we set the field
. Today, we begin dwindling it down.
Over the coming three days, we will narrow a field of 16
growth stocks down to a "Final Four" on our
Road to the Next Netflix
The purpose is to identify the next stock that could fetch a 432%
return the way Netflix has since we added shares to our
in December 2011.
Today, we eliminate four stocks in trimming our field of stock
mania contenders from 16 to 12. Tomorrow, we'll eliminate four
more stocks to cut the field down to an "Elite Eight." And so
Let's get started!
Internet Content: Trulia (Nasdaq: TRLA) vs. Spark
Networks (Nasdaq: LOV)
Anyone who has shopped for a new home in the last few years is
familiar with Trulia.
It's a leading online residential real estate site showing
properties for sale and rent anywhere in the U.S. The company
attracts 35 million visitors to its website every month, and
revenues have more than doubled in the last year. Riding the wave
of the U.S. housing recovery, the company went public in
September 2012. Since then it has posted a solid 44% gain.
With 90% of all prospective home buyers now starting their
real estate search on the web, Trulia has the makings of a decent
long-term play on that burgeoning sect of the housing market. But
in the short term, the company has too many question marks.
Still in its nascent stages, Trulia has never turned a profit
and the stock trades at a very pricey 102 times 2015 earnings. It
also has to deal with fierce competition from fellow real estate
websites Zillow, Redfin and Realtor.com.
Spark Networks doesn't have that problem. It occupies a niche
market: religiously based online dating sites. The company owns
and operates JDate.com, an online dating site for single Jewish
people, and ChristianMingle.com, an online dating site for single
Christians. Both sites boast strong subscriber growth and
expanding revenues. And neither has to deal with any significant
Unlike Trulia, Spark Networks dominates its space. That means
there's very little standing in the way of rapid and immediate
Winner: Spark Networks
3-D Printing: 3D Systems (
) vs. The ExOne Company (Nasdaq: XONE)
Wall Street loves innovation. That's why these two 3-D
printing stocks have thrived.
Three-dimensional printing - the ability to replicate almost
any solid object - is a relatively new technology that only
recently went mainstream thanks mostly to companies like 3D
Systems and ExOne. 3-D printing allows companies to reproduce
everything from human organs and body parts to simple consumer
objects such as clothes, musical instruments and pizza.
That type of groundbreaking technology is tantalizing. And
that's why investors have been buying these two stocks in
ExOne shares have risen 49% since the company went public in
February 2013. DDD has been on a much bigger tear, rising 360%
since its May 2011 IPO.
Both stocks appear tantalizing. But
ExOne is the better long-term play
3D Systems' biggest gains may be behind it. After more than
two years of rising upwards in a straight line, shares have run
into a brick wall since the calendar flipped to 2014. The stock
has fallen 30% the last three months. Even after such a sizable
pullback, DDD shares are still trading at 47 times forward
ExOne appears to be in a similar position to where 3D Systems
was two years ago - on the brink of becoming profitable (the
company all but broke even last quarter for the first time ever),
and with sales improving 38% last year. It's also less than
one-tenth the size of DDD, so there's plenty of room left to
Bottom line: ExOne appears to be on the brink of making the
same kind of run 3D Systems made the last two years.
Energy Tech: Ormat Technologies (
) vs. First Solar (Nasdaq: FSLR)
With America pushing toward energy independence in 2020,
alternative energy has rarely been more important … or more
Companies that supply wind, solar and other forms of renewable
energy stand to benefit most. Ormat Technologies and First Solar
are prime examples.
Ormat Technologies is a leading provider of geothermal and
recovered energy. The company has a market cap of $1.4 billion
and did $533 million in sales last year.
First Solar is rather self-explanatory: it develops solar
panels, operating many of the world's largest grid-connected
solar power plants.
While both stocks are strong plays on the
alternative energy market
and energy technology, First Solar is the better buy. First Solar
is cheaper than Ormat Technologies, trading at 16 times forward
earnings (ORA has a forward P/E of 25). It also has the wider
profit margin at 10.7%, versus 7.7% for Ormat.
It's close. But First Solar is the energy tech company that
advances to our "Elite Eight."
Winner: First Solar
Gaming Technology: Glu Mobile (Nasdaq: GLUU) vs. Zynga
The video game industry is one of the fastest growing sectors
in the world. U.S. sales alone have tripled in the last 15 years
thanks to the rise of new gaming platforms and software.
With the rise of mobile, now people can play games beyond the
comfort of their homes or the local arcade. People of all ages
can now play games on their iPhones while riding the subway or
standing in line at a deli.
Glu Mobile and Zynga are two of the leading manufacturers of
mobile games. Based in San Francisco, Glu Mobile develops popular
mobile games such as Pirates of Everseas and RoboCop. The
company's sales grew by 32% in 2013.
Thanks to its partnership with Facebook, however, Zynga is the
gaming company with the most potential. Anyone under the age of
18 with a Facebook account is familiar with FarmVille, Zynga's
signature game. As Facebook continues to expand its global
footprint, Zynga will continue to profit from social network
subscribers around the world.
Facebook currently has over 1 billion users worldwide. That
number is projected to swell to 1.8 billion users by 2017 as the
social network establishes a foothold in emerging markets such as
Brazil, Russia and India.
That type of worldwide exposure should fuel Zynga shares in
the years to come.
That's all for today. As our bracket shows, we're down to 12
contenders on the
Road to the Next Netflix
See you back here tomorrow as we trim the field to eight.
Next week, Ian Wyatt is investing $10,000 in the
winning stock of our financial March Madness - the stock with
5-bagger potential he's calling the "Next Netflix." And you can
join him! You see, he's revealing all the details of this stock
and providing a full analysis of its business in a brand new
report that's being released just after the market opens on
Tuesday, April 1st. To make sure you get your hands on this
report - for FREE! - the instant it's published…
click here for all the details.