How to Spot Best of Breed Companies
A streamer, a social media platform, a small business eCommerce solution, and a digital wallet walk into a bar…
What do they all have in common?
More than you think.
Specifically, I’m talking about Roku. Pinterest. Shopify. And Square.
Shares of each company have gained more than 200% in the last 2 years – a pretty nice club if you ask us.
Each of these companies completely revolutionized its respective industry, providing an all-inclusive solution for consumers using its service.
Imagine if you could identify the next member of this elite power group?
That’s exactly what we’re doing every day at LikeFolio.
In fact, this is what allowed us to send an Opportunity Alert our members to each of the names I listed above…in 2019.
Square (SQ): Over 300% gain from entry
ROKU (ROKU): Over 1,000% gain from entry
Pinterest (PINS) Over 200% gain from entry
Shopify (SHOP): Over 250% gain from entry
How do we pull this off?
By focusing on companies that are best-of-breed in fast-growing sectors....
Here are the steps:
Step 1: Tap into Real-Time Consumer Data
Specifically, listen for consumers talking about spending money with the company in question.
“Sent Jim rent on Cash App”, “Checked out with Shop Pay”, “Got a sweeeeeet new RokuTV”, “Bought the perfect dress on Pinterest”.
We call these mentions “Purchase Intent”.
And they’re the first piece of the winning trifecta.
When you compare this Purchase Intent Mention volume over time, it becomes abundantly clear which companies are growing…fast.
Just check out what ROKU consumer demand looked like when we sent our initial bullish alert in January 2019 with the stock under $40/share:
Consumer mentions of buying a Roku device or watching the Roku Channel were approaching all-time highs.
Step 2: Understand, Do Consumers Even Like this Company?
More specifically, when consumers are engaging with a company’s brands or services, are they reporting a good experience?
What about compared to peers?
We call this Consumer Happiness. It’s the next piece of the trifecta.
In January 2019, Roku’s Consumer Happiness was 70% positive…an 8 point improvement in a little over a year.
How did this compare vs. peers? Amazon’s FireTV was 62% positive, significantly lower.
This is a powerful data point to have…the company is improving the consumer experience, and this experience is better vs. peers.
Step 3: Identify Tailwinds from Consumer Macro Trends
A company may have a great product and consumer experience, but long-term explosive success is often dictated by how it is positioned in the big-picture.
How are consumer behaviors changing?
Meaning… remember TiVo? Sure, it was a great product.
But consumers wanted to stream, too. And not be boxed in by traditional cable providers. Recording alone wasn’t cutting it.
Speaking of cutting…
Check out cord-cutting mentions in January 2019. The highest mention volume we’d ever recorded.
When all-of these metrics align: Consumer Purchase Intent, Consumer Happiness, and a Consumer Macro Trend, we send out a detailed alert our members immediately.
And as you can tell.. the gains can be extraordinary.
We push out alerts like this each and every month.
In fact, our research desk is preparing to send an opportunity alert that I'm positive you won't want to miss.