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When it comes to tech investing, there's a strategy that almost always works.
When you can, buy the "spin-off" plays.
You know what I mean.
With a spin-off, even a mature, seemingly humdrum business can create windfall profits for investors savvy enough to capitalize.
Today we're going to do it again. But we're not looking at one of those humdrum businesses.
Instead we're getting a peek at what I think is the single best pick in the "car of the future" space.
We've already made a lot of money with this company.
Two for the Price of One
We last spoke about this company back on March 21.
At the time, we considered this storied auto-supply firm a great stock to own because it's looking at a lot of growth in an unstoppable tech trend.
And I went on to predict that we'd see 30% gains over the next 24 to 28 months.
We're already well on our way.
On May 3, the first-quarter report from Delphi Automotive Plc. (Nasdaq: DLPH) crushed it on profits. Full adjusted operating income was 17% higher than a year ago on 9% higher sales, strongly beating forecasts.
Wall Street saw that report and - in a no-duh move - plowed into the stock. Delphi rose nearly 11% that day.
Even better, volume was 10 times its 50-day average. That's an absolutely key sign that investors now believe in this stock.
But we were there first. (In fact, we first spotted this stock in mid-December - and we've made a whopping 24% gain since.)
And this story just keeps getting better. Not only did the firm beat on earnings, but it also made a savvy move that will further improve shareholder value.
To focus on its growth in driverless and other "car of the future" technology, Delphi is spinning off its powertrain unit in a tax-free move. That division has 20,000 engineers and racked up sales of $4.5 billion in 2016.
The breakup will make it possible for Wall Street to more highly value Delphi's core high-tech unit - which has developed industry-leading artificial intelligence computing platforms, self-driving systems, and anti-collision technologies.
So we're getting a two-for-one here: a winner in the "car of the future" and - with the powertrain spin-off - a stake in the "car of the now." That's okay, because 95% of the world's cars will still run on gasoline through 2025.
And we're going to get that spin-off... for free.
We really like spin-offs here - because they work.
A Lehman Bros. study found that spin-off companies beat the market by 40% in the first two years. And a Penn State University study found a three-year return of 76% - enough to beat the market by 31%.
So, if we just made the norm here, my 30% gain forecast from back in March will come true.
But there's more going on here than just the spin-off - meaning there's now even more money to come our way...
To what I'm talking about, let's travel back two years in time - back to when a Delphi "experiment" made automotive history.
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.