Last month at Hidden Profits, we delved into the world of cryptocurrency and blockchain technology. I uncovered a stock selection that operates a real business in the blockchain world and is poised for major returns going forward.
Whatever bitcoin does, this stock could do much better. And, if bitcoin falters, this stock has true underlying value to support the share price.
While cryptocurrency is all the rage, there are opportunities for quick profits in more traditional financial company.
This month we rewind the clock and discuss a financial innovation that’s been around for two decades. Yet it’s poised for a new growth spurt due to changing demographics and the way people invest. Power will increasingly be consolidated in just a few hands.
The March Hidden Profits selection has recently hit a rough patch. As a result, the stock has been spanked, even as the overall market recovers to new highs.
So, what’s to like?
Well, if it were all champagne and caviar there would be little opportunity to outperform the markets. We must uncover the potential where others only see clouds on the horizon.
We must identify the hidden profit.
Here we have an opportunity to own a major player in a growth industry where barriers to entry are becoming more pronounced. If you don’t have scale and distribution in today’s world, it’ll be almost impossible to compete in the future. That’s because regulations and compliance have made it costlier to operate and keep the smaller, more innovative firms at bay.
This company has a legendary investor as a key operator in the business. I’ve expressed my bearishness about the stock market in Economy & Markets before, because it’s well known that valuations are stretched and market sentiment too bullish.
So, this late in the cycle, if I’m going to be long a stock, I want to be riding the coattails of the very best operators – the billionaires that made their billions building something from the ground up, not levering up and borrowing $10 billion to make a quick 10% and pocket$1 billion.
We have that opportunity here. And the best part is that I think this company is ripe for a takeover. As the industry evolves and hits its next phase, the scale and distribution capabilities of our stock pick will be crucial to the major players. It’s simply too attractive to not consider if you’re one of the three of four biggest firms in the industry.
These opportunities do not get ignored for too long.
I think an acquisition could happen sooner than later and if that does indeed happen could lead to a 35% to 50% gain in fairly short order.
John Del Vecchio
Editor, Hidden Profits