Perhaps the most important advantage of big business is economy of scale. The more units you can move, the cheaper each unit becomes to produce.
That's why Budweiser will always be cheaper than a local craft beer. And a dining table from Pottery Barn will always be cheaper than one you commission from a local artisan.
The problem, though, is that many people like local craft beers, and they like unique furniture.
They just don't always like the price tag associated with products that aren't mass-produced.
Our stock pick today has solved this problem. It's essentially invented a new industry called "mass customization."
From printing products to signage, apparel, glassware, and other products, this company enables customers to make small orders to their exact specifications. And because customization is the product, the company can deliver it quickly at an affordable price point.
As a result, small businesses now have access to the same quality custom products that large corporations do without having to pay a premium for placing small orders.
And the orders are rolling in. The company's sales are projected to hit $2.7 billion this fiscal year and more than $2.9 billion in the 2020 calendar year.
More than that, earnings per share (EPS) is projected to more than triple between 2018 and 2022.
With projections on the rise, this company's biggest growth phase yet has just begun.
From a One-Man Operation to $3 Billion in Sales in 25 years
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Cimpress NV (NASDAQ: CMPR) started out as a small operation. Founded as Bonne Impression in 1994, the company was initially run from founder Robert Keane's Paris apartment.
The enterprise became the first to let clients manipulate graphics directly in their web browsers for printing. And it was the first company to use software to aggregate individual orders into large batches in order to bring production costs down.
Today Cimpress employs over 10,000 people on five continents.
It's best known for its core brand, Vistaprint, which offers custom-printed items like stationery, business cards, T-shirts, and bags. But a number of strategic acquisitions have given Cimpress a dominant presence in the mass customization market.
Last year, for example, Cimpress acquired BuildASign. It's an Internet-based company that offers large-scale custom printing products like canvas prints, license plates, or political signs.
Then there's VIDA, a San Francisco company also acquired in 2018. It specializes in apparel, accessories, and home décor from world-class artists and designers.
In every case, Cimpress' subsidiaries remain autonomous. But access to the parent company's technology and strategic capabilities allows each brand to streamline operations and boost productivity.
The model has been fantastically successful. Cimpress' revenue has risen every year since 2000, surpassing $1 billion in 2012 and $2 billion in 2017. And if projections hold up, Cimpress will hit $3 billion within the next couple years.
In spite of that growth, investors have soured on the stock due to some subpar earnings reports recently. In spite of significant growth in each of the last two quarters from the year before, EPS missed expectations by 9% and 47.5%, respectively.
Before you let that scare you away from Cimpress stock, it's worth pointing out the company has been implementing a comprehensive new strategy for the last year or so. The idea, the company says, is to "stay small as we get big" by emphasizing regional teams over centralized management.
In spite of the setbacks in the last few quarters, it looks like the strategy is starting to work in a big way.
Which is why now might be the best time ever to snatch up your shares...
Now Is the Time to Buy CMPR
CMPR shares are down a little more than 30% over the last 12 months. But they've rebounded from a low near $75 in late March to just over $95 today.
That's because earnings estimates have been on the rise. According to FactSet, two out of three analysts upgraded their estimates in June, reversing their direction from just three months ago.
According to FactSet, the company's EPS is projected to rise from $1.36 in the 2018 fiscal year to $5.10 in 2022. That's 275% in four years, including an expected 81.6% rise for the current year.
And in spite of disappointing quarterly reports, Cimpress has still managed to boost its net operating cash flow and free cash flow in each of the last two years. Using the last 12 months ending in March (the fiscal year ends in June), net operating cash flow is up 70.7% since 2017, and free cash flow is up 138.4%. That puts the company in a strong position as it regains its footing.
So now that the naysayers are quieting down, now is the perfect time to get your shares as they regain upward momentum.
And if you're looking for more ways to profit, we've got you covered...
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About the Author
Stephen Mack has been writing about economics and finance since 2011. He contributed material for the best-selling books Aftershock and The Aftershock Investor. He lives in Baltimore, Maryland.