By Matt McCallOct 31, 2019
I’m a big believer in investing early, but I’ll be the first to tell you that it’s not always easy.
If you’re looking for large, long-term gains – and who isn’t? – investing early is necessary. One example you probably know is Facebook (FB). If you’d invested five years ago, you’d be richer today than if you’d just invested this year.
But on the road to greatness, Facebook hit its share of roadblocks. In fact, the stock went absolutely nowhere for over a year after its IPO in 2012.
The IPO market is full of stories like that. And these companies don’t always go on to do great things. Some of the most anticipated IPOs fizzle out before they even begin, as we recently saw with the whole WeWork debacle.
In the space of just one month, the coworking office space company filed for an IPO, saw potential creditors flee once they got a look at its financials, yanked the IPO entirely, and ultimately fired its scandalous CEO, Adam Neumann. WeWork was once privately valued at $47 billion, but now that seems to have gone up in smoke.
One big problem here is that once WeWork got into the spotlight, the hype – and the valuation – got out of control. I’ve seen it many times before, but sooner or later, the honeymoon ends and reality sets in. (You can see why I’m highly selective with my early investments…and why I wait to see if the stock meets my strict criteria before I ever THINK about buying.)
Right now, the best-performing IPOs are also the least talked-about, which is pretty telling. A couple stand out to me right now. They might not have a cool enough story to get on TV, but you’ll definitely want to put them on your watch list all the same.
InMode (INMD) is a medical device company based in Israel. Specifically, its products are used in minimally invasive surgical and aesthetic procedures in the fields of dermatology, cellulite removal, and gynecology. It’s a $1 billion company by market cap, was founded in 2008, and has been profitable for years. Financial buzz puts the sector InMode is going after, medical aesthetics, at $22.2 billion in five years.
INMD stock is up 133% since its IPO this August. Even better, its sales are on a steady climb, too – from $53 million in 2017 to $187 million projected for 2020. That would be 253% sales growth in just three years.
The other promising, under-the-radar IPO is NextCure (NXTC). It’s a clinical stage biotech focused on cancer treatments. The company is pretty small at a market cap of less than $600 million, but it has a deal with drug giant Eli Lilly (ELI) that could result in up to $1.4 billion in milestone payments. The stock is up 30% since its IPO this May. Given the lucrative deal with Big Pharma, I wouldn’t be surprised to see much better gains down the road.
If you’ve never heard of either stock before, I wouldn’t be surprised. They’ve been neglected by the media “hype machine”… and that’s promising. It tells me that there’s still a lot of potential for future gains – gains that these companies can earn the old fashioned way: by selling more product and delivering shareholder value, year after year.
I’ll be keeping an eye out for that. You should, too.
P.S. If you’re looking for stocks to buy today, then don’t miss my 10X Venture Portfolio. The strategy is what venture capitalists use to create a basket of early investments that could repay them by 10X (or more!)
It’s the same strategy that got me into Ross Stores (ROST). If you bought Ross on my recommendation, you’d have made 1,024%… plus 1,407% on Boston Beer Company (SAM), 1,495% on Advanced Micro Devices (AMD), and 2,040% on Ulta Beauty (ULTA)!
I say this not to brag, although I definitely am proud of these results. I just want to show you that 10X gains really are possible. In fact, they’re expected…
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt sits down with InvestorPlace CEO Brian Hunt. They debate whether Bitcoin or gold is the better asset class, and then dive into what it takes to find early stage hypergrowth companies with the ability to go up 10X. This is a cannot miss episode with two guys who have a passion for stocks like nobody else in the business.
You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.
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