Dear Red Alert Reader,
It pays to be first.
Investors who bought Amazon.com Inc. (NASDAQ: AMZN) in 1999, when it was trading for a split-adjusted $50 a share, are up over 5,000% today. Even a tiny stake in Amazon then, way before it jumped to the $3,200 per share price tag it has now, could have been the one stock that allowed for retiring before 60, paying off thousands in debt, or buying that dream house that always seemed out of reach.
Netflix Inc. (NASDAQ: NFLX) is another one. Taking a stake in the scrappy upstart in 2010, when you could buy a share for just $9 a share, would mean over 5,000% gains today.
There are more opportunities like these. Just last year, we saw early investors make fortunes on fast-moving companies flying under the radar.
Zoom Video Communications Inc. (NASDAQ: ZM) rocketed 700% higher in just 10 months. Square Inc. (NYSE: SQ) popped up 240%. Pacific Biosciences of California Inc. (NASDAQ: PACB) made shareholders over 400%.
There's no question these are great stocks. We've recommended them right here at Money Morning plenty of times. You can be comfortable keeping these in your portfolio as they continue to grow each year.
But these companies have become household names. A year ago, no one was "Zooming"; now it's how millions of households shared Thanksgiving dinner.
You want to be in on the ground floor of the next big thing. The company that's going to change the world before everyone and their brother owns a share.
You want to own a Zoom before it explodes for 400% gains in a year, or a Tesla before it brings shareholders a monster 700% return in 2020 alone. You want to own the next Amazon at its IPO, not when it's already a $1.6 trillion juggernaut.
You've come to the right place.
Our experts are constantly scouring the markets for the next great success story. They're looking for cutting edge tech stocks, firms leading revolutionary new industries, and genius-level management turning in monster profits.
All before the mainstream media gets a whiff of them.
And that means the biggest profit upside is yours for taking.
In this report you'll find:
- The technology essential to disruptors like Uber, Yelp, and Netflix.
- A breakthrough medical device firm getting emergency FDA greenlights.
- A pioneering bank boasting an unheard-of 51% operating margin.
There's plenty more too. All before these firms are splashed across headlines and cable news.
The Tech for Disruptors: Elastic NV
Who They Are: Elastic NV (NYSE: ESTC) is a software-as-a-service (SaaS) company founded in 2012. Elastic specializes in helping businesses leverage their data into insights.
It's done this by creating a powerful search engine called Elastic Stack that lets users search through incredible amounts of data to find not just a piece of information they're looking for, but full-fledged insights and visualizations that make their data useful.
Why Now Is the Time to Buy: Combing through data in mere seconds is more important than ever. Businesses across the globe are recognizing the importance of using data to make decisions, feed algorithms, and run their day-to-day operations. The Big Data market is expected to nearly double in revenue between now and 2027, according to Statista.
Elastic offers a turnkey solution to any company wanting to leverage its data into better decisions and profits.
The ability to give people the exact info they're looking for on command is why Google's parent company, Alphabet Inc. (NASDAQ: GOOGL), has turned into a $1 trillion mammoth.
Elastic is simply offering this at-your-fingertips solution for businesses, whether they need to search through patent libraries, sales, or all the bytes and bits flying across their servers. It's estimated that 90% of the world's data was created in the last two years alone. This means that making sense and using this data has become a huge opportunity.
Why ESTC Is a Buy: It Is Essential to Tech
Elastic is already solving problems for important companies. This isn't a company with hypothetical promise. It's already proving its value.
Elastic search technology is used by eBay Inc. (NASDAQ: EBAY), Wikipedia, Yelp Inc. (NYSE: YELP), Uber Technologies Inc. (NYSE: UBER), Lyft Inc. (NASDAQ: LYFT), Match Group Inc. (NASDAQ: MTCH), Netflix Inc. (NASDAQ: NFLX), and thousands of other companies with widespread use cases.
Take Uber as an example. Elastic's powerful search tools help Uber's algorithms update pricing in real time. If you've ever wondered how Uber knows just the right moment to move its prices to match supply with demand, Elastic is your answer.
T-Mobile is another excellent example. Its app, including its customer service AI, is now powered by Elasticsearch. By delivering real-time answers to customers, T-Mobile has reported much higher customer satisfaction ratings from its app.
Why ESTC Is a Buy: Elastic Is Growing in a Hurry
Elastic saw 53% revenue growth last quarter. It now has 11,300 subscriptions and over 600 customers with annual contract value of more than $100,000.
