Where There’s Work, There’s Money
Let’s face it: most investors would hardly consider their local convenience stores to be bastions of high tech.
But we’re not most investors. We know from our market-crushing history that seemingly minor news can contain highly profitable nuggets.
That’s why a recent press release regarding a decision by the Maverik, Adventure’s First Stop chain of convenience stores and gas stations really caught my eye.
Operating 350 stores across 11 western states, the firm recently decided to buy a software platform that integrates and streamlines store execution and labor scheduling for more than 6,000 employees.
I believe this speaks volumes about why the market for workforce management software is set to hