When Money Morning's Chief Investment Strategist Keith Fitz-Gerald first recommended one of his top stock picks in October, he set a growth estimate of 1,358%.
But he's making a correction. That initial estimate was too low.
Fitz-Gerald now sees this stock climbing 1,417%. The tech stock opened today at just $1.44 per share. But by 2020, Fitz-Gerald sees it climbing to $21.85 per share.
You see, this company is tied to one of the most dynamic of Fitz-Gerald's Total Wealth trends: human augmentation. That's why it makes our list of top stock picks...
"The Most Inspirational Visit I've Ever Made"
The company develops robotic exoskeletons. Basically, they're suits that allow people with severe mobility issues, stroke victims, and those with spinal trauma to walk again.
To get a better idea of how the company operates, Fitz-Gerald paid a visit to their California headquarters.
"My trip to this tiny company was quite simply the most inspirational visit I've ever made to any company... in any industry... anywhere in the world," he said.
While this company has competitors, what Fitz-Gerald saw from the firm was unique. Normally, these suits require hours of learning and fitting. This company's products were much easier to use. In fact, the demonstrator took less than five minutes to get acclimated. The suits also adapt to different wearers with just the push of a button.
And these suits have more than just medical applications.
"Much of the stuff they're doing in this area today centers on making soldiers stronger and increasing their work capacity in combat situations," Fitz-Gerald said. "Load-carrying capacity is especially critical, for example, when you consider the average load out for a Marine these days is well over 100 pounds."
That's caught the attention of major military spenders.
The company has licensed technology to Lockheed Martin Corp. (NYSE: LMT) and has received more than $35 million in research grants from the Department of Defense.
"The company was recently selected by Google's Boston Dynamics to continue developing technology for DARPA's Warrior Web Task A project," Fitz-Gerald explained. "Furthermore, it has partnerships with the United States Special Operations Command and medical rehabilitation experts, including the Rehab Institute of Chicago, Kessler, and Glostrup Hospital."
The fact that it's working with both government agencies and the private sector is a major bullish sign for this tech stock to buy. And it's one of the reasons Fitz-Gerald sees it commanding 25% of the human augmentation market.
Top Stock Picks: "A Great Investment in the Future of Humankind"
The pick is Ekso Bionics Holdings Inc. (OTCBB: EKSO).
"When I first recommended the stock, I believed that EKSO will capture 25% of the human augmentation market," Fitz-Gerald said. "That's still true. What's changed is my thinking on profit margin, and that's based not only on what EKSO itself is doing, but on what's happening in the broader industry itself."
Through the first three quarters of 2014, EKSO shipped 46 of its GT exoskeletons. That was a 250% increase from the first nine months of 2013.
Keith's New EKSO Share Projections
- EKSO is able to capture 25% market share, resulting in $450 million of revenue.
- Assume an 11.6% profit margin (the average of its industry: Medical Instruments and Supplies).
- Therefore, the company would achieve (from the medical devices segment alone) net income of $52.2 million.
- Assuming no additional share dilution, there would be 78.61 million shares outstanding.
- Therefore, earnings of $0.664 per share.
- PE ratio of 32.9 (based on industry average)
- Therefore, a potential share price of $21.85 by 2020, which represents a 1,417% gain from today's price of $1.44/share.
Plus, a non-profit known as SoldierSocks has agreed to order 80 GTs over the next three years, after purchasing an initial 10.
"My new price is $21.85 a share by 2020 rather than the $21.14 a share I originally predicted," Fitz-Gerald said. "Not surprisingly, I'm more excited about the company's profit potential than I've ever been before."
Fitz-Gerald said investors should expect high volatility from EKSO in the short term, for these three reasons:
- "EKSO was founded in 2005 and has a market cap of merely $95 million. It's a micro-cap in the truest sense of the word. It's only natural that it's going to have a broader trading range and attract the kind of day-trading gamesmanship we're seeing. Eventually that will get bled out as the company attracts more capital and more success."
- "The company has more than 150 international patents with 10 U.S. patents granted and another eight filed. This gives it an annuity-like revenue stream down the line from partners who license the technology. This is exactly the same "racket" pharma companies use to lock in hundreds of millions of dollars each year even though the drugs they're bringing to market aren't quite ready... yet."
- "The company is pushing boundaries that its more entrenched competitors, Cyberdyne Inc. (TYO: 7779) and ReWalk Robotics Ltd. (Nasdaq: RWLK) can't. As great as those two companies are, what they're doing really isn't entirely new, but rather small and incremental improvements to existing technology. So EKSO's got more upside by virtue of the fact that it's leapfrogging current thinking and industry standards. It's no wonder the company's latest financial data reflects this."
That licensing model is one of the biggest reasons EKSO made Fitz-Gerald's list of top stock picks.
The company recently partnered with Ottobock, a global prosthetics and neuro-rehabilitation company. Now, EKSO has licensed two products to Ottobock in return for royalty payments.
"This made the news, but it wasn't covered as the jaw-dropping development I'm telling you it is," Fitz-Gerald said. "Ottobock is a giant in the prosthetics market, with subsidiaries in 49 countries. It's been around since 1919, and it brought in 861.3 million euros in sales in 2013. Now it's paying tribute to an upstart that isn't even 10 years old yet, but is already causing ripples in the human augmentation sector. Neither ReWalk nor Cyberdyne are seeing similar developments with this kind of scalable potential to my knowledge."
The play might be speculative, but according to Fitz-Gerald the profit potential is undeniable. The stock is perfect for investors willing to take on some risk and wait out short-term volatility.
"EKSO is not just a great investment for your financial future," Fitz-Gerald said. "It's a great investment for the future of humankind."
Make 2015 Your Wealthiest Year Yet: Get in the best financial shape of your life with this guide to money making in 2015. You'll get the three bad investing habits to dump immediately, the single most effective strategy to maximize returns, and five stocks to get started on the road to wealth...
Follow me on Twitter @KyleAndersonMM.