Elastic has built itself on a free and open foundation. This has helped it build up a large customer base, which it is using to convert to paying customers. While this can be a challenging strategy, companies like Red Hat, which was acquired by IBM Corp. (NYSE: IBM) for $34 billion, show it is possible. With an in-need product, people will pay.
And as Money Morning Director of Technology Investing Research Alex Kagin told us, "The search opportunities are endless."
Plus, Elastic has expanded into new markets, like observability. It can provide solutions for enterprises to log, analyze, and observe events. This is just one example of how it can expand its user base.
Even with Elastic guiding for 25% growth for 2021, significantly lower than its 2020 growth rate, the uncertain macro environment is mostly to blame. Businesses are still uncertain when the economy will reignite, especially with delays in a vaccine rollout. That problem will be settled soon.
Data will continue to grow, and the need for search will become more and more important.
The Amazon of Southeast Asia: Sea Ltd.
Who They Are: Sea Ltd. (NYSE: SE) is one of the fastest-growing e-commerce companies in the world, operating its Shopee business in multiple countries in Southeast Asia. The company isn't just focused on e-commerce; it also operates an online gaming (Garena) and financial services business (SeaMoney).
This hidden gem is still in its early days of growth. It's growing into its addressable market of 670 million people with a GDP of over $3 trillion.
No wonder it has had nine straight quarters of over 100% revenue growth.
Why Now Is the Time to Buy: E-commerce penetration has skyrocketed in 2020, and customers are just starting to really use the platform. With significant opportunities for new users as Internet penetration rises along with brick-and-mortar retail shifting online, there could be huge growth ahead.
And that growth is especially high in Southeast Asia.
More than 73% of Internet users have recently bought something online in Indonesia, Thailand, Malaysia, Vietnam, and Singapore. That's led to year-over-year e-commerce growth of 25% in Malaysia and Thailand.
With the region's population soaring over 655 million people, this sort of growth is going to be hugely profitable for the companies that tap into it. Just look at how well Amazon has done tapping into the U.S. market.
Why SE Is a Buy: SE Dominates Southeast Asia
Shopee, Sea's e-commerce platform, has overtaken competitors in gross merchandize volume (GMV) with spend going from $3.5 billion in the first quarter of 2019 to $9.3 billion in Q3 on 2020. This leadership is set to continue as management continues to execute on using its multiple businesses to draw new customers in.
Sea has seen amazing growth in all of its businesses and is showing no signs of slowing down. E-commerce has extended its leading position across the region with gross orders and GMV up over 100% in the last year, its gaming division has one of the most popular games in the region, and its financial services business has almost 18 million paying customers. The region is still at the beginnings of using digital payments and leveraging and tying in its large user base from Garena and Shopee could make for an easy transition for prospective customers.
Sea's Gaming business, Garena, has also continued to attract gamers with Free Fire being one of the most popular games in the region with 65.3 million quarterly paying users, up 124% on the year.
Adding SeaMoney to the mix, its payments platform and integrating it with its e-commerce platform has also led to significant opportunity.
Why SE Is a Buy: It's a Growth Stock
While seeing this stock go up almost 400% in 2020 may seem daunting, there is still a lot of growth ahead.
Its target market is expected to have another 100 million Internet users by 2025, and many of these new users will be accessing the Internet through their mobile phones. This will put the region at almost 600 million Internet users. To put that into perspective, the United States has slightly less than 300 million Internet users, or half of Southeast Asia. Just look at what Alibaba, Amazon, Square and PayPal have done, and Sea is on the same path.
A significant change has happened with consumer behavior over the last year, and the trend toward digital finance and e-commerce is set to continue to accelerate. There is a major digital transformation happening across the world, and Sea is helping people be a part of it.
This Stock Is the Future of Banking: Axos Financial Inc.
Who They Are: Axos Financial Inc. (NYSE: AX) is an online bank aiming to disrupt the sleepy world of brick-and-mortar banking.
The company was founded in 2000 as one of the earliest online banks. Now it handles everything from mortgage lending to financial advice and has nearly $14 billion in assets. One of its selling points as an online bank is that without physical locations to run, it can offer better interest rates and fewer fees compared to your typical bank.
Its slogan is "Banking Evolved" because it believes in innovation and offering cutting-edge products.
Why Now Is the Time to Buy: As Money Morning Chief Investment Strategist Shah Gilani puts it: "Axos is an earnings juggernaut."
