If you’re like most investors, you’re probably feeling a bit frantic as this sell-off has pared your winnings.
Indeed, a lot of folks are probably thinking about cashing out and heading for the sidelines.
But I take a very different view of this kind of turmoil.
You see, I look at it as an opportunity.
As I’ve mentioned before, I’ve always kept a “short list” of stocks that I wanted to own – at the right price. And now that I run advisories like Strategic Tech Investor, that “shopping list” has turned into a roster of companies that I want to recommend to my subscribers.
These aren’t stocks that I’m looking to trade or “flip” for a quick profit; they are “franchise plays” that I believe are capable of tremendous long-term growth – and that can deliver massive long-term profits as part of the bargain.
To identify companies like this, we developed our “Five Rules for Building Massive Tech Wealth.“
Rule No. 1 tells us that “Great companies have great operations.“ And “great operations” usually aren’t possible without a truly great CEO.
So in today’s Strategic Tech Investor, we’re going to help you start crafting a “short list” of your own. We’re going to give you our list of the five best CEOs in tech. We’re going to handicap the “best of the best,” so that you can get your “Buy Orders” ready.
So if this sell-off steepens – as everyone else begins to panic – we’ll be the only ones left to smile. And with good reason.
You see, we‘ll be the only ones dreaming about all the money we‘re about to make.
It Starts at the Top
There’s a reason we’re focusing on CEOs – and not patents, sales figures, P/E ratios or market share.
It really starts at the top.
That’s true, really, of any major corporation. But it’s really true of a tech player. Look how vibrant and active Apple Inc. (Nasdaq: AAPL) was when Steve Jobs was at the helm – compared with, say, John Sculley.
Or think about the marketplace muscle that General Electric Corp. (NYSE: GE) always seemed to find when Jack Welch was running the show.
CEOs are “difference-makers” in the best of times. But when the chips are down, they really display their mettle.
In a sell-off, that’s just the kind of backdrop we’ll face. And that’s just when CEOs must have talent, charisma and leadership to spare.
So let’s take a look at the five execs that I believe are the best tech CEOs in the marketplace today. These are subjective choices, I’ll grant you, but those choices are based on years of experience, observation and comparisons with Silicon Valley legends.
Top Tech CEO No. 1: Elon Musk: Tesla Motors Inc. (NasdaqGS: TSLA)
Best known as a co-founder of electric-vehicle (EV) firm Tesla, Musk showed a burning desire to turn his technical talents into money very early in life.
Raised in his native South Africa and later in Canada, Musk learned computer programming at age 12. Working by himself, he programmed a video game that he then sold for $500.
Peanuts, to be sure, but the experience taught Musk the same lesson that we’ve passed along to you folks here at Strategic Tech Investor – that “the road to wealth is paved by tech.”
After earning his physics degree from the University of Pennsylvania and business degree from Wharton, Musk turned his passion for business into a string of successes.
He helped launch Zip2, a software company later sold for $305 million, netting Musk $22 million for his shares. He then developed PayPal, which later sold to eBay Inc. (Nasdaq: EBAY) for $1.5 billion. At the time, Musk owned 11.7% of the company, making it worth roughly $175 million.
In 2002, he founded SpaceX with $100 million of his own money. Less than six years later, the company received a $1.6 billion NASA contract. In 2012, the firm made history as the first commercial company to launch and dock a vehicle at the International Space Station (ISS).
Besides serving as Tesla’s CEO, Musk is chairman of the board at SolarCity (NasdaqGS: SCTY). Over his career, he’s received countless awards.
In 2007, Inc. magazine named him “Entrepreneur of the Year” for his involvement with Tesla and SpaceX. And in 2011, Forbes named him one of “America’s 20 Most Powerful CEOs 40 and Under.”
Along the way, Tesla’s shareholders have done extremely well. Since Tesla’s initial public offering (IPO) back in 2010, the stock has returned nearly 1,100%.
Tesla’s shares have sold off sharply of late. But the lower they go, the more interested we get.
Top Tech CEO No. 2: Reed Hastings: Netflix Inc. (NasdaqGS: NFLX)
A natural whiz at math, Hastings didn’t start out in business. Instead, he joined the Peace Corps, serving in places like Switzerland and Africa.
With public service under his belt, Hastings went back to school, eventually receiving a Master’s Degree in computer science from Stanford. In 1991, he founded Pure Software, which provided debugging and troubleshooting services.
Then came Netflix.
Hastings founded the company in 1998, as a through-the-mail movie-rental business. The company began with subscription format that was focused on physical media like videotapes and DVDs.
It was here that Hastings showed he was a visionary exec, and not a caretaker.
The “experts” up on Wall Street thought the company would have a tough time moving to a Web-based platform.
Hastings proved them wrong.
He recast Netflix as a dominant player in the burgeoning market for online movies. The company has won awards for its original TV shows.
Hastings also is pushing the boundaries of the format by moving Netflix into ultra-high-definition TV (UHDTV), a Next-Big-Thing technology that could ignite the next spending boom in broadcasting.
Today, Netflix has 44 million subscribers in more than 40 countries around the world. The stunner: The company says its subscribers watch more than a billion hours of its streaming service each month.
Hastings has done incredibly well by his shareholders. With a $22 billion market cap, the stock trades at $378 a share. Over the past five years, it’s gained 920%.
Top Tech CEO No. 3: Jeff Bezos: Amazon.com Inc. (NasdaqGS: AMZN)
You’d think the King of E-Commerce would have started his career in high tech.
