The Oxford Club has been recruiting subscribers by dangling the promise of their “$3 Secret Stock” for almost a year now, and those ads are still rolling around the interwebs… but it looks like they’ve finally got a new recruitment tool: The “Next American Mega-Brand.”
So what is it? Let’s check out the ad, see if we can get you some answers, and talk about the stock.
The basic spiel, which comes from George Rayburn but is really about a pick being made by Oxford Club honcho Alexander Green, is that there’s an “hours old” buy list that big Wall Street firms are using, and you can get in on it too, if you only join the club (the sub they’re pushing is $99/yr)….
“What I’m holding in my hands is one of the most coveted documents in the financial world.
“It’s hours old.
“Wall Street firms and professional investors are spending billions to get their hands on lists like this one.
“And 4 out of 5 hedge fund managers use the lists to help pick their next big stock.”
You know what else is “hours old?” Me. It’s a lot of hours, true, I’m about 450,000 hours old, but still, that’s technically not a lie. And I don’t feel a day over 350,000. Whenever you see an ad use a term like that, whether it’s hours or months or days, keep in mind that squishy terms for units of time are a way to build urgency using your assumptions instead of their assertions — and to seem like you’re making a timely promise without getting in trouble with your lawyers for, you know, “lying.”
And apparently this list leads right to the next great American brand. Here’s some more from the ad:
“… the key lies with the company right here at the top….
“Alexander Green, has dubbed the company at the top of this list the “Next American Mega-Brand.”
“Because unlike Nike, Starbucks, Amazon and the others… this company is still small and relatively unknown.
“And it has a huge runway of growth ahead of it.”
We also see a little leap of logic to connect this “list” to past huge successes like those household names, as well as Netflix, National Beverage Corporation and Turtle Beach, each of which enjoyed stock market surges.
The ad references these “lists” in a few different ways — another example given is the research that people did about the Tesla factory a couple years ago, using cell phone tower data to figure out how many people were working on the night shift over time, and interpreting those trends to guess at when production would increase.
So it’s likely that they’re just referencing a kind of in-depth research that’s done by large investors — or more often, by consultants who put together research reports and sell them to a bunch of different hedge funds and investment banks. Data collecting is a big business for Wall Street, you’ll also see firms doing aerial surveys of the suburbs to count how many cars are at the shopping mall, or how full the lots are at the various auto dealerships, and try to turn that data (and particularly trends of changing data) into some actionable intelligence or an “edge” for big investors. It doesn’t always work, for sure, and not every piece of data is important — particularly if it’s available to everyone — but the research business is big in investing.
So what “list” is this “Next American Mega-Brand” at the top of? It looks like it’s some list of companies that are trending via social media… which, they argue, means that the company is quietly building a bigger brand. Here’s more from the ad:
“When companies begin to trend in terms of social media, word of mouth and sales…
“As measured by tracking credit card purchases, cellphone geolocation, social media and internet traffic…
“A handful of the world’s smartest investment researchers start to actually tally up which companies are getting the most attention…
“And then Wall Street gets these lists… with the most active companies at the very top.”
And the ad goes over the top a little bit…
"reveal" emails? If not,
just click here...
“… this is like having a window into exactly which companies are about to surpass earnings estimates every single quarter…”
Not necessarily… partly because the people making those estimates are the same ones who are buying this research. When a plurality of analysts and institutional investors already know something, it’s going to be reflected in the valuation and the share price.
Maybe that won’t matter in growth-happy times like we’ve lived through for the past several years — if companies can trade at 30X sales and all they need is “more beat and raise” each quarter to keep investors happy and keep the stock surging, then I suppose the cabal of analysts and institutions can keep that trend going to some degree. But it’s not magic, and it’s not secret — if data can be bought, Wall Street’s price-setters will own that data.
The specific list that they’re talking about is the “Facebook ‘We’re Here’ Count” — the tracking of people who check in on Facebook from a physical location. Apparently this “Mega-Brand” beat out 41 other companies (why 41? No idea) in topping the “We’re Here” count. More from the ad:
“During February, the Next American Mega-Brand saw significant growth in foot traffic in the form of a half-million or so status updates and other Facebook posts at retail locations around the country…
“Leaving household names like Disney World and IHOP in the dust!
“Now get this: The Next American Mega-Brand is in a sector that always sees a decline in foot traffic and sales during the midwinter months…
“And yet the Next American Mega-Brand STILL beat out 41 other companies on this list!”
And they do drop a few hints about the company… which is exactly what the Thinkolator was waiting for…
“It’s a small company right now. It’s in the Russell 2000 small cap index.
“But Alex doesn’t think it will be small for long…
“Because as we’ll show you, it’s already started a run-up that could send shares up in value 6X… 25X… even 65X from here if it follows the same trajectory as recent brand breakout stories like Lululemon, Domino’s Pizza… and maybe even Priceline.com….
“This company has started beating quarterly earnings estimates. And Wall Street analysts are beginning to notice and ratchet their ratings up to a ‘Buy’ for the stock…
“Which of course attracts more attention and begins to drive up the share price…
“This is already happening.
“This stock is beginning to lift off, my friends…
“Last month, a high-profile financial television pundit picked up the story…
“And announced to the world that this company is an unbelievably well-run business with a phenomenal brand.
“‘It knows exactly what it’s doing,’ the pundit concluded.”
And the stock is also apparently being compared to Amazon…
“According to this highly respected Wall Street research firm, the Next American Mega-Brand is a platform that will accumulate consumers in a way that closely resembles Amazon.”
And we get some financial info:
“… our up-and-coming Next American Mega-Brand’s revenue jumped 14.43% in 2016. In 2017, it increased another 13.67%. Last year, revenue jumped again, to 33.26%.
“In fact, for the last three fiscal years, the Next American Mega-Brand has produced average revenue growth of more than 73%.
“Right now, we estimate it could double its current annual sales by 2019!”
Let me just check the calendar for a sec. Yep, I knew it! It is 2019! And the ad isn’t particularly old, I only saw it for the first time about ten days ago.
Is this company really going to double its sales this year? That sounds like a bit of a stretch… but they indicate that growth has been accelerating, not decelerating, and stranger things have happened. We are, at least, getting closer to a solution.
Then, from the order form:
“This Potential Moonshot Stock Has Lifted Off, and Its Share Price Is Surging After Each Earnings Announcement. The Next Announcement Is Expected on Shortly!”
The odd grammar (“expected on shortly!”) is probably because the copywriter wanted to put in a specific date, since that always helps improve response rates… but someone at Oxford Club must have realized that they might be running this same ad every day for six months, so they have to keep it general.
“This company is combining all the key elements for fast-growing success: a great business model (growth financed from cash flow, not debt), great management, happy employees and customers, a brand people are flocking to in droves because of the wonderful customer experience, and a major long-term expansion opportu