That's also rare for a $2 billion company. Earnings are expected to come in at $3.15 per share for 2020, a 5% bump from the $2.98 per share it turned in for 2019. That's an incredible run during one of the worst economic disasters the country has seen in the coronavirus pandemic. Other companies with large exposure to real estate and mortgages didn't fare so well, but it shows its online model hasn't led it to take on riskier debt than any other bank.
Take a look at Bank of America Corp. (NYSE: BAC). It's one of the largest banks in the world, but it's shares are down more than 13% in the last year.
You see, Axos's online presence isn't a mere gimmick. The company truly has cut costs down the bone, sporting an operating margin of 51%. That's otherworldly good when you consider one of the best banks on the planet, JPMorgan Chase & Co. (NYSE: JPM), boasts a mere 32% margin in comparison.
Why AX Is a Buy: Online Banking Is the Future
By now, just about every bank offers some sort of online banking feature. In fact, 70% of banking customers look for consistent mobile banking services when opening an account, according to Deloitte.
But just because many banks offer these features doesn't mean there's no room left to grow.
Juniper Research forecasts online banking will grow 54% by 2024 reaching 3.6 billion users. That means online banking growth is actually accelerating. It grew just 20% between 2014 and 2019.
Here's why: There's more to online banking than checking account balances or paying bills. More and more customers are looking for even more tools, like investing and wealth management.
You've likely seen a variety of these online firms pop up lately, from Betterment to Acorns. Even Goldman Sachs (NYSE: GS) Group Inc. has been trying to lure in younger investors with its new Marcus offering. Often called robo-advisors, these companies offer online only portfolio management where investments are accolated according to an algorithm tailored to the customer.
While this is a hot new trend in finance, Axos has been an early mover in the robo-advisor space, offering tailored portfolios for investors based on preferred sectors and risk tolerance. Most professional investors, including financial services offered through brick-and-mortar banks, charge a 1% annual fee. Axos says its is just 0.24%.
As online banking continues to grow, Axos is well positioned to scoop up even more profits.
A Tech-Breakthrough Stock Heading Higher: DexCom Inc.
Who They Are: At first glance, DexCom Inc. (NASDAQ: DXCM) might seem like a healthcare firm. But it is a tech firm at heart, using its tech to solve an important healthcare problem.
DexCom makes continuing glucose monitoring systems for people with diabetes.
For those diagnosed with diabetes, keeping track of glucose levels can be a matter of life or death. To do that, people had to use a tiny needle to draw blood for a machine to analyze. As you might imagine, this process is cumbersome and potentially painful.
Not anymore.
DexCom's system monitors glucose levels 24/7 without using any finger pricks. A small device is attached just below the skin and continuously monitors glucose levels, giving users immediate data on their smartphones or smartwatches. This includes showing users trends and warnings so users can more easily manage their diabetes and live life with less burden.
Why Now Is the Time to Buy: Americans diagnosed with diabetes spend $327 billion per year on related expenses. That's 26% more over the previous five years. These same Americans also spend an average of an hour each day managing their diabetes.
Diabetes is expensive and time-consuming, and a product that can reduce patient costs and increase quality of life is a game-changer.
You can already see that in the stock's performance. From early 2019 until the pandemic correction in February 2020, DexCom shares were outpacing the S&P 500 by 278.5%.
That's just the start.
Money Morning Defense and Tech Specialist Michael Robinson says he expects these gains to be repeated.
"I still see plenty of upside ahead for this market crusher," Michael tells us.
Why DXCM Is a Buy: Sales Are Exploding Higher
DexCom plans to deliver $2.5 billion in sales over the next two years. With a target profit margin of 25%, DexCom could rake in $500 million in profit.
The firm currently offers solutions to people on intensive insulin therapy in 47 countries. That adds up to 6 million people in just the United States and Europe. But they aren't stopping there. DexCom is working on new products for early-stage diabetes patients. This is a market of 60 million people.
There's plenty more room to grow in this market too. About 35% of patients with type 1 diabetes use a continuous glucose monitoring device, which means more than half of the market is still untapped. Plus, DexCom is also expanding into the type 2 diabetes market. This hasn't been as lucrative thanks to insurance coverage for type 2 diabetes, but that's changing.
DexCom's next generation of CGMs, the G7, rolls out in 2021. This device will be even more affordable, allowing DexCom to penetrate this market even futher.
But one of the biggest reasons DexCom continues to grow is that its products beat out the competition. Abbott Labs and Medtronic both offer similar glucose monitoring products, but DexCom's lineup offers superior accuracy. That's giving it a huge advantage over its rivals.
