The folks at the Motley Fool like to make a lot of the success of their “double down” or “double play” or “triple play” stocks, which generally is a reference to stocks that are either picked by both of the founding Fool brothers (David and Tom Gardner, who together choose the stocks for their flagship Motley Fool Stock Advisor newsletter), or that are re-recommended by one of them once, twice or more times.
The assertion is usually that these kinds of re-recommended picks, which would naturally be the ones about which they have the most conviction, are those that do the best and make up for much of the very good long-term performance that Stock Advisor picks have shown. I don’t know if that’s always true, but there’s likely some fact behind it because they use it in their ads all the time — and it does make sense, the newsletter’s great published average return record must be in some large part because of the extraordinary thousand-plus% returns from stocks like Amazon and Priceline and Netflix that they’ve held for years, and those are the kinds of stocks that they’re likely to pick over and over again. Particularly David Gardner, who is the more growth-focused of the brothers and has “Wall Street thinks it’s too expensive” as one of his key criteria for picking “rule breaking” stocks.
And today, we’re being teased with another of these “re-rec” stocks — so what is it?
This is from the ad, to get you started:
“In Motley Fool Stock Advisor’s 14-year history, there have been only 4 occassions when legendary growth investor David Gardner has seen a company so extraordinary that he issued a “buy” alert within 5 months of its IPO….
“What was the first company to meet this remarkable standard?
“And just four months ago, David identified another small company that cleared this same high bar.
“The stock is already up 40% since David recommended it!
“But David doesn’t think the good times are over -not even close – he just issued a second buy alert for this same remarkable company.”
That’s probably not technically true, since if the Stock Advisor newsletter is 14 years old it didn’t come into being until five years after Amazon’s 1997 IPO… but it is true (or it’s at least widely reported) that David Gardner publicly bought and recommended that crazy new online bookstore at or near the IPO, even if the Motley Fool publishing situation was a bit different back then (they had a few different services and letters before they went live with the current version of their flagship newsletter in 2002 — the Gardner brothers had an investment newsletter as early as 1993, but the Motley Fool really started life as an AOL Chat Board in 1994).
Some of the emails pitching this newsletter have also come in with those fantastical “like buying Amazon in 1997” teases, which, of course, make us see happy little dollar signs dancing in front of our eyes as we imagine those 20,000% returns that early Amazon investors earned (sometimes it’s hard to bee calm, cool and collected in your analysis when you see those dollar signs, isn’t it? Their dance is so tantalizing….)
And I suspect that a few of you might have noticed the answer to this tease already… but let’s just double-check the clues from the ad to make sure:
“While you can’t go back in time and invest in Amazon alongside David Gardner, I believe I’m offering you the next best thing…
“… a company with strikingly similar traits to what made David first issue his Amazon call.
“… market cap of less than $3.8 billion…
“Like Amazon, this company thrives off the growth of its ‘virtual community’ ….
“The company has grown the size of its user base by 63% annually for the past 4 years – giving it more than double the market share of its next closest competitor.
“Even more exciting, management still believes they’ve only captured 11% of the potential market for their product.”
So who is it? Well, the Thinkolator was a little slow to start after a long weekend — but we dusted it off, topped up the gas tank, and eventually got it fired up… and, as you might imagine, the answer came out pretty quickly as soon as we got the clues fed into the hopper. This is Match Group (MTCH), the owner of eponymous dating service Match.com as well as trendier products like Tinder and dozens of other social life apps and services.
And yes, David Gardner did recommend this just a few months after the IPO — he even teased it in his ads in the Spring, so yes, the stock is up 40% since they publicly hinted about this pick in April (we