Navellier’s “Why This $8 Stock Could Soar After January 20”

What stock is Louis Navellier hinting at in his "Trump Small Cap Investing Summit?"

By Travis Johnson, Stock Gumshoe, January 17, 2017

Newsletter publishers take advantage of catalysts, and what bigger catalyst could there be than a major political change? The Trump election surprise has inspired a whole raft of “buy this stock before President Trump takes office for big gains” and, if past is prologue, we’ll probably find that the catalyst and the Trump impact and the importance of buying at a particular predicted moment are highly exaggerated…

… but that doesn’t mean we’ll ignore these teaser pitches, of course. We’re interested in sniffing out investing ideas anywhere, and we also know that taking away some of the instant greed-lust incentive (I must subscribe to find this stock name now!) will give our readers a chance to think about new ideas touted by investment newsletters in a more patient and balanced way… which is usually a good thing.

This time, it’s our old friend Louis Navellier on the hustings, looking not for your vote but for your subscription dollars ($495/year for his Emerging Growth newsletter).

Navellier’s big picture is probably not a surprise:

“In the weeks since Donald Trump was elected, we’ve seen the Russell 2000 rise 16.13% as the S&P 500 rose just 6.13%. That spread in performance between small caps and large caps is the largest in 14 years.

“We see that spread growing even wider and even more favorable for U.S. small cap stocks over the next six months….

“The reason is simple: Investors are banking on lower taxes, more favorable trade deals, less regulation, and pro-U.S. business policies that will reduce their costs and increase their earnings and send stock prices soaring.

“And those are just three reasons small cap stocks will zoom in 2017, thanks to the Trump Effect.”

And then, of course, we get to the secret stock that Navellier drops some hints about:

“Let me tell you about one of our top picks now.

“It’s an incredibly exciting opportunity, with a White House connection that virtually ensures a double.

“Best of all, it’s just the first of 10 stocks that are set to double your money in 2017 thanks to the ‘Trump Effect’ that’s cresting across Wall Street.”

And then, to get the Thinkolator interested, we start to learn a little more about this $8 stock…

“… the Internet rules the world, and bandwidth… is the lifeblood of the Internet, enabling e-commerce, online research, data storage, file sharing, cloud computing, and much more….

“The analysts at Gartner now project 20.8 billion devices will be connected to the Internet by 2020, not including the billions of connected smartphones, tablets, and computers.

“All of which will increase the demand for greater bandwidth—not only for companies like Facebook, Google, Amazon, and YouTube—but for every small business and computer user on the planet.

“The increased demand creates bottlenecks that slow down network performance that affects the bottom line of all businesses.”

So this company is, apparently, somehow involved with bandwidth. Clues?

“… this $1 billion company makes the superfast 100 gigabit (100G) optical networks and high-speed connections for streaming video, voice over IP, cloud computing, and other applications.

“As such, their products are at the heart of the Internet superhighway, including tunable lasers, receivers, and modulators that increase their customers’ network bandwidth, prevent bottlenecks, and allow customers to run new and exciting applications at blazing fast speeds.

“In fact, the company’s products are so well regarded that they have received the coveted ‘2016 Excellence in Emerging Technology’ award from Cisco….

“The company enjoyed 55% revenue growth year-over-year from Q1 FY17 while gross margins rose 34% and non-GAAP operating income rose 15%….

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“… has a cash balance of $229 million and essentially no debt.

“If you’ve invested in our small cap stocks before, then you know that I salivate when we identify small caps that are growing th