What’s “The #1 Blue Chip Stock of Tomorrow?”

Sleuthing out the water stock hinted at in the ads for Growth Stock Advisor

By Travis Johnson, Stock Gumshoe, January 18, 2018

“This safe growth stock should be a lock in your portfolio for the next 25 years.

“You Must Invest Before April 1”

That’s the headline that’s getting the attention of Gumshoe readers, as several folks have asked me today about the “Blue Chip Stocks of Tomorrow” pitch from Tony Daltorio.

I’ve never looked at one of his ads before, and know nothing about the track record of his Growth Stock Advisor ($77, published by Investors Alley), but he says he’s been a financial researcher and broker for decades and would have gotten you into “blue chips of tomorrow” like Coke and Exxon back when they were just huge, not gargantuan. So that’s the strategy he likes: Buy stocks that are already large and high-quality companies, but have a “clutch opportunity” to begin to really dominate their industry and set off on a long period of more dramatic growth.

Here’s how he describes it in the ad:

“You don’t have to invest in risky, unknown stocks to get wealthy and retire well.

“Forever stocks with massive returns could come from billion-dollar, innovative companies.”

It’s good to check out some more “regular” stocks now and again and not get totally sucked into the the speculative fervor of mining, biotech and technology small caps that tend to dominate the world of teaser promotions… so let’s dig in and see what these “Blue Chip Stocks of Tomorrow” might be. Heck, maybe we’ll even find some dividend payers in this bunch.

So what’s the attention-getter of the tease?

“… you’re about to see the very best BCST staring right at their clutch moment.

“In fact, they’ll be tackling the ‘#1 biggest threat facing the planet,’ according to the World Economic Forum.

“Like the past BCSTs I shared before, they have exponential growth in their future. Their revenues are estimated to be up an incredible 25% from 2016.

“That’s better than Apple or Google.

“Their industry is about to explode to $1 trillion dollars by 2020 (it currently sits above $500 billion).”

OK… that may be splitting hairs, Apple is certainly not in a rapid growth phase on the revenue side, their year over year revenue growth most recently was 12%, but Alphabet, whose revenue is less than half of Apple’s, is still awfully close to 25% (23.7% year over year in the most recent quarter). Still, we get the point: Those are not the fastest growing revenue lines in the market… so what’s this one being teased by Daltorio? Well, he’s not being shy about how much he likes it, more from the ad:

“I’m telling everyone who listens to buy and hold this company forever. A play so great you might even pass it on to your grandkids if you want.”

And then we get on to some specific clues that I can feed into the gaping maw of the Mighty, Mighty Thinkolator…

“I’ve watched this company for a year. It’s doing around $4 billion in revenue. Yet, no one’s heard of them….

“Entrepreneur.com calls this sector a ‘multi-trillion dollar opportunity’ ….

“The stock’s already up 100.84% and still climbing.

“My calculations predict the best window to invest is before April 1, 2018. This company could easily be a $50 billion dollar company….

“Its dividend yield has grown annually the past 5 years….”

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So what’s this “huge opportunity” sector? Later we’re told that the opportunity will be brought by crisis: Water shortages.

That’s not an iconoclastic or contrarian position, of course, lots of investors are always intrigued by “water” stocks because of the nature of that commodity: Water is one of the only irreplaceable ingredients for life, and conflict over water has been a defining aspect of humanity for much of recorded history… and the shortage and unequal distribution of clean, fresh water on earth seems destined to create opportunities for investment gains, somehow.

So we’ve seen plenty of water-related teaser pitches over the years, and lots of stories about the innovations in the space, from new pollution controls or water treatment facilities to water transport systems (including past efforts, mostly failed to tow icebergs or giant bags of water to drought-stricken areas). What angle is Daltorio pursuing here?

More clues from the ad:

“The future blue chip stock I mentioned before resides in the water space. Their stock is taking off, but there’s still time.

“They’re generating close to $4 billion in revenues annually giving them a solid foundation.

“They generate revenue in 150 different countries. The US only accounts for about 46% of their overall revenue.”

We’re gold that this business sources, collects, treats and transports water… so that’s pretty much the whole magilla. What else?

“In 2016, they made major acquisitions in the ‘smart water’ space. This means they’ve invested in cloud-based technology, smart meters, water analytics. New technology in an old industry is always the sign of a pioneer.”

And they’re working on desalination…

“They’ve spent 24 years researching how to remove minerals and salt from undrinkable water. The water is then used for irrigation and animal consumption.”

And the growth, we’re told, is spiking now… though the shares “just hit the perfect price point”:

“From 2011 – 2016, they kept revenue steady around $3.8 billion.

“After the final 2017 numbers are tallied, they are projected to increase that number 25%…up into $4.7 billion.”

So who is this? Thinkolator sez he’s teasing us about Xylem (XYL), the which was spun out of ITT (ITT) back in 2011.

A lot of water-related stocks have struggled to keep up with the market over the past few years — you can see this in the performance of the Calvert Global Water Fund (CFWAX), a mutual fund that specializes in all things water… that has returned about 27%, lagging behind the S&P 500’s 47%… but Xylem, though it has hit a few bumps, has dramatically outperformed both of those