Why DXCM Is a Buy: Its Device Is Essential Right Now
The FDA is allowing DexCom's CGMs to be used in new ways.
DexCom's products might be designed for outpatient use, but the global coronavirus pandemic has created new opportunities for the company. Normally, someone with diabetes being treated in a hospital wouldn't need a CGM. Healthcare providers would be on site to handle the job for the patients.
But with the coronavirus making human contact more dangerous, the FDA has allowed hospitals to use DexCom's CGM's despite them not being FDA approved for in-patient use. That's because using the product will reduce human-to-human contact and reduce the spread of the deadly virus.
"That's a big vote of confidence," says Michael Robinson.
The Best Cannabis Stock You've Never Heard Of: Jushi Holdings Inc.
Who They Are: Jushi Holdings Inc. (NYSE: JUSHF) is a vertically integrated premium cannabis and hemp company headquartered in Boca Raton, Fla.
Vertically integrated means the company grows and sell its own cannabis and hemp. This is advantageous for the firm because it's able to control the entire process, reduce costs, and improve efficiencies over the long run.
The company's brand-name cannabis dispensaries include "BEYOND" and "HELLO."
Its hemp-based CBD brands are "Nira," "The Lab," and "The Bank."
And they're all growing rapidly in one of the fastest-growing industries in the world right now - legal cannabis.
Why Now Is the Time to Buy: Marijuana stocks are full of potential in 2021, with legalization sweeping the country...
In 2021, we know at least two more states will allow the sale of legal marijuana - Mississippi (medical) and South Dakota (medical and recreational).
And in three states where it was already medically legal - New Jersey, Montana, and Arizona - anyone over the age of 21 will now be able to purchase cannabis recreationally in 2021.
By 2022, we could very well see even more laws to legalize medicinal or recreational weed as 11 of the 15 states remaining to legalize it are expected to vote on it then.
Between now and 2022, the cannabis industry will likely experience another explosive wave of growth that early investors willing to take the risk can still capitalize on.
You see, we're still so early because the infrastructure to grow and sell legal cannabis has mostly not been built out and maximized yet.
We've said in the past here at Money Morning that it's not a matter of if but when cannabis is fully legal across all 50 states.
So if you haven't invested yet, it's not too late to buy the best marijuana growth stock in Jushi Holdings...
Why JUSHF Is a Buy: Jushi Is One of the Fastest-Growing Cannabis Companies on the Market
Jushi is primed for high growth in 2021. The company has eight dispensaries open right now. And with 15 more planned, those who decide to invest today should feel confident they're still getting in on the ground floor.
These new dispensaries are set to open in premium markets like Northern Virginia and Santa Barbara, Calif. (two of the wealthiest populations in the United States).
The company also recently invested in a nine-person management team with 330 new staff members.
It's all-out growth mode for Jushi as it attempts to penetrate these highly sought-after affluent markets.
Why JUSHF Is a Buy: Jushi's Founders Have Deep Pockets
Jushi's founders invested $45 million of their own money to get it started, and now they're expanding rapidly.
In fact, Money Morning Director of Cannabis Investing Research Don Yocham has gotten to know the founders of the company very well over the past 20 months.
In the two quarters following this $45 million investment, Don noted, "sales went from $6 million to $9 million and then to $15 million."
He went on to say, "Nine months out now, the company is on pace to deliver $24 million in its fourth quarter of operations. That's nearly a $100 million annual revenue pace. And this is just its first year."
For a company that's only worth a total $654 million, those are some very exciting revenue numbers for year one that lead us to believe the stock is undervalued.
JUSHF is just beginning to build the momentum it needs to take the stock much higher...
By the end of 2021, it wouldn't surprise us to see JUSHF triple to a $2 billion market cap (or $17.50 per share).
Cash In on the Clean Energy Revolution: SunPower Corp.
Who They Are: SunPower Corp. (NASDAQ: SPWR) provides solar solutions to business, government, and residences worldwide. Its portfolio contains a variety of solar technologies, from full solar panels to solar cells and everything you need to get set up.
This American company has been around since 1985. It's won contracts with the U.S. Department of Energy and NASA since then.
Today, SunPower is best known for panels that produce up to 360 watts total, about 100 more than average.
The solar industry could be worth $223 billion by 2026. And this company could get a big piece of that.
Why Now Is the Time to Buy: Money MorningQuantitative Analyst Chris Johnson says this stock could double in the first quarter of the year.
