What’s “The ‘Hidden’ SaaS Stock” for Tech Royalties?

Solving a teaser pitch puzzle from Stansberry Venture Value

By Travis Johnson, Stock Gumshoe, February 25, 2020

I’ve gotten a bunch of questions about the latest teasers for Stansberry Venture Value (“on sale” for $1,897/yr, no refunds), so I thought I’d dig into that a little bit today — they’re hinting at a couple cloud SaaS stocks to pique your interest… and, well, consider me piqued.

The ad is not brand new, they’ve been pitching Stansberry Venture Value with this “Hidden Saas Stocks” spiel for a month or so, but the ad is unchanged and the two stocks that they drop some clues about have not moved much in price since they started touting them… so I guess we haven’t missed much yet.

Starting us out with the big picture notion behind the recommendations, we’re told that Porter Stansberry has “spent my whole life trying to find THIS group of stocks,” and that they’ve beaten the markets handily, returning 56% per year on average… and that only about 150 of these stocks exist, and one of them could “skyrocket 3,000% long term”.

Sound enticing, right? We start to get into the details a little further on in the ad….

“Porter’s two top financial analysts have recently begun recommending a very rare and specific group of stocks in the public markets.

“By our count, only around 70 of them have ever gone public in the U.S.

“I’ll share the names of more than a dozen of them with you today.

“This type of stock outperforms everything else in the markets.”

And this is the “best business model” description from the ad:

“These companies have harnessed a massive shift in how people interact and do business.

“But the real story is how they perfected a world-class business model — the kind Porter has been searching for across every industry for his entire career.

“Companies that execute this model well are virtually guaranteed decades of consistent revenue, with minimal operating costs. I’ll prove it to you today.

“They’re reliable, cash-gushing, ‘meat and potatoes’ businesses — that also happen to occupy a skyrocketing corner of the technology industry.”

And then the part that I like, when the magical word “royalties” comes in…

“The best SaaS companies have retention rates above 90%! So for a SaaS company, each dollar of revenue today actually represents years and years of future revenue as well.

“You may recognize the business model this most resembles:

“Royalties, one of the most lucrative investment themes of our firm’s 20-year-history.

“Simply put, royalties mean you own one asset — a mine… a piece of land… or even something like a book or a song — and you collect payments over and over from folks who want to use it.”

The ad also lists dozens of hugely successful cloud SaaS stocks, many of which you’ll be familiar with like Shopify (SHOP), Pacom (PAYC), SeviceNow (NOW), RingCentral (RNG) and Okta (OKTA), along with SaaS pioneer Salesforce (CRM) and quite a few others (some of those have been touted over and over, and several are in my Real Money Portfolio as well).

And the pitch is that Stansberry Venture Value, thanks to the insights of those analysts (Bryan Beach and Mike DiBiase), will be recommending these kinds of cloud software stocks before they’re household names and before they shoot dramatically higher. From the ad:

“They’re extremely small, with almost no analyst coverage and little to no chance of showing up on an institutional investor’s Bloomberg terminal.

“They’re the type of early-stage companies that can easily grown 10-fold in a few years — especially considering the track record of this world-class business model.

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“They’re almost complete hidden — for now. And Bryan and Mike simply can’t ever detail opportunities like these anywhere but Venture Value.”

So now I’m completely curious, and want to see what stocks they’re talking about… but I would not, of course, ever subscribe to a nonrefundable newsletter just to satisfy an itch about a “hot” stock, so let’s see if we can ID them for you. Then, if you decide this is exactly the kind of thing that delights you, sure, take a few days to think it over and maybe subscribe to their newsletter if you feel like it — I don’t know anything about the track record, and I’d suggest that you’d better be investing at least $100-200,000 in this kind of strategy if you’re ponying up $2,000 for advice, but you can make your own call once the urgency of the “reveal the secret” is removed.

The primary pitch is for two stocks, and it looks like I probably will only have time for the first one today… but I’ll get to the second one in the morning.

“Opportunity 1: The “Hidden” SaaS Stock

“The first and most important of these opportunities is a stock Bryan says is the most exciting discovery of his career.

“A way to get into a SaaS phenom before anyone else realizes what’s going on and drives up the price.

“See… even if you were to go out and identify every one of the 150 software as a service stocks in the world today…

“…your research still wouldn’t turn up this stock.”

Oh, MAN do I love a good secret! Whatever could it be? Might we please have some clues?

“It involves a promising, private SaaS business that was bought up before ever hitting the public markets.

“Now it’s tucked inside an ordinary-looking public company that almost no one is paying attention to.”

OK, that’s interesting. And they say the company was a compelling idea even before this acquisition, so that’s good…

“This company was already