There’s no beating around the bush with this one — Jeff Yastine is telling us he has found the “inconspicuous” $20 stock, from a company that “is one of the most powerful yet unknown technology providers on the planet”… and that you can turn $10,000 into a million bucks by buying into his idea.
All that from a $47 newsletter… what could go wrong, right? Heck, they even say on the order form that this subscription is somehow a $995 value! (Though do be careful, that $47 for Total Wealth Insider seems to include trials to a second letter, and your subscription will automatically renew in both for a total of $176/year.)
Anyway, we’d like to ID that “Inconspicuous $20 stock” for you so you can think for yourself, do your own research, and not be committed to a subscription based on a hype-y presentation. So let’s get started… here’s the intro promise of the presentation, which Yastine gave on a stage to some sort of group of Banyan Hill subscribers:
“Think of what it would be like to turn $10,000 into $100,000 … then as the stock keeps shooting upward, watching that $100,000 turn into $1 million.
“The secret of course is buying the right stock at the right time—before everyone else hears about it.
“That’s why I’m here today.
“I’m here to tell you about that one stock….”
And here’s the wording on the actual order form:
“I’m going to show you the best way to hit the million-dollar mark with just ONE stock.
“You are just one click away from discovering the $20 stock that could turn every $10,000 into as much $1,000,000.
“This company is set to dominate both the broadband and the 5G wireless markets across an ENTIRE continent.
“Insiders are buying up shares hand over fist.
“And, for the moment at least, very few people outside of Wall Street are even aware this opportunity exists.
“This is it. This is your best chance to turn $10,000 into a million-dollar windfall.”
That “insiders are buying” part is specified here:
“They have virtually an unlimited audience. And insiders have scooped up more than $20.6 million worth of shares in the last 18 months.”
And, of course, this windfall of wealth is coming your way “beginning February 15th” — mostly, I assume, because the Banyan Hill copywriters know full well that ads without deadlines don’t spur people to subscribe as quickly.
So what does the company do? Here are some clues:
“Millions of people across 20 nations depend on their technology each and every day to shop online, download movies, store family photos on the cloud, post on social media, and much, much more.”
And we’re told that their technology is used by all the biggies — Amazon, Netflix, Walmart, Facebook, Disney, Google, IBM, Microsoft, etc.
We’re also told that “its revenue is projected to double within the next 60 months” — which is an awfully specific and useless forecast… no one, of course, has much visibility in what any market is going to be like in FIVE YEARS.
Insiders have bought “over $4.3 million worth in the last two months”
“… shares of this company never had an Initial Public Offering.
“Other than company insiders and a handful of major players on Wall Street, few are aware their shares have even gone public.
“They began trading on the NASDAQ with zero—and I mean ZERO fanfare.”
OK, that’s interesting. What else?
“I believe this company will make an announcement on February 15 that will put it front and center on Wall Street’s radar.”
Though that’s apparently a guess, since he also says “They have not publicly stated yet when they will make the announcement.”
Yastine says that there are three big things he looks for in stocks…
First is an “unlimited audience” for the product… and this one apparently has that potential, with 6.5 million monthly users but on their way to more than 600 million in 2040 (who’s making projections like that, I don’t know).
And he drops a new clue…
“With operations run out of Denver, Colorado, they’ve already become a broadband technology provider in more than 20 countries.
“And they are now positioning themselves to dominate an ENTIRE continent (… of 639 million people)”
Apparently they also have experience doing just that… he says…
“Within 12 years time their parent company completely dominated the broadband market in Europe….
“Now they’ve spun off this entirely new company —headed by some of their most senior executives—in order to do it again.”
OK, so we’ve got some kind of spinoff, and the folks behind the parent company apparently posted 995% gains for investors at some point.
Second is that “insider ownership” bit… the biggest insider is a “rainmaker,” apparently, and Yastine says that “in the last 18 months he has purchased $16.3 million worth of stock in his new company.”
And unlike most teases about “insider buying,” these guys are apparently buying:
“They didn’t exercise options to get the shares.
“And they didn’t receive them as bonuses or compensation.
“They have been buying shares hand-over-fist on the open market … with money out of their own pockets.”
And the third thing Yastine says he looks for is a “profit accelerator” — which I guess most investors would call a “catalyst,” some future event that is likely to cause a stock to rise in price, a restructuring or new management team or new product release or big earnings date or expansion plans or something like that.
And apparently for this stock, the “profit accelerator” has something to do with 5G:
“Well, for the past 18 months this company has been working on not just one but two projects that will allow it to dominate 5G in all its markets.
“They’re already poised to dominate broadband across an entire continent.
