“Don’t Buy Apple Tomorrow Morning, Buy This Instead”

Checking in on the repeating "Hand-Picked by Steve Jobs in 2005" teaser pick from Charles Mizrahi's Hidden Values Alert

By Travis Johnson, Stock Gumshoe, March 20, 2013

This article was originally published — with more or less the same clues and the same pitch, and the same stock being featured, back on September 4, 2012. I’ve added this note to the beginning and a supplemental note to the end, and changed the headline (back in September their hype was “Time is Running Out… Just 6 Trading Days Remain to Buy This Stock”), but the meat of the article (and the identity of the stock) are unchanged.

And, as luck would have it, this stock has done substantially better than Apple over the last six months, since it was teased the first time — though that’s because this stock is now right where it was six months ago, and Apple, as every investor in the world probably knows by now, was topping out at near $700 at that time. The old article starts now:

There’s no shortage of teaser picks we could consider for you today, but since this particular pitch claims to be so time-sensitive … and since, like all good stories over the next ten days, it’s tied in to the rumored release of the iPhone 5 next week … well, I couldn’t resist.

And as a bonus, it’s from a newsletter we don’t write about much — Charles Mizrahi’s Hidden Values Alert, which has had a decent history according to Hulbert (the only time I’ve written about Mizrahi was for a different newsletter of his late last year — the pick, Leucadia National as the “next Berkshire”, was not particularly well timed).

So what’s the idea this time? Here’s a taste of the tease:

“Hand-Picked by Steve Jobs in 2005…This Company Stands Poised to Deliver Explosive Returns over the Next 12 Months

“More than 600 million devices worldwide contain this “breakthrough” – yet most people have never heard of the company that makes it! ….

“The breakthrough was first developed back in the 1960s – but it was so ahead of its time that there was no market for it.

“After only 100 orders, the company quit making it.

“And then Steve Jobs came calling in 2005.

“Before going to market, Jobs was testing Apple’s latest product, the iPhone. He noticed a flaw in the product and he was outraged. There was no way he would allow consumers to have that same problem.

“It was then he stumbled upon this company’s unique 40-year-old “breakthrough” – and he instantly recognized that it was the missing ingredient that would make the iPhone… perfect.”

If you’re a longtime Apple follower, or a real teaser devotee, then that’s enough clues for you and I bet you can name that pick. Shall we check a few of the other clues to be sure?

“It’s a forward-thinking firm with a rich history, founded in 1851 and one that is currently selling at a remarkable discount.

  • This company has a cutting-edge technology that gives it an extraordinary competitive advantage in the marketplace…
  • It has a better than 50% share in a market that is projected to grow like wildfire…
  • Its balance sheet is impressive – and 2011 saw the company set new highs for sales, gross margins and operating income…
  • And – perhaps best of all – the company’s management is aggressively buying back shares … indicating that the people who know best, company insiders, are snapping up shares as quickly as they can.

Ready? Yes, this is another teaser about Gorilla Glass, the super strong glass that’s used in iPhones and iPads and in many other portable electronics, a glass that holds up well to the scratches and cracks that would otherwise beset a tiny, fragile computer that you carry in your pocket every day. Which means that like many before him, Charles Mizrahi’s newsletter is pitching and teasing the old ceramics and glass innovation powerhouse from Corning, NY — Corning (GLW).

We’ve looked at Corning a few times, and I’ve owned it in the past (at the time I sold, about a year ago, it was on the epiphany that owning a slow-growth supplier to Apple was stupid if you could instead buy fast-growth Apple at essentially the same valuation, so I sold Corning and bought Apple). Corning is a significant supplier to Apple and to the other tablet and mobile device makers, and it clearly maintains a leadership in pretty much all areas of glass and ceramic innovation — and, not incidentally, it has incredible manufacturing expertise and huge capacity for glass production. Unfortunately, Corning’s largest business (by far) is television glass — the massive sheets of glass that are used for LCD and plasma flat screen televisions, and that market boomed and busted quite thoroughly … not because people have stopp