The team entering the White House has been vocal about alternative energy solutions as a first-term priority. This means that not only will energy trends be steadily shifting in the renewable direction, but the U.S. government could be injecting a sizable amount of funds there as well.
SunPower already has a working relationship with several government branches. Its solar cells have powered NASA aircraft. The company is a well-known clean energy stalwart in the public sector. So it's been waiting in the wings for a year like this.
Already, renewable energy stocks already had a huge year anticipating this trend. SunPower gained 500%, in fact. But the gains we saw this past year are the small tremors before the stampede in 2021.
Solar energy is getting cheaper to produce. The International Energy Agency reported in October last year that it was "now the cheapest electricity in history."
With that, expect to see a much greater rush to renewable energy stocks. SunPower could be one of the first to benefit from any government subsidies - or even a mass public-opinion shift to clean energy.
Why SPWR Is a Buy: The Stock Is a Rocketship Waiting to Take Off
Chris Johnson says that SunPower's technicals reveal higher ceilings for the stock in the coming months. There is plenty more opportunity to profit from this company. And here's why.
Despite massive prior returns, SunPower hasn't caught much attention in the press yet. As usual, the talking heads have occupied themselves with Tesla and Bitcoin drama.
Renewables then, as a whole, are due for an industry-wide rally. SunPower is simply one of the most likely to soar.
It's a financially sound, highly efficient solar solutions provider. It produces one of the most efficient solar cells in the world, somewhere between $2 and $3 per watt. And it only recently became profitable - it's expecting around $200 million in profits for 2020.
The stock is seeing some correction coming out of a monster year. But as renewable energy begins to attract media attention, SunPower stock could more than double from its current $25.
Chris recommends a limit order of $27.50. Buy while you can, because once SunPower starts moving, it's going to be hard to stop.
A Big Data Stock at a Small Price: Unisys Corp.
Who They Are: Unisys Corp. (NYSE: UIS) is an IT consulting services company that provides data analytics, mobility, network, security, and outsourcing services for a global range of clients.
It specializes in bringing clients up to speed with modern technology solutions. Nowadays, businesses can be left behind if they aren't running on the cloud, utilizing artificial intelligence, and keeping their data secure. Unisys helps these companies adapt to these powerful new ways of improving business.
Unisys calls these "transformations," and it's in major demand now. Companies simply don't have the time or resources to build up state-of-the art technology departments to keep their infrastructure up to date. Instead, they leverage help from third parties that specialize in this tech know-how.
And Unisys is proving indispensable.
Why Now Is the Time to Buy: This company is all about the data analytics. The amount of data that large companies use every single day is exploding and making sense of it is big business. Think of major corporations like Apple and Amazon.com Inc. (NASDAQ: AMZN); you can bet they wouldn't be as big as they are if it wasn't for their ability to parse data, which is where companies like UIS come in.
Earnings retreated slightly for UIS in 2020, but that's to be expected, given the pandemic and the economic fallout. But analysts are predicting a big rebound in 2021. In fact, EPS is expected to soar more than 114% in 2021, making the timing perfect here.
Of the four analysts rating the stock, three have "buy" ratings, with just one "hold" rating. One even has a price target of $25 per share, which would represent a solid gain of 41% from today's price.
But Money Morning Chief Investment Strategist Shah Gilani says these predictions are conservative.
With a market cap of just $1.118 billion at the time of this writing, this stock has plenty of upside.
Why UIS Is a Buy: Unisys is at the center of cybersecurity solutions.
Unisys offers everything from cybersecurity products to consultations to actively managed security services. It's a one-stop shop for companies looking to protect their assets.
And these solutions couldn't be more needed today.
You've likely heard of some of the biggest data breaches over the last few years. In 2018, hackers stole personal data from 147 million Americans in a massive hack of Equiafax, a credit reporting agency.
Marriott International revealed hackers took data from 500 million customers between 2014 and 2018, including passwords and passport numbers.
In 2020 alone, a hacker was convicted of filing $12 million of fraudulent tax returns using stolen data, Wawa lost 30 million customers' data, and currency exchange service Travelex exposed users to hackers.
Hackers and data theft cost companies an average of $3.92 million per breach and loses these companies $1.42 million in business, according to Purplesec.
While you've likely heard about some of these headlines, what's even more important for us is that data breaches hurt smaller organizations the most. These companies don't have the staff or expertise to make sure their data is protected from sophisticated hackers.
But Unisys does. And hiring them to help protect data from a costly data breach is quickly becoming a no-brainer. Purplesec says 27% of companies will suffer a data breach in the next two years, so this is a growth industry.
