Start the conversation
Facebook Inc. (NASDAQ: FB) is a tragic prospect for a high-tech investor right now.
On one hand, it's a social-media and digital-advertising juggernaut, and on the other, it's fallen under intense Congressional and media scrutiny, which has caused its stock price to drop roughly 15%. This scrutiny was based on whistleblower comments around the allegations that the company knew that its Instagram app posed a serious mental health challenge for teenage girls.
There are reports that this has slowed the rollout of several upcoming products, according to the Wall Street Journal.
It remains to be seen what the ultimate impact for Facebook and its stock will be, but the sheer size of the digital advertising space - hundreds of billions of dollars - means investors have to be here.
Fortunately, I've got a digital advertising leader offering full exposure to the sector. This relative unknown stock, though, has absolutely crushed Facebook's five-year returns by more than 1,300%.
Even better, this company's stock costs around a quarter of FB's share price right now, and it's virtually immune from the pressure weighing Facebook down. Here it is...
The Best Digital Ad Stock You've Never Heard Of
There's nothing like controversy to give investors heartburn, and Facebook certainly illustrates that. This company is well under the radar. I 'd go so far as to say most investors wouldn't know the ticker, despite its top-tier management and excellent, profitable operations.
This digital ad firm has actually grown enough in just five years to have turned a stake of $25,000 into $588,500, with gains of no less than 2,254%.
It's better than Facebook in more ways than one.
That said, Facebook is a tough business. It sells hardware for the home, a VR headset, and has several different web properties that all depend on people going back to it day in and day out. If users somehow find a new social website, it could spell the end for Facebook in an instant. That is a lot of business to manage and worry about, especially since they are dependent on ad revenue from their own websites.
That's why I'm telling you that The Trade Desk Inc. (NASDAQ: TTD) has built the perfect business model for today 's changing ad landscape as one of the top platform-agnostic advertising businesses.
The firm 's broad and growing roster of digital ad management tools are proving hugely disruptive to the hidebound ad industry where newspaper and TV ads continue to fade into irrelevance.
Last year, TV ads were so weak that eMarketer lowered its forecast for domestic spending by 15% to $67.5 billion. Even in 2019, a year not affected by the pandemic, American TV firms still only brought in an estimated $70.6 billion.
With digital advertising, it's a whole different story. Data compiled by Statista shows digital advertising in the U.S. last year had a value of $139.8 billion, up 12.2% from the year before. Over the decade that ended in 2020, this sector has grown by 437.7% from 2010's spending of $26 billion.
It's hardly a surprise. At this point, and in this modern economy, when some aspect of business goes digital, it's probably going to do better than its analog equivalent.
The lengths companies are going to in order to go digital demonstrates that, just like we talked about a few days ago with Globant SA (NYSE: GLOB), and with 5G wireless raising the internet connectivity standards, there will be plenty more examples where that came from, that could be worth $1.4 trillion altogether.
Billions of Ads for Hundreds of Millions of Eyes
Based in Ventura, CA, the Trade Desk has built a platform that can scale like crazy. The firm's clients can buy ads from more than 70 different exchanges and networks.
We're talking roughly 580 billion ad impressions and roughly 450 million devices across the globe per day.
Not bad for a company that as recently as May 2011 saw spending per day on its platform come in at just $0.08 - eight cents.
By 2018, however, Trade Desk had seen its first $10 million in one day.
Even better, this is a growth company with a history of making lots of money. It has been consistently profitable since 2013.
I believe that this earnings track record has played a huge role in the company's success and is one of the main reasons shareholders have done so well.
It's also no slouch when it comes to racking up sales gains. Back in 2014, the Trade Desk had sales of just $45 million. Last year, that figure climbed to $836 million, a 39% gain from 2019.
So, in the space of just six years, sales grew by 1,758%.
As you might imagine, shareholders have cleaned up. In just five years, the stock has advanced a stunning 2,254%. That's enough to turn a modest $25,000 stake into $588,500.
Over the last three years, earnings have grown by an average 59%, meaning they double roughly every 14.4 months. In the most recent quarterly report, the Trade Desk reported per-share profit gains of 100%.
Using a conservative estimate - the three-year average earnings growth of 59% - earnings should double again in about 15 months. Very impressive in this market.
The bottom line is, own this stock right now, because you're likely to have a 200% gainer on your hands in the next two years.
My three-part cryptocurrency pick has been even more impressive. It's up 1,000% since I first told readers about it at the start of the year. One coin has more than quintupled this year, the second has the potential to 20X your money by early 2022, and the third is trading for just pennies right now. There's still time to jump, though, so learn how here...
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.