One of the worst things an investor can do is "set it and forget it" when it comes to your money - especially in today's markets when "buy and hold" is more akin to "buy and hope."
Buy and manage is what you want to do in the name of profits.
That way you never lose touch - not with your expectations, not with an investment you've chosen, and certainly not with your money.
A Race Between Patience and Profitability
I hear from tens of thousands of investors who want a stock to go ballistic the moment they buy it.
I'm no different.
In fact, I'm hard-pressed to think of anything I love more than the rush that comes with watching a stock I've recommended take off because I know that readers who are following along are making a killing.
It's why we're all here.
That's why a stock like Ekso can be so exciting and so frustrating at the same time.
Over the years, I've seen plenty of companies like Ekso, so I've learned to balance a good deal of patience with profitability. Admittedly, that's not always easy.
Take Quality Systems Inc. (Nasdaq: QSII), for example.
The company's stock languished from January 1997 to March 1998 in a nearly flat and very tight trading band that had to make more than a few shareholders question their investment when you consider that the S&P 500 returned more than 47% over the same time frame. Worse, the stock actually dropped to enter the 21st century with gains of just $0.03 per share even though the S&P 500 had doubled!
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Skittish investors bailed in a move they would come to regret.
It turns out that QSII was taking steps very similar to those EKSO is taking today. Senior executives were positioning the company to capture a much bigger prize that was not immediately apparent - the shift to cloud computing.
That seems obvious today, but back then QSII made a very deliberate pivot to capture the thousands of hospitals and medical care providers who needed to... who had to... shift to cloud computing to keep costs down and efficiency up. Earnings soared an extraordinary 344% from fiscal year 2000 to fiscal year 2001 as the company led the revolution driving two of our Unstoppable Trends - Medicine and Technology.
Only five years later the stock reached $22 a share in January 2006. Investors who stuck with it laughed all the way to the bank for having the extraordinary patience to clean up with a 3,135% gain that turned every $1,000 invested into more than $32,350.
Monster Beverage Corp. (Nasdaq: MNST) is another one that didn't feel like a winner to early investors, either...
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The company spent the four years from 1999 to mid-2003 drifting between $0.20 and $0.35 a share before making a shrewd pivot to move in on another of our Unstoppable Trends: Demographics.
Not many people noticed at the time, but energy drink consumption among Americans soared 5,000% from 2000-2014, while energy drink sales rose from $3.8 billion in 1999 to $27.5 billion in 2014, according to Quartz. But I'll guarantee you that MNST shareholders did.
The stock eventually returned more than 89,900% from 1999 levels, turning every $1,000 invested into $890,000 by August 2016.
I believe Ekso has the same kind of potential.
To that end, CEO Thomas Looby is doing exactly what I expected he would do when he assumed command, which is pivot the company from lower profitability segments to segments with higher profitability and much bigger potential markets. He's an expert in commercialization and that's why he was put in place at the helm.
The numbers, of course, reflect what he's doing and his progress, even though the share price doesn't... yet.
- Device revenue for Ekso is up 36.36% year over year for the most recent quarter, even as the company underwent a strategic shift from engineering service revenue to more profitable sectors like medical devices.
- Ekso's device revenue growth is long term, up more than 250% in the first nine months of 2016 to $11.2 million versus the $3.1 million it posted in the first three quarters of 2015.
- Research and development expenses are up 48%, too. However, they're not growing anywhere near as fast as revenue, which is good because it means the company is spending wisely.
- Cash on hand as of Sept. 30, 2016, totaled $12.8 million, up sharply from the $7.2 million Ekso possessed when I first recommended the company. It's a strong sign that the company has not just the vision but the resources to succeed.
At the end of the day, EKSO stock is still a speculative holding and you should treat it as such when it comes to your portfolio. That means not betting the farm and not going overboard when it comes to augmenting your core investments.
Patience is not just a virtue, as the old saying goes. In this case, I think it's also a path to profits...
...one augmented step at a time.
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About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.