A friend of mine, Ben, did what many of us dream about a few years back.
He was in middle management, deeply ensconced in a big accounting firm in downtown San Francisco. It paid great, but Ben hated the job: long hours, a ridiculous commute, tons of boring meetings, eating lunch at the desk every day. You know the routine.
But unlike so many of us, Ben took action. He regained his freedom.
He quit his job, cashed out some of his investments, moved to the country, and became an independent trucker.
He loves it. He loves chatting with other truckers, eating at greasy spoons, listening to talk radio all day, being his own boss… pretty much.
But he also hates it, sometimes. That’s because Ben’s “boss,” such as it is, is a computer that tells him where to go, when to get there, when to pull over to fill up or for maintenance, even when to go to bed.
Yup, like I tell you so often, every business is a tech business – even trucking.
A few years back, I showed you folks one way to cash in on tech’s takeover of trucking by recommending FleetCor Technologies Inc. (NYSE: FLT), a commercial fleet-focused electronic payments company. And if you made that move, you’re sitting on some pretty big gains – 135.8%.
FleetCor still has plenty of room to run – up to 20% in just the next 12 months.
But there’s another trucking technology investment out there that I want to tell you about. And I need to tell you about it now – today.
That’s because midnight, Dec. 18, a little-known federal mandate will go into effect across the United States.
It requires the immediate deployment of a cutting-edge technology for the trucking industry. It’s “Ben’s boss.”
I call it an Augmented Digital Copilot – or ADC for short. (I can’t tell you what Ben calls it.)
And just one tiny company has meticulously developed the technology to dominate this market. Only it can fulfill the immense and imminent demand for these devices.
This small, under-the-radar firm is on the verge of earning a big chunk of the $2 billion windfall that this federal mandate is creating.
That will send its stock soaring and make its investors a fortune.
Making All the Right Moves
Before I tell you about that opportunity, let’s take another quick look at FleetCor. It’s an investment I still like for the long haul.
With gas and diesel costing $2.45/gallon and up, long-haul drivers are regularly shelling out $500 and more to fill up.
And the fleets of business and government vans, box trucks, and cars that clog our streets are spending millions of dollars on gas every day, too.
Tracking and controlling all this is unimaginably complex for the owners of these fleets. Further, the temptation for drivers (or gas station cashiers) to siphon off some of these billions for themselves must be enormous.
FleetCor is one of the best companies in this fleet- the fuel-management business. And it keeps getting better
When I talked to you about FleetCor back in March 2014, I told you that this digital-payments company was “making all the right moves.”
And that was well before its deal to pick up corporate card company Comdata in a $3.45 billion deal. The acquisition put FleetCor in several new and growing business lines, including healthcare payments and virtual cards.
The Comdata deal dramatically raised FleetCor’s heft. It brought in 20,000 customers who make about $54 billion in payments annually with Comdata’s products.
However, those virtual cards were the most intriguing part of this deal. Virtual cards are a relatively new and rapidly growing technology. They allow accounts-payable departments to pay their vendors more efficiently, more quickly and more accurately.
FleetCor quickly offered ComData’s virtual card services through its already robust trucking and fleet markets. Drivers can leave their wallets on the dashboard while pumping gas or getting their brakes fixed – payments will all be taken care of virtually.
Since then, FleetCor has continued to make strategic acquisitions and pick up big clients – continually adding to its business.
- In 2015, FleetCor won big important contracts with Uber Technologies Inc. and BP PLC (NYSE ADR: BP).
- In 2016, it acquired Travelcard Nederland BV, a leading European fuel-card issuer, and Sem Parar, Brazil’s leading electronic toll payments company. FleetCor also started managing the commercial fuel card program for Speedway LLC.
- And earlier this year, in August, FleetCor completed a $690 million acquisition of Cambridge Global Payments, which gives it an entry into the business-to-business cross-border payments market.
Now here’s how FleetCor’s core business works.
Hitting the Accelerator
The company provides fuel cards and other payment services that help its customers – mostly trucking companies and fleet owners – track and control costs. FleetCor charges its customers a monthly fee and levies vendors (gas stations, repair shops, etc.) a service charge when those drivers fill up.
This is all about using sophisticated software and advanced algorithms to provide payment security.
What I really like about this company is that it is big in the wealthy and growing energy sector – and it isn’t a strictly domestic affair.
FleetCor counts energy companies like ARCO, BP and Chevron among its major customers – and more than 50% of its sales came from outside the United States. Moreover, it has acquired more than 60 companies around the world over the past decade, including in Australia, New Zealand, and Russia.
We’ve got some very nice financials and share-price growth as well.
Trading at roughly $190, FleetCor has a market cap of $17 billion and operating margins of 39.9%. It has a 16.7% return on equity (ROE) and a price/earnings (P/E) ratio of 32.35.
And thanks to impressive earnings-per-share growth, I see the stock rising at least another 20% in the next year.
Meanwhile, trucking companies and fleet owners continue to look for ways to control costs and eliminate fraud – so the long-term trends favor FleetCor.
However, FleetCor will not be among the big beneficiaries of the federal government’s mandate of an ADC, or Ben’s boss, in every truck by Dec. 18.
They Need to Hurry… and so Do You
In June, FleetCor sold its NexTraq subsidiary, a developer of ADC technology, to global tire maker Michelin (OTC ADR: MGDDY).
It got out of the ADC business because it wasn’t fitting in with its core e-payments business.
That may have been a smart move for FleetCor – but it leaves you folks scrambling for a way to cash in on that Dec. 18 federal mandate that requires ADCs to be installed in all 3.63 million U.S. commercial trucks.
That’s why I’ve spend the last few months investigating this unique situation. And it’s why I’ve put together an in-depth report on how – if you invest in the right company – this government mandate alone could initially bump a $500 initial investment to $20,410, an out-of-the-gate 3,982% surge.
You see, according to industry experts, the vast majority of truckers and trucking companies that must follow the mandate have yet to secure an ADC device.
They need to hurry.
And so must you – if you want to “be like Ben.”
To find out how to get that report, just click here.