“Now they’re expected to control the flow of 5G wireless data for a quarter of the globe as well.”
OK, so the hints about this “rainmaker” who has made more money than pretty much anyone else in recent decades are clearly pointing at telecom/cable magnate John Malone, who has so many spinoffs and tracking stocks that it’s almost impossible to keep track of them all.
So, one gathers, we’re being teased here about one of his more recent spins… some company that is aiming to dedicate internet access on some continent that isn’t Europe. Which means, dear readers, that Yastine is hinting at… Liberty Latin America (LILA for the common shares, LILAK for non-voting shares, super-voting shares get 10 votes each and trade OTC at LILAB).
Liberty Latin America is a telecom company that provides fixed-line telephony (declining) as well as video and broadband internet service, primarily under their VTR and C&W brands, much like AT&T or Comcast in the US, and they also have 3.5 million mobile subscribers, most of whom are still being upgraded to 4G. 5G is not really on the radar yet for Liberty Latin America, that’s an expensive upgrade, but presumably it will be at some point.
And yes, the CEO and CFO and a director did combine to buy about $4.3 million worth of shares fairly recently, though the presentation that Yastine initially gave must have been a while ago because the buys were in August, which my calendar tells me is no longer “in the past two months.”
On the positive side, those insiders last bought at average prices a little over $18, so if you want the common stock it’s cheaper than that now at about $16.
And yes, John Malone owns a gajillion shares of this one, too — and has bought and sold tons of them. Barron’s did a nice profile of John Malone and his dozen or so major companies (Liberty Braves, Discover, Liberty Broadband, Lions Gate, etc.) back in November, and that’s worth reading if you want to try to get a handle on his strategy and thinking. They note that Malone has 25.5% voting control of Liberty Latin America, in case you’re curious.
It’s hard to understand the web of Malone companies, but it’s also hard to complain about his peformance — not every one of the companies has done well, but shareholders who have followed him in general have very likely done well in most of the Liberty stocks. He is a big fan of using cheap money to lever up equity, giving himself and other shareholders a better return, and that might be a risk if money stops being cheap — but it’s not an immediate risk for Liberty Latin America, at least, their maturities begin to hit several years in the future and they pay only about 6% interest, with fixed rates.
Liberty Latin America seems to mostly be a play on Puerto Rico’s recovery at this point, levered by the value of their big subsea fiber-optic network in the caribbean that bolsters their mobile subscriptions, and by the continuing upgrading of customers to 4G service in PR, Costa Rica, Panama and elsewhere. They are facing the same cord-cutting and phone-cutting trends as we see in the US and elsewhere, but their broadband business and business telecom services seem to be doing well and it may be that Liberty LatAm will have an easier time growing and doing acquisitions in Latin America than it did in Europe, where the competition is much stronger and more entrenched and the antitrust sentiment is robust.
So I have no idea how it will work out, of course, I have not looked at LILA before, but aside from the fact that I don’t think it will be a meaningful 5G story in the next year or two it does look interesting as Puerto Rico continues to recover… and betting against John Malone has usually been silly, even if you can’t quite understand his complex web of financial engineering. Maybe a few years of rising rates will finally put a dent in his empire, and LILA is still quite concentrated in a few major markets, mostly in the Caribbean, so there’s absolutely the risk that a weak economy (or another natural disaster) could hurt them, but it might be worth considering if you like the Malone strategy of rolling up controlling stakes in telecom companies.
And as far as that February 15 date goes… that’s when they are expected to report their earnings. I don’t know any reason to expect a big change on that date, but they could always announce something or surprise one way or another (earnings guesses are all over the map, but analysts see the company growing revenue at about 4% a year and EBITDA at about 5% — Liberty trades at an EV/EBITDA ratio of about 12 now, much higher than companies like Comcast (9) or Millicom (7) but perhaps not wildly out of line if they can get their acquisition game going and grow faster than that). The biggest news lately has been that they called off their attempted takeover of parts of Millicom, which would have given them a much bigger business in South America to complement Liberty’s strength in the Caribbean… so it might be that Yastine was counting on that deal to help Liberty grow more quickly, I don’t know. Liberty would presumably be a little bit challenged to grow with major acquisitions without selling more stock, since they already carry a pretty hefty debt burden, but that hasn’t stopped Malone companies before.
And that’s about all I can tell you after a few minutes of research — but yes, that $20 investment that Yastine thinks will turn your $10,000 into a million bucks must be Liberty Latin America… and I would be delighted to know what you think of it. Any longtime Malone followers out there who have favorites in his stable of stocks? Think LILA is well priced after a slow year, or too levered or growth-challenged? Let us know with a comment below.