When it comes to investing in e-commerce, most people think about Amazon.com Inc. (AMZN) and pretty much leave it at that.
Don’t get me wrong, I’m in no way backing off my bullish belief in Amazon.
After all, we recently had two conversations about the potential double ahead for the King of E-commerce.
The point of today’s chat is to show you how much money you can make by finding a great backend play on a booming sector.
Even better if the firm in mind is a high-growth outfit that flies under Wall Street’s radar. That way you can get in before the so-called “smart money” shows up, and pile up even more profits.
And that’s the exact setup we find with a company I refer to as “Amazon’s Hidden Supercharger.”
Since February 2, 2016, when it hit a post-IPO low up, until February 4 of this year, this stock has gone up 2,409%.
That’s the equivalent of turning $25,000 into $627,500.
A Third Party Blowout
There’s no getting around a critical factor facing our consumer-oriented society. Retail continues to shift away from physical stores and malls.
For tech investors, this is a very profitable trend that will continue for years to come.
A recent market outlook from Statista notes that online sales will rise by 58% from the base year of 2017 through 2023. They’ll have risen from $468 billion to $740 billion.
Yes, I believe that Amazon will dominate at least the U.S. market for many years to come. And we have impressive financial results to bear that out.
In last year’s fourth quarter, Amazon crushed on earnings, beating forecasts by 59.7%. Sales of $87.4 billion also beat Wall Street’s expectations.
Here’s the thing. As powerful as Amazon is, it can’t handle the millions of transactions it conducts every day all on its own.
That’s why it quietly launched a program several years ago that lets third-party vendors sell their products on Amazon’s website. That move has turned out to be a huge win.
Consider that the percentage of third-party sellers has more than doubled in about 12 years. It was just 26% back in 2007. But in last year’s second quarter, the last period for full data, that figure came in at 54%.
Amazon CEO Jeff Bezos hit on a key fact facing companies all over the U.S.- most firms don’t have the talent or the cash to build a winning web site. Now, plugging into Amazon’s sprawling platform isn’t exactly easy either.
You don’t have to take my word for it. The Wall Street Journal has likened the reseller program to the stock market’s own complicated system, complete with the use of very sophisticated computer coding and artificial intelligence algorithms.
The Hidden Supercharger
Luckily, Shopify Inc. (SHOP) provides e-tailers sophisticated software that allows them to plug into Amazon, manage orders, collect payments, and send out emails to buyers.
It’s no wonder that Shopify has been on a roll for several years now. Ironically, though it has made fortunes for its investors, most folks have never heard of the company.
That’s fine with us. We know from experience that getting in front of Wall Street and Big Media can hand us a huge payday.
That means finding a hot stock that’s still flying under the radar or buying into a company with amazing prospects before it potentially even goes public in the first place.
Now, finding those winners that could IPO can take days if not weeks of work and then you aren’t guaranteed these prospective companies are actually worth the trouble. My friend and colleague, Neil Patel, is one of the most accomplished angel investors in the world and can give you expert guidance to find these unicorns. Just click here to watch his special presentation on the subject.
But whether it’s pre-IPO private investing, or hidden gems in the stock market, the key is finding a disruptive company, who fits right into a high-demand niche.
Shopify really proves my point here several times over. Amazon’s Hidden Supercharger has become an integral part of the King of E-commerce’s success.
I’ll be giving you more details about the company’s great operations in an upcoming chat.
For today, I want to show you why this stock is so important. Simply stated, it proves what I have been saying for some time now.
High tech is the one place in the U.S. where investors can regularly find a handful of stocks that can turn them into millionaires in a relatively short time frame.
SHOP is a classic example. It had its initial public offering (IPO) on May 26, 2015. Following my rule of avoiding these stocks for the first six months that they trade, this play had the kind of growth that can create a small fortune in less than five years.
The stock hit its post-IPO low on February 8, 2016, when it closed at $19.33. Since then, it’s scored gains of 2,409%.
Those are the kind of gains that can turn $25,000 into $627,250 in less than five years.
But don’t worry. I still see a lot of upside ahead.
Indeed, in my next chat about Shopify, I’ll show you why it could double twice more in the next three years or so.
You’re really going to want to see how that original $25,000 could turn into $2.5 million in less than a decade.
Cheers and good investing,
Michael A. Robinson