But after getting degrees in electrical engineering and computer science, Bezos beat a path to Wall Street, becoming a vice president for Bankers Trust. He later became a senior veep at D.E. Shaw & Co., a firm known for its computer-driven-trading know-how.
In 1994, Bezos chucked that life … for a different one.
He and his wife packed up and moved from New York to Seattle. On the cross-country drive, Bezos banged out Amazon’s initial business plan.
In turning Amazon from bookseller to the world’s largest online retailer, he became a master marketer – with a gift for cross-selling, up-selling … while leaving his customers feeling thrilled with their purchases. He pioneered the use of one-click ordering and encouraged customers to review products, a comforting feature that attracts new buyers and builds loyalty.
In 2009, he orchestrated the purchase of online shoe-seller Zappos Inc. for $850 million. Zappos still ranks as one of the more respected e-commerce brands.
As a classic growth entrepreneur, Bezos also has paid attention to product handling that drives down overhead. In 2012, Amazon bought robotics player Kiva Systems Inc. for $775 million.
And he turned a company “surplus” into a whole new business when he parlayed the extra space on Amazon’s servers into a commanding lead in Cloud Computing. In fact, The Wall Street Journal estimates that Amazon Web Services has annual sales of at least $3 billion.
At its recent stock price of $350 a share, Amazon has a market value of $170 billion. Over the past five years, the stock has gained 410%.
Top Tech CEO No. 4: Larry Page: Google Inc. (NasdaqGS: GOOG)
It’s no surprise that Page ended up in computer science: Because he grew up in a high-tech household, Page was a true product of his environment. Page’s father, Carl, earned a Ph.D in the subject in 1965, and is considered trailblazer in artificial intelligence (AI).
This may explain why Page has steadily moved Google beyond search – first with the “Mobile Wave” and Cloud Computing, and now into such advances as “wearables,” Google Glass, robotics, and autonomous vehicles.
In fact, he makes the cut for this list of remarkable tech CEOs as much for his vision as for the cash he’s put into shareholders’ pockets.
Page followed the path that his father had blazed. He received a Bachelor’s in computer engineering, and later a Master’s in computer science.
In 1998, while pursuing his Ph.D from Stanford, Page co-found Google with partner Sergey Brin, serving as the company’s president of products.
And he has a reputation as a very big thinker. In recent months, Google has acquired at least seven robotics companies, and a handful of others directly involved with artificial intelligence.
Of course, neither Page nor Google will disclose exactly what these moves mean for the company’s future. But this is the company that hired Ray Kurzweil, the futurist who’s famous for predicting the blend of man and machine that’s referred to as the “Singularity.”
In that context, Google Glass, driverless cars and Google’s new AndroidWear operating system for “wearables” points to a vision of a hyper-connected world – with Google as the axis.
Page ranked 24th on the Forbes list of billionaires in 2011. The next year, he placed 27th on the Bloomberg Billionaires Index, with an estimated net worth of $21.1 billion.
Like the other execs on this list, Page’s shareholders have done well. Since he took over the CEO’s spot back on April 4, 2011, Google’s stock price has roughly doubled to its current $1,150. Over the past five years, GOOG shares have soared 240%. The company is worth $390 billion.
Top Tech CEO No. 5: Dave Cote: Honeywell International Inc. (NYSE: HON)
Cote is proof positive that CEOs come from humble beginnings, too.
His parents were a homemaker and a gas-station owner. As a teen in New Hampshire, he worked at his dad’s garage and also washed cars. He dropped out of college for a year and became a commercial fisherman.
After returning to school so he could one day support his family, Cote quickly earned a reputation as a strong leader. Known for being extremely decisive, he began his steady climb to the top management spot at a company that’s a world leader in aerospace.
The trade journal Institutional Investor recently name Cote the “Best CEO“ in Honeywell’s industry segment. Last year, Chief Executive magazine named Cote “CEO of the Year.“ And Barron‘s has recognized him as one of the world’s best CEOs.
This spring, Cote will be inducted to the Horatio Alger Association of Distinguished Americans. The group recognizes leaders who have demonstrated courage and character in overcoming obstacles on the road to success.
The timing of all this is intriguing: Cote recently announced a new strategic plan for Honeywell.
The first part of his Cote’s new vision calls for Honeywell to boost its current 1.9% dividend, and buy back $5 billion in stock. But the plan also seeks growth: It calls for the company to make acquisitions of as much as $10 billion.
Cote is clearly a strategic thinker. But he’s also got the hard-charging drive needed to make that plan come to life.
And he’s already rewarded shareholders.
After a five-year surge that’s taken the shares up 214%, Honeywell’s $92 stock price gives the company a market value of $73 billion. And the dividend payouts have actually boosted shareholder returns.
Investing fads come and go and Wall Street turns itself inside out worrying about quarter-to-quarter numbers and whether guidance is a penny above, or a penny below, some artificial projections.
And when sell-offs start, most investors feel most comfortable when running to the sidelines – which locks in their losses and guarantees that they’ll miss the eventual rebound.
But we’re different. We’re sharpening our pencils, and are clicking our ballpoint pens: If this sell-off deepens, we now have a partial “shopping list” of stocks we want to own.
That shopping list carries the heading “Strong CEO Companies.“
Now we just have to decide at what price we wish to buy.
And if you keep stopping back, you can be sure that we’re going to help you with that, as well.
See you later this week.
[Editor’s Note: As much as we like Tesla Motors, there’s an even better way to play the EV market. Michael calls it our “Secret Way to Play Tesla.” Find out about that – and the latest investment tricks involving bitcoin – in the latest issue of Michael’s Nova-X Investor report right here.]