When it comes to investing, the road to wealth is paved by tech.
Case in point: When Amazon.com Inc. (Nasdaq: AMZN) went public in 1997, its shares were priced at just $18, compared to nearly $1,600 today.
But that doesn't account for the stock splits along the way. In fact, it would have taken just $570 invested in AMZN at its IPO price to give you a total of $1 million today.
Those returns, according to The Wall Street Journal, have made Amazon the most profitable U.S. stock since 1926.
Of course, Amazon isn't the only tech company that's crushing the rest of the market. In fact, four of the five biggest wealth-creating stocks in modern history have been tech-oriented stocks.
More recently, the Nasdaq 100 Tech Index has outperformed the S&P 500 nearly twofold - with a 432% gain versus a 213% gain - since 2009. And that's just an average of these 100 companies. The best of them are performing even better.
Put simply, if you want to crush the market, you invest in tech.
You also establish the right guide to help you separate the winners from the losers. That's where Money Morning Defense and Tech Specialist Michael Robinson comes in.
Michael is a 34-year Silicon Valley veteran and one of the top tech financial analysts working today. In his time covering technology investing for Money Morning, as well as serving as the editor of Nova-X Report and Radical Technology Profits, Michael has delivered one winner after another.
A few highlights:
These winners are the result of five simple rules Michael has developed in order to identify the companies that can deliver big returns.
Armed with these five rules, he'll guide you to the same winning returns in the coming years.
Let's break it down...
Rule No. 1: Great Companies Have Great Operations - Look for companies led by people with strong track records, who have made smart acquisitions, and who maintain solid balance sheets.
This Is Creating Billionaires: This technology is projected to grow 63,000% and create $7 trillion in new wealth. Will you be able to capitalize on these windfall profits? Read more...
Michael recommended Adobe Systems Inc. (Nasdaq: ADBE) in 2013, pointing out that it was one of the most respected software firms in the world. It created the industry-standard platforms for media professionals.
And rather than resting on its laurels, it was still improving its product.
Adobe was an early adopter of cloud-based software, lowering the short-term cost of its products and expanding its user base. The stock is up 443% since Michael recommended it, compared to 67% for the S&P 500.
Rule No. 2: Separate the Signal from the Noise - If the fundamentals aren't strong, all the hype in the world isn't going to keep a stock rising in the long term.
There's always a lot of noise around Apple Inc. (Nasdaq: AAPL). In 2013, two years after Tim Cook had replaced the legendary Steve Jobs, the "noise" was that Apple would never find its way again.
But Michael looked at the fundamentals and the strength of the products coming out and told readers the stock price would double. Sure enough, AAPL shares have risen 153% since then.
Rule No. 3: Ride the Unstoppable Trends - Even well-run companies need a wave to ride. Look for stocks in the hottest sectors, those that offer the best chance for massive gains.
One of those waves to ride is legal marijuana, especially for pharmaceuticals. That's why Michael singled out GW Pharmaceuticals Plc. (Nasdaq: GWPH) in 2014. GW has already put a cannabis-based mouth spray to treat pain from multiple sclerosis in the UK. And it could soon become the first company to have a cannabis-based drug hit the U.S. market. GW's stock price is up 152% since Michael recommended it, compared to 48% for the S&P 500.
Rule No. 4: Focus on Growth - "Companies that have the strongest growth rates almost always offer the highest stock returns," Michael says. This goes back to Rule No. 2. Revenue and profits, not hype, drive a company's value.
BIG, FAST PROFITS: This one pick paid 100% in seven days, then 205% the next day, and 410% by the next week. You've got to see how it's done...
Between 2010 and 2014, Activision Blizzard Inc. (Nasdaq: ATVI) nearly doubled its earnings per share (EPS). Michael picked it in 2015, and in just three years, the stock price has risen 124%, while the S&P 500 has climbed only 38%.
Rule No. 5: Target Tech Stocks That Can Double Your Money - It's known as the "Rule of 72": Divide 72 by a stock's growth rate to see roughly how many years it will take to double your money.
In line with the previous four rules, Michael suggests using a company's earnings growth - that is, its fundamentals - rather than stock price growth, which can be driven by hype. Find the stocks that can consistently grow earnings by double-digit percentages, and you'll be doubling your money in a few short years.
You can see from the examples above that Michael is great about following this rule. All four of the stocks mentioned have doubled and then some in the last few years.
So, now armed with these five rules, let's look at five stocks that could deliver tech fortunes for you over the next several years.
Since Michael recommended a certain tech giant in 2012, its stock price has risen 213%. That's 120% better than the S&P 500, and it doesn't include dividends.
