Lombardi’s “If You Missed Apple, Shame on Us. If You Miss This…” Stock

Teased that this "secret" stock "Will Soon Become a Household Name in the Top Tier of Tech Companies" -- what is it?

By Travis Johnson, Stock Gumshoe, June 18, 2018

Here’s the teaser pitch from Lombardi’s Moe Zulfiqar that caught my eye as he shouts out the headline, “A 1,000% Windfall from the New King of Online Retail“…

Here’s some more from the first part of the ad, which is sniffing around in an attempt to dig up new subscribers to Lombardi’s Micro-Cap Tech Reporter ($295/year):

“In all my years of financial research…

“This is one of the rarest high-tech opportunities I’ve ever seen…

“It involves the $402-billion mighty Amazon…

“… and a tiny, off-the-radar tech company little more than 1/100th its size… with a breakthrough strategy… that’s growing so fast…

“And with so much high-tech power firing up its online-shopping platform…

“… it basically snapped up $6.2 billion worth of Amazon’s business…”

And we get plenty of quotes and hints about what the company might be…

“Amazon could not compete with the technology of this little ecommerce company…

“The Wall Street Journal even wrote, ‘[This little company] Strikes Agreement With Amazon to Migrate Accounts.’

“CNBC added, ‘[This company] spikes 8% after report of expected Amazon sales partnership announcement.'”

Well, those quotes sound awfully familiar… and those articles, while real, are from January of 2017, when Amazon did announce that they were ending their Marketplace service and recommended that their small merchants migrate to… Shopify (SHOP), which is the stock being teased here.

So yes, all of this is quite old… and I imagine that Lombardi probably trots this ad out regularly throughout the year. They hint at 300,000 stores that use this platform, and SHOP had gotten well over 300,000 by early 2017. They talk about $6.2 billion in sales, which must be a reference to gross merchandise volume (the sales made by merchants who use Shopify, not SHOP’s corporate revenue), and SHOP was well over that number on an annual basis by 2015.

And the talk about the “next earnings report” bringing big returns is also fairly generic… since many of SHOP’s earnings reports have brought a “beat and raise” pop for the stock…

“This stock could realistically explode in the coming months, potentially gaining over 50% in one trading session.”

Well, sure, I guess it could… though the chances decrease as the size of the company increases. SHOP’s business is to provide a subscription-based platform that lets anyone start an online retail shop, and, once they’ve built it up into something larger, to sell them more and better services surrounding the basic e-commerce platform.

It is now roughly a $17 billion company, so it’s small compared to some (Amazon, for example), but is clearly not a “micro cap” stock… and it’s very momentum-driven and sentiment-driven, as shareholders over the past year will have no doubt noticed. I covered the stock for the first time almost exactly two years ago now, when the Canadian arm of the Motley Fool was the first to really widely tease the stock as a hot idea (or, at least, the first to catch my attention).

The stock is up more than 500% since then, despite some relatively pushy “short” attacks starting last Fall and despite having “only” 170% revenue growth, and it is barely profitable at this point as they try to maximize customer growth, so clearly a lot of what’s driving the stock is future expectations and investor enthusiasm, not the actual income statement.

That’s not saying all that much, of course, the same can be said of many growth stocks that are waiting for their operations to catch up with their valuations — and who knows, perhaps Shopify will get there. I think it’s worth a speculative position,