The Most Interesting Company You Have Never Heard Of
Written by Jay Turo on Monday, October 12, 2009
Tired of reading about the same over-shopped, over-hyped, over-followed technology companies? Intel. Cisco. Dell. Microsoft. Even Google, Amazon, and Apple.
All great companies for sure but the under-reported truth is that the real money has already been made on them. They are already big and famous and have lots and lots of smart people following and trading them. As investment opportunities, they are yesterday's news.
Hot Technologies of the Next 10 Years
Now, if you want to make real returns, you need to identify the growth stories of the next 10 years. Companies that are early in their lifecycle. Ones that have protected positions in fast growing market niches.
And you need to invest in them BEFORE everyone and their Uncle knows about them.
How To Do It
It is really as simple as 1 - 2 - 3.
First, find a dynamic growth industry. Second, identify a company within it that is well-positioned to grow as the industry does - the proverbial "boat lifted by the rising tide." And finally, investigate the company's guts - its technology, its historical and projected financials, and most importantly, the quality and determination of its management.
Solid State Drives - A Classic Next Generation Technology Play
Let's take a look at the solid state drive (SSDs) business. Solid state drives, based on computer memory rather than a rotating disk, are replacing traditional hard disk drives at an increasingly rapid clip.
This is a technology transition not unlike when we moved from cassette tapes and LP records to compact discs, or from compact discs to MP3 players. The basic idea is accomplish the same functionality - in this case electronic data storage - and to do so faster, more reliably, and with lower power consumption.
Well this transition is happening in the SSD industry big time. The industry as a whole is growing at a rate of over 80%/year (IDC).
IDC further estimates that the market for SSD devices will grow from $932 million in 2009 to $5.6 billion in 2012. Other industry analysts take a similar view, with some foreseeing over 100% annual market growth for a number of years as the technology transition heats up.
Ok This Makes Sense - Now What Do We Do?
Now let's find a company uniquely well-positioned within this industry. It would be even better if this company was one that not a lot of people know about, yet already has GREAT products that consumers love.
And even better - suppose this company was not a dreamy-eyed startup but one with a 7-year history of going from startup in 2002 to over $150 million in revenues last year?
Finally, dig a little below the surface and get a sense of their plan for growth. Are they thoughtful in all their business aspects - technological, marketing, operations? Is management both intense and mature? Can they protect their place in their market niche from the big boys? And most importantly, can they grow as the industry around them grows?
If you can find a company that has this kind of 1 - 2 - 3 logic, and if you can get in on it at the right price, you have something special.
How To Find a Company Like This?
Well guess what, we are right now connected with a company like this. One on the verge of having its shares publicly traded, and one that is looking to connect with a select group of investors to fuel its growth.
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