‘Do your planting in the morning and in the evening too. You never know whether it will all grow well or whether one planting will do better than the other.’
—Ecclesiastes 11:6
Investing is good planting. Our trading desk monitors global markets day and night. With changing market dynamics, now it’s time to expand our seed mix a little…
There are many good companies I wish I’d got into in their first couple of years of listing.
When you’re chasing growth (and some income along the way), one promising path is to find a market that is about to become bigger. Much bigger. And that often starts in those early years of being a public company.
After watching many ‘hot’ US IPOs, you get to know the drill. They start high. Then investor impatience (and sometimes remorse) kicks in, and the stock gets sold off. Several months later, sometimes a year later, the share price enters value territory — when considering growth potential.
Case in point is Facebook [NASDAQ:FB] — which we’ve been monitoring for some time. It IPO’d on 18 May 2012 at $38. By 4 September, it had bottomed out at $17.73. Today it trades near $330. Take a look at the trajectory since the post-IPO dip, and there’s been a strong mainline trend upward:
Source: Google Finance
Facebook is probably not bad buying at a P/E of around 28. But with no dividend, we need to be sure of massive growth, and that is a bit harder to achieve at this price.
Maybe we can do better.
Much better…
We now have our eye on an exciting tech business that’s bursting with speculative potential.
It may be ready to capture a monster-sized share of a global market that’s still in its infancy.
It’s a market that Goldman Sachs has estimated will be worth more than $7 trillion…
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