenue of $113.85 billion and earnings of $1.63 per ADS.
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 the fourth quarter, revenue jumped 25.3% year-over-year to RMB 672 million, while adjusted earnings per share rose slightly to RMB 68.6 million. The company noted that it sold 150,465 e-scooters during the quarter, which represented a 41.6% year-over-year
NIU Technologies also reported earnings per ADS of RMB 0.73, or $0.11. The consensus estimate calls for earnings of $0.09 per ADS, so NIU posted a 22.2% earnings surprise.
For fiscal year 2020, NIU Technologies achieved revenue of RMB 2.44 billion and adjusted earnings of RMB 208.3 million. That represented 17.7% annual revenue growth and a slight dip in earnings. Earnings per ADS came in a RMB 2.14, or $0.33. Analysts
were expecting full-year earnings of $0.39 per ADS.
During 2020, NIU Technologies experienced a 42.8% increase in e-scooter sales, with China sales accounting for 86.7% of total sales.
Looking forward, NIU Technologies expects first-quarter revenue between RMB 420 million and RMB 478 million, or 80% to 105% year-over-year revenue growth. The company also expects to sell between 0.9 million and 1.1 million units in 2021, which represented
a 50% to 83% increase.
Tech Stocks That Could Double #5: ServiceNow, Inc. (NOW)
I’ve spotted a just such a technology investment opportunity that’s flying under the radar at the moment but won’t be for long: cloud computing.
Simply put, cloud computing is when you put data on the internet. You can access it anywhere. Say you snap a picture or video on your smartphone. You can use the cloud to view the same picture on your computer through your Google Drive.
The reality is that there is a lot of data that needs to be housed and backed up somewhere. And cloud computing fills that need.
Cloud computing has been on the uptrend for a while now. According to Gartner, for 2019, the public cloud computing market should hit $214.3 billion – a 17.5% year-over-year increase from $182.4 billion in 2018. By 2022, that number should jump another
55% to $331.2 billion.
The company that’s well-positioned to prosper from this demand is ServiceNow, Inc. (NOW). It is a primarily software-based company that manages cloud computing software for information technology (IT) services management and digital
ServiceNow has applications to manage a variety of internal departments—from IT to Security to Human Resources to Customer Service. These apps can be tailored to each company’s specific needs and organizational structure. They are designed to reduce
the amount of time that employees need to hunt around for answers, which also saves them money.
During the fourth quarter in fiscal year 2020, ServiceNow completed 89 transactions that totaled more than $1 million in net new annual contract value. It also ended the quarter with 1,903 customers with more than $1 million in annual contract value.
Fourth-quarter subscription revenue grew 32% year-over-year to $1.18 billion, while total revenue increased 31% year-over-year to $1.25 billion. That topped analysts’ estimates for $1.21 billion. The company also reported fourth-quarter earnings of
$1.17 per share, which topped estimates for $1.05 per share by 11.4%.
For full-year 2020, ServiceNow achieved total revenue of $4.52 billion, or 31% annual revenue growth. Subscription revenue accounted for $4.29 billion, or a 32% year-over-year increase. Full-year earnings per share were $4.63.
Looking forward to the first quarter in fiscal year 2021, ServiceNow expects subscription revenue between $1.275 billion and $1.28 billion. And for full-year 2021, the company looks for subscription revenue between $5.48 billion and $5.5 billion.
Tech Stocks That Could Double #6: Etsy, Inc. (ETSY)
Founded in 2005 to create a community where people can uncover unique items, Etsy, Inc. (ETSY) is an online platform that connects millions of shoppers with sellers of handmade, one-of-a-kind goods and antique items.
The company is based in Brooklyn, New York, but it has buyers and sellers in practically every country around the world. The majority of its buyers and sellers hail from the U.S., Canada, the U.K., Australia, France and Germany. Buyers can search from
more than 60 million items in several retail categories. And sellers have access to a handful of services, including on-site advertising, payment processing, shipping labels and custom websites.
The strategy has been working in Etsy’s favor, as the company unveiled “exceptional” fourth-quarter results. Company management noted, “2020 was an inflection point in history of e-commerce and for Etsy, with millions of buyers choosing us for their
everyday needs as we lived up to our mission to ‘Keep Commerce Human.’”
During the fourth quarter, Etsy captured about 13 million new buyers, as well as reactivated seven million buyers (those who haven’t purchased in a year or more). The company noted that consolidated active buyers jumped 76.7% year-over-year and active
sellers increased 61.7% year-over-year.
Fourth-quarter total revenue soared 128.7% year-over-year to $617.4 million, while earnings surged 374.7% year-over-year to $148.5 million, or $1.08 per share. The consensus estimate called for fourth-quarter earnings of $0.59 per share and revenue
of $515.65 million, so Etsy crushed earnings estimates by a whopping 83% and revenue forecasts by 19.7%.
For fiscal year 2020, Etsy achieved earnings of $2.69 per share and total revenue of $1.73 billion. That represented 254% annual earnings growth and 111% annual revenue growth. These results also topped analysts’ expectations for earnings of $2.12 per
share and revenue of $1.63 billion.
Looking forward, Etsy expects to continue to add to its top and bottom lines. The company expects first-quarter revenue to grow between 125% and 135%.
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,
- 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
“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.