Now, Morgan Stanley (NYSE: MS) analyst Keith Weiss just set a price target of $130 over the next year, a 33% rise from its current price that could make it the first trillion-dollar tech company.
You probably wouldn't guess that we're talking about Microsoft Corp. (Nasdaq: MSFT).
The reason for Mr. Softy's rising fortunes is largely due to its Azure cloud services. Azure sales grew 98% in the most recent quarter, compared to 45% for Amazon Web Services, formerly the undisputed champion of cloud computing. Morgan Stanley projects Azure sales to grow 450% by 2020, a rate that could make Microsoft the dominant player in this field.
Michael still loves this stock in large part because Microsoft's Azure service will enjoy two major drivers of future growth: blockchain technology and legal marijuana.
Blockchain's digital ledger of transactions that can be distributed but not copied is turning out to be extremely useful for businesses to improve their efficiency and digital security. And Microsoft's Azure service has become a leading provider of blockchain solutions.
On top of that, Microsoft has established Azure as the go-to cloud software system for the legal marijuana industry. In an industry under tremendous scrutiny, any inconsistencies in accounting could mean big trouble for a marijuana-based business. Azure has been tailored especially to help these businesses keep their i's dotted and t's crossed.
"All that makes Microsoft a profitable investment in both mainstream business and bleeding-edge tech like blockchain and AI," says Michael.
Tech Pick No. 2: Not Just for Fun - This Cannabis Producer Is Leading the Way to Improve People's Lives
While the recreational marijuana market may be exciting, the potential of medical marijuana is truly transformative.
WebMD lists more than a half dozen ailments that can be treated with cannabis, including Crohn's disease, glaucoma, and nausea for chemotherapy patients. It can also be effective in treating pain, which has huge implications in a nation that is currently suffering from an opioid epidemic.
Michael Robinson saw the potential back in 2014. That's when he recommended GW Pharmaceuticals Plc. (Nasdaq: GWPH), the global leader in cannabis-based therapeutics.
The stock has risen 152% since then, compared to 48% for the S&P 500.
But it still has plenty of room for growth.
Must-See Interview: Marijuana stock expert Michael Robinson shares details on three tiny pot stocks set to explode following California's Jan. 1 marijuana legislation. Watch here now...
After releasing a cannabis-based pain treatment in the United Kingdom, GW's newest product, Epidiolex, is a potential breakthrough to benefit the 3 million Americans who suffer from epilepsy. The FDA fast-tracked the drug candidate to treat newborn children with the disease, and Michael Robinson expects approval to come this year.
In studies involving 750 children since 2015, 50% have shown a decrease in seizures - with limited side effects. GW is preparing to apply for FDA approval, setting the stage for a major windfall as this new drug changes lives - and changes attitudes about cannabis' medical applications.
This will absolutely be a "must-have" product once it hits the market.
"With its solid science, multiple uses for its main cannabis-based biotech product, and strong alliances with global drug leaders," Michael wrote in March, "GW Pharmaceuticals should leave investors richly rewarded."
After the first human genome was sequenced in 2003, replicating the feat cost about a million dollars. By 2013, one leader in genetic analysis had it down to $4,000.
Today, that company can perform an entire human genome sequencing for $1,000, and according to Forbes, it's not far away from being able to do it for just 1/10th of that.
Launched in 1998, Illumina Inc. (Nasdaq: ILMN) is tapping into an industry that, according to Mordor Intelligence, will grow 50% to be worth nearly $60 billion by 2021. It's called "precision medicine."
Precision medicine is a model for delivering customized healthcare based on a patient's genetics and other physiological characteristics.
This practice can optimize results and lower costs - especially when genetic sequencing only costs $100. That's probably why Congress was willing to put $215 million into precision health initiatives in 2016.
The sequencing services Illumina provides also help scientists track new viruses before they become widespread, as well as to develop advanced new drugs. The company is even playing a growing role in forensics. The San Diego-based firm has also carved out a niche in agricultural genomics, helping to produce healthier crops and livestock.
Illumina's sales have doubled in the last five years, to $2.75 billion in 2017. Its annual earnings growth over the last four years has been 30.5%.
At that pace, this stock is likely to double by 2021.
With a steady track record and more than $2 billion in cash on hand, Illumina is a paragon of great operations. Forbes ranked it No. 18 on its list of "World's Most Innovative Companies" in 2017.
"There's a great chance Illumina can have a major positive impact on your physical and financial health," Michael says.
Everyone has heard of blockchain technology by now. But not many people know what exactly it does.
