Fool’s “Ticking Time Bomb for Cable TV” pitch

By Travis Johnson, Stock Gumshoe, March 12, 2018

Here’s the teaser pitch that caught the attention of some Gumshoe readers this morning:

“Not to alarm you but you’re about to miss an important and rare event.

“Renowned investor Tom Gardner has identified a stock that he thinks resembles Facebook before its IPO.

“It’s a little internet company that’s growing at a torrid pace – profit grew 86% in the last quarter alone!”

So what’s the story? Well, it’s a pitch for the Motley Fool Stock Advisor newsletter, which is helmed by the founding Fool brothers Tom and David Gardner. And over the years they’ve made a habit of particularly trumpeting the stocks that both brothers like (Tom tends to be the “value” guy, David the “growth” buy, so they refer to these stocks that both of them like as “total conviction” investments).

So that’s what’s got folks interested today:

“Tom’s brother David – a legendary investor who picked Amazon at $3.19 – has gone on record also recommending investors buy this same exact stock….

“across the 21 stocks Tom and David have agreed on…

“The average return for each stock is an astounding 473%!”

I’m sure that number is accurate, but it’s also over a long period of time and, more importantly, it is dramatically skewed by a couple hugely dramatic stock gains — particularly the 8,000%+ gain in Netflix (NFLX) since both brothers jumped on it more than a decade ago.

But still, we want to know what the stock is — what’s the story?

Here are our clues:

“This tiny internet company is about 1/279th the size of Facebook.

“Yet, we think it has a jaw-dropping market opportunity that could be bigger than 2016 total sales of Apple, Amazon, Facebook, and Google – combined!

“This small cap stock has already banked $429 million for its young CEO.

“But he’s betting all of it – $429,607,700 to be exact – on something he’s calling a ‘ticking time bomb.’

“You see, Tom thinks this company’s product holds the key to even higher earnings as more and more people ditch cable for streaming TV.”

So part of their thesis is that there’s more to come from the “cord cutting” surge as people cancel their cable TV and rely on online streaming… and that this company is somehow making money from that:

“… while the ‘cord cutting’ trade has pushed millions of investors into Amazon, Netflix, and Disney… all of which are near all-time highs.

“This hidden company has been raking in cash from deals with industry titans… with almost no fanfare from Wall Street”

And, for one more clue…

“The Motley Fool has recommended this stock four times already in the past year, and each time it’s gone on to crush the market.”

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