Revealed: Nathan Slaughter's Top Stock for 2011

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It never ceases to amaze me. Each January, my staff and I breath a collective sigh of relief with the start of each new year. It's not because we're glad the holidays are over, but rather because it means that the exhaustive research we put into our annual Top 10 issue for my Market Advisor newsletter is finally over.

You see, my staff and I put in countless hours, starting months in advance to ensure that the annual Top 10 issue has only the absolute best picks that we think will pummel the market in the coming year.

After all, we've got a lot to live up to. StreetAuthority co-founder Paul Tracy started this tradition for Market Advisor  back in December 2002. Incidentally, that inaugural list of recommendations went on to deliver an impressive return of 38.4% in the next 12 months. And every December since, my team and I have presented readers with a fresh batch of our best and brightest ideas for the year ahead. 

Aside from the crash of 2008, these picks have outpaced thebenchmark S&P 500 every single year -- and by no smallmargin .



For those of you keeping score, Market Advisor's annual "Top-10 Stocks" have posted a cumulative return of 99%, easily besting the 45% return of the overall market.

Along the way, we have dug up some real gems for readers. In 2009, we flagged Grupo Aeroportuario del Pacific (NYSE: PAC ) , which went on to gain 45.8% . Last year's list included Skyworks Solutions (Nasdaq: SWKS ) , which is currently up more than 83% .

And those stellar performers were far from being the only winners of the bunch.

With all this in mind, my readers have been clammoring to know what I've got in store for 2011. And if you're not one of my subscribers, well, you're in luck. Last year, I decided to share the name of one finalist with the public. That pick, Silver Wheaton (NYSE: SLW ) , has soared 139% since January 1.

I'm expecting even bigger things out of one of my top picks for this year, a small company called  Augme Technologies ( AUGT ) . Simply put, I think it could be one of Market Advisor's best picks ever.

Here's why...

Google has built a $200 billion empire on the back of online advertising. But consider this: nobody hauls their PC around to the bank or the supermarket. By contrast, we are inseparable from our mobile phones -- so demand to reach consumers through wireless devices could be just as explosive.

There's an avalanche of cash plowing into this sector -- and Augme is right in its path. The company has developed innovative marketing platforms and video content delivery systems that "connect brands to consumers" across all wireless networks.

The firm is revolutionizing ways for businesses to communicate and interact with potential customers. For example, pasta maker Delverde is using Augme's platform in a clever way that lets shoppers at certain grocery stores scan a barcode or text a keyword to unlock fine Italian recipes and wine pairings.

These digital, point-of-sale marketing strategies are highly targeted and reach responsive customers -- attributes for which advertisers are usually willing to pay a premium. Augme has a first-mover advantage protected by valuable patents and its growing customer base includes deep-pocketed clients like HBO, Ralph Lauren (NYSE: RL ) , Colgate Palmolive (NYSE: CL ) and Johnson & Johnson (NYSE: JNJ ) .

At this point, the company is still in the nascent growth stage. Last quarter, it generated just $718,717 in revenue -- about what Google probably spent on postage. But that small size can be an asset...

Investors love double-digit growth and salivate over triple-digits. But almost never do you see quadruple-digit growth. Yet, the revenue I just mentioned represented a jaw-dropping 1,700% increase compared with the same quarter last year.

It's pretty easy to move the needle when you're raking in less than $1 million per quarter and you're at the vanguard of a briskly growing niche. From nothing a few years ago, mobile advertising is projected to be a $5 billion market by 2012.

Action to Take --> Right now, Augme already has $20 million in signed bookings and commitments in the sales pipeline. Even if just half of that is converted, the company could still take in $10 million in the next year. That type of potential makes it much easier to swallow the dilution that comes with a young company issuing stock to raise capital (the share base has swelled from 13 million to 56 million in the past four years).

The stock is best suited for aggressive investors willing to shoulder some volatility. But the rewards could be huge -- Augme has "multi-bagger" written all over it.

[ Note: While I think Agume may turn out to be one of our best picks ever, it's just the beginning of what my  Market Advisor  newsletter has in store for 2011. A leading "green agriculture" firm in China... a way toprofit from my "shocking" predicion for a jobs recovery... a "dirt-cheap" blue chip that could deliver 40% gains and pay a generousdividend to boot -- these are just a few of the picks I've singeld out for 2011. If you'd like to find out more about my picks for 2011, please read this memo .]


-- Nathan Slaughter

Disclosure: Neither Nathan Slaughter nor StreetAuthority, LLC hold positions in any securities mentioned in this article.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.


This article appears in: Investing , Investing Ideas

Referenced Stocks: AUGT , PAC , RL , SLW , SWKS

Nathan Slaughter

Nathan Slaughter

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