That has led to companies using and abusing the word "blockchain" in order to stir up hype. Eastman Kodak Co. (NYSE: KODK) and Starbucks Corp. (Nasdaq: SBUX) both announced in early 2018 that they'd be incorporating blockchain technology into their businesses. But they offered little substance in terms of its actual applications.
Even that's not as brazen as Long Island Iced Tea Corp., or rather, Long Blockchain Corp. (Nasdaq: LBCC), as it's now known. That company announced in December 2017 that it would be changing its focus from beverages to blockchain technology and changed its name accordingly.
The stock surged 200% in one day - though it lost most of those gains by the end of January and is currently about 97.5% off its 52-week high.
It's tough to separate the wheat from the chaff in a saturated market. But it's worth the effort in this case, because blockchain is, in fact, big business.
According to research firm Gartner, blockchain technology created $4 billion in business value in 2017, and that number is expected to hit $3.1 trillion by 2030.
When we look for businesses in the blockchain game, we want to target those that are using the technology to create value in a specific business application.
Enter JD.com Inc. (Nasdaq ADR: JD). This Chinese company isn't as well-known as Alibaba Group Holding Ltd. (NYSE: BABA) or Tencent Holdings Ltd. (OTCMKTS: TCEHY), but it's actually the fourth-largest Internet company in the world by revenue.
In addition to selling a wide variety of products online, JD launched a fresh-food delivery service in January. And it's using blockchain's decentralized digital ledger to substantially improve food quality and safety.
The technology will help track beef imports from Australia - which in China amounted to $737 million in 2016 - including information such as where the livestock was bred and raised, where the meat was processed, and how it was transported.
This is an extremely tedious, and therefore expensive, process. But with blockchain, JD has been able to simplify it considerably.
Thanks to its role in the Blockchain Food Safety Alliance, which includes several top American companies as well as researchers at Tsinghua University, JD will be bringing this technology to more and more fresh food categories in the years to come.
"So with JD.com, we have a company that's using blockchain to streamline the supply chain," says Michael Robinson, "making JD a superior blockchain play."
Trump's steel tariffs may help the U.S. steel industry - whose production peak came in 1973 - compete with the rest of the globe. But there's another development that's critical to the industry's success: upgrading its factories.
That means automation. The "robot invasion" has arrived, as machines increasingly take over repetitive tasks and free up human workers to use their dexterity and creativity to boost productivity.
China, Japan, and South Korea are outpacing the rest of the world in automating their factories. Now, it's time for U.S. manufacturers to catch up.
And the company they're turning to is Milwaukee-based Rockwell Automation Inc. (NYSE: ROK).
Rockwell has developed a manufacturing execution system (MES) specifically for metals production, one that gives steelmakers the ability to control and monitor every aspect of production through a centralized, intelligent interface.
The system can then produce sophisticated analytics on the spot, enabling fine-tuning of the process that won't vanish when an experienced foreman retires.
The steel industry needs a company like Rockwell, especially since volatility in steel prices has led many factories to delay upgrades for more than a decade.
But Rockwell is not dependent on any one industry. It has a thoroughly diversified portfolio. No single industry accounts for more than 10% of sales.
Given its high-tech profile, you probably wouldn't expect that this company is 115 years old. But Rockwell started with a motorized controller for industrial cranes, which debuted at the World's Fair held in St. Louis in 1904.
Now it's leading the way toward the Internet of Things, a technology that will connect tens of billions of devices and have a global economic impact, according to research firm McKinsey, of $6.2 trillion by 2025.
In the meantime, Rockwell has not only been boosting efficiency for its clients, but for its own operations. A new MES currently being phased into the company's own production sites has lowered inventory days by over 30% where implemented. Overall, Rockwell has been improving productivity by 4% to 5% every year.
ROK has slipped in price since January, when investors anticipated a lackluster earnings report. In fact, EPS for the quarter came in 12% higher than the year before, and Rockwell raised guidance to an expected 16% growth in 2018.
On top of that, Rockwell is now beginning a $1 billion stock buyback program, which should lead to immediate gains for shareholders.
The stock is already starting to tick up again after bottoming out in early April. So it probably won't be available at a discount much longer.
Rockwell Automation "will play a critical role in the coming rebirth of American steel," says Robinson. "We can count on the stock to rally from here."
Michael Robinson recently held a crucial summit to help ordinary folks make millions from California's ongoing cannabis legalization.
We've already seen people collect massive gains from previous legalization announcements, but with the $20 billion in new wealth projected to flood the industry in California alone, this event is about to blow the doors off of anything we've seen so far.
Michael has narrowed down the pool to three of the best, most lucrative, and fastest-growing California pot stocks - tiny players that could turn a small investment into a six-figure payday.
But that's only possible if you go here to learn more now... before the money starts pouring in.
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