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What Stock Could Be the Next Microsoft? Hint: It Reports Earnings Soon + Lee’s take on MSFT, AAPL, IBM, WMT, AZO, NVDA, CELG, V, WFMI, DIS, SLE, ABT, GSK, JNJ, GM, SHLD, PHM, WMI, CWST, RSG, MORN, and CXW |
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InvestorsObserver
Featured
Contributor
Lee M. Allen
We are at the tail end of Wall Street’s illustrious quarterly earnings season and it seems like all the big, high-profile stocks have hung out their dirty laundry. The likes of Microsoft (MSFT), Apple (AAPL), International Business Machines (IBM) and Wal-Mart (WMT) have all hung out their soiled underwear for us to see.
That leaves just a few of the stragglers to show us their quarterly report cards in the next few weeks. But sometimes these below-the-radar companies like can surprise investors.
Don’t forget those behemoth companies were once little baby companies. Even Hewlett-Packard (HPQ) started in a garage. Wouldn’t it be great if you could spot one of these potential winners early before they become big?
You could be the one who picks a stock selling now for less than $15 a share, buy five hundred shares and, in ten years, after a few splits, buyouts, acquisitions, SEC investigations, various lawsuits, global expansion, etc., you could look back in your brokerage account to find your holdings in the stock are worth over $2 million.
Don’t laugh… It could happen. And I may have stumbled on to just the stock…
Read on for more of Lee’s insights into the next potential stock market winner... |
Did not invest in the next
hot stock
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A few years back, people talked about how $10,000 invested in Microsoft would have made you pretty close to a millionaire when that company’s stock peaked. These kinds of stories didn’t happen every day. When they do, people who didn’t buy the stock go around slapping their foreheads complaining how they should have bought the stock.
Your next car if you don’t invest in this stock
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First off, let me tell you right up front: I don’t own any of this stock. It might be a conflict with my natural journalistic integrity to own a stock like this when I talk about it. Not that I wouldn’t like to buy some shares. I just haven’t found a broker that will let me buy stock with a Visa (V) credit card.
The company I am talking about is scheduled to report earnings in the first few weeks of May and I’ll give you a hint… It’s not Whole Foods (WFMI), Disney (DIS) or Sara Lee (SLE).
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Don’t get me wrong; Sara Lee makes many delicious food products. These are the guys who perfected the whole concept of frozen cheesecake. Someone at Sara Lee should certainly get a Nobel Prize for that achievement. But they probably will not sell enough cakes, pies and Jimmy Dean’s pork sausages to make their stock skyrocket anytime soon. That is, unless someone like Abbott Labs (ABT), GlaxoSmithKline (GSK), or Johnson & Johnson (JNJ) invents a fat-eating pill to undo the pounds these products can add to your mid section. There is also a limit to the number of frozen cheesecakes you can keep in your freezer. This is a true capacity limit.
The company I have on my radar has no capacity limit and a seemingly unlimited number of people to use their products and services.
While a recession can hurt a lot of companies like General Motors (GM), Sears Holdings (SHLD), and Pulte Homes (PHM), this company actually grows in a recession. Many of your big companies rely on a constant flow of customers ready to plunk down cash for their product or service while this company serves people with no cash needed. The people who use the service do not pay for it. Someone else does.
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You could own this boat if you invest in this stock
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For the company I am talking about… The worse the economy gets, the more customers they have dropped off at their front door. I don’t want you to think I am the kind of person who likes to benefit from a sinking economy, but if you are the kind of person who doesn’t mind picking up a few million dollars because the economy is in a temporary little slump, then you just might be interested in this stock.
You can usually spot a potential future stock market winner when the sector they are in did not even exist a few years back. When a new sector emerges, growth could be fast.
The company I’m looking at does have some competitors in its space, but based on market cap, this company is about ten times bigger than its competitors. And in this business, size could matter.
You can search your whole life and not find a company that could be in the most perfect business ever. This company provides a service that nobody really wants to do. But it’s an unfortunate necessity. No; I’m not talking about garbage-hauling companies like Waste Management (WMI), Casella Waste Systems Inc. (CWST), or Republic Services (RSG). But those were good guesses.
Your next boat if you do NOT invest in this stock
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Morningstar (MORN), one of the leading stock analysis companies with many smart people working for them, predicts the potential success of a company based on something they call moats. This refers to the competitive “moat” a company has to protect from others who may want to steal customers. Well… The company I have found builds those moats and does a pretty good job of it. So far, they have built these moats in 19 states and the District of Columbia.
The last time I got this excited about a company was when I wrote about the Hooters restaurant chain. I only mention it now because every time I talk about the wonderful service and great nutritional food at this cutting edge family restaurant with locations all over the country and on most continents, they send me a certificate worth a few baskets of wings. |
But I can assure you that is not the case with this potentially stellar company reporting earnings soon. There are no chicken wings, pizza, or delectable desserts involved here. Once you discover the name of this company, you will see that they do not have gift certificates or provide a service that I personally plan on using at any time.
The CEO and management team of this company are the kinds of people employees listen to and follow orders from the first time. Possibly because they carry guns and have shot guns at the ready. Employees and middle managers who don’t achieve goals may even be sent to a cold, dark place for thirty days with only bread and water to survive on.
Have you guessed it yet? I know it’s probably on the tip of your tongue.
Well wait no more…
The company I’m so jazzed about is Corrections Corporation of America (CXW). This company owns, operates, and manages privatized correctional and detention facilities – better known as prisons - in the United States as well as provides inmate residential and prisoner transportation services for governmental agencies. It also offers healthcare services, including medical, dental, psychiatric and food services. I’m sure their servers are nothing like the fine professional people at Hooters.
Could there be a more perfect stock to add to your portfolio? If this is not a buy-it-and-forget-about-it stock, then I don’t know what is. You’ve seen those movies about the future. There are always more prisons than schools and they never seem to be operated by the government of the day.
In that future, the prisoners are meaner. The guards are better equipped and an ever more scared population of law abiding citizens want nothing to do with getting their hands dirty and running prisons.
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The door to opportunity in the
stock market
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Enter… Corrections Corporation of America…
And, with more and more of your suit and tie Wall Street types turning to a life of crime, there could even be opportunities for Correction Corporation of America. They may start to provide higher end prisons for these executive types.
So, if you buy this stock and in a few years you are cruising along in your yacht, remember where you heard about this. And, since rich people seem to have influence, please talk to your broker and get him let people use credit cards to buy stock. If they did, I might be in the yacht right behind you.
If you have any thoughts on hot stocks no one knows about or have the name of a broker that will let me buy stock with a credit card, please e-mail me at LeeAllen@InvestorsObserver.com.
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