At this point, it seems like everyone is trying to find “the next Google (GOOGL)” – and there’s a good reason for that. The stock has gained an incredible 2,800% in 16 years since the IPO:
Still today, owning GOOGL is a nice feather in your cap. Here in 2020, for instance, shares are up about 10%, whereas the broader S&P 500 is up about 4%.
But, for gains like the one shown above, you’ve got to invest in a company before it takes over the world. That’s what we’re aiming to do with my Breakthrough Stocks system, and on Wednesday, September 30 at 4 p.m. ET. Click here to RSVP for my free Moneyball Multiplier Challenge.
In some ways, the landscape has changed a lot since August 19, 2004, when Google was just another hot IPO. Apple (AAPL) was still down in the dumps, pre-iPhone. Netflix (NFLX) was a small DVD mail-order service, and Facebook (FB) was still a niche site for Ivy League students.
This was before Google itself launched many of its own game-changers, like the Android operating system, or Google Docs; even Gmail was still in beta-testing. At its IPO, GOOGL was essentially a search-engine company competing with Yahoo, which was twice its size. When Google went public with a price-to-earnings ratio of 80, the IPO was widely panned as crazy expensive and overhyped.
Then, in October 2005, GOOGL became a great buy in my stock grading system. It rated highly on its earnings growth, and the company’s secondary stock offering was popular with the “smart money” on Wall Street. Those are the classic signs of a great stock buy. I also saw that Google would soon qualify for the S&P 500 – another huge catalyst for stock gains, then and now.
The result, as Mark Hulbert wrote for MarketWatch, is that I was “one of the very first to recognize Google’s long-term potential” when I recommended GOOGL in those early days:
I’m also proud of the call I made in that very same article, where I predicted Google-like gains for NVIDIA Corporation (NVDA). Already since that interview, shares of NVDA have soared over 500%. It’s one of my favorite holdings for Growth Investor, where I’m expecting great things still to come for this chipmaker.
There’s one simple reason why I’m so confident in these bold predictions: I’ve got a proven system for spotting market-beating stocks.
Whether it’s NVIDIA in 2016 or Google in 2005, the signs of a great buy are always the same, in my book:
1. The company simply has to display solid fundamentals. A lot of companies – particularly among small caps – can deliver hot sales growth…for a time. I also want to see solid earnings growth, operating margins, upward revisions by Wall Street analysts, and a history of beating those expectations.
That’s when you know a stock has real staying power. I’ll talk more in-depth about the importance of fundamentals during my interview at the Moneyball Multiplier Challenge. (That’s something I rarely do outside of my paid services!)
2. I want to see a strong Quantitative Score, which basically suggests that the stock’s attracting big money on Wall Street. Think of this as “following the money.” The more money that floods into a stock, the more momentum a stock has to rise.
When you see those signs, that’s how you can invest confidently in “the next Google” during its early days.
Note: The types of strategies I use are normally reserved for the rich and well connected, because the other “quant” guys out there tend to get comfortable on Wall Street. Me, I prefer my homes in Palm Beach and Reno, Nevada, and time spent with my family there.
But on Wednesday, you can hear all about the formula I use to beat the market – for free. Just click here to put your name down for my Moneyball Multiplier Challenge on Wednesday, Sept. 30, at 4 p.m. ET.
Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owned the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Google (GOOG), Facebook (FB), NVIDIA Corporation (NVDA).