The Motley Fool is pitching its Stock Advisor Canada service lately with a tease that refers to Amazon’s “Project Vesta” … and it’s all about some Toronto-listed stock that apparently is about to beat Amazon at something.
“Beating Amazon” is one of those stories that appeals to everyone, of course — we all want to own the next stock that takes down a titan and upsets an industry… or, better yet, the next stock that has a shocking run to make you gazillions of dollars, so the “next Amazon” and “next Tesla” and similar stories always tend to get a fair amount of attention.
Here’s how the Fool’s email gets us interested:
“Amazon engineers are furiously working away on a top-secret project in their secretive design lab in Sunnyvale, California…
“Why don’t they want anyone to find out about it?
“Because there could be a king’s ransom up for grabs when Amazon releases this hush-hush technology as early as 2019.
“This top-secret project has been given the code name ‘Project Vesta’, and it could be the key to unlocking a multi-trillion-dollar fortune.”
That’s how to get an ad rolling, right? You want to immediately start visualizing the made-for-TV movie version… too bad Kevin Spacey isn’t all that marketable these days, he’d make a good Jeff Bezos.
But anyway, what’s the investment theme here? It is, of course, that someone is beating Amazon to the punch… here’s some more of the ad:
“… a grassroots Canadian company has already begun introducing this very same ground-breaking technology to the market.
“Which is why we believe that the one stock poised to benefit the most from the technology within “Project Vesta” is NOT Amazon…
“But is actually this innovative Canadian dark horse company, a TSX-listed stock that’s beaten the market by +1,264% since it went public just over 20 years ago.”
OK, I guess we’re going to have to work for this one — almost every time an “Amazon beater” is teased, the story ends up being a veiled reference to Shopify (SHOP), Canada’s current favorite tech company… but they haven’t been public for nearly that long, the company was founded in 2004 and went public in 2015. We need someone older.
So what other clues do the Foolies drop?
“… you probably haven’t yet heard of this Waterloo-based company that’s only about 1% of Amazon’s size right now….”
OK, so that’s making things a little better… there are only a couple dozen Toronto-listed technology companies with headquarters in Ontario (including Shopify), and Waterloo is not that big a city. And, frankly, most of those companies haven’t been public for anywhere near 20 years.
The stock has doubled the TSX return since the Foolies first recommended it in 2015, they say…
So what does the Thinkolator say? There are two matches for this one, and it’s possible that either one is correct — if you’re looking for a company that is roughly 1% the size of Amazon, is headquartered in Waterloo, has roughly doubled the average TSX return since some undisclosed point in 2015, and has been public for 20 years, with at least some focus on artificial intelligence, you could make the case for either Blackberry (BB) or OpenText (OTEX), both of which have been listed in Toronto for more than 20 years (OTEX has been public for a couple years longer than Blackberry).
Much of the ad, whose details I’ll spare you, is all about the general promise of artificial intelligence and machine learning — an area where there’s clearly a lot of investment happening, and where we’ve seen dozens of stocks teased… A.I. seems likely to impact every industry, eventually, as computers get smarter and better at learning without our help. It’s not a “flip the switch” revolution that will change everything overnight, it’s a gradual improvement — like most other things in technology. Amazon gets better at guessing what you’ll want to buy next, or what the most efficient way to delivery a package might be on a rainy Tuesday in November in suburban Cleveland. Google gets better at guessing what you’re searching for. My new car is way better at telling me when I’m going to drive off the road, or alerting me when I’m about to hit something, than the 2006 model I used to drive.
So it’s evolution we usually see, not an overnight change caused by a predictable catalyst… but you don’t need to know when we’ll have our first real “self driving” cars on the road in every state, you just need to know that cars are getting smarter and smarter, and that means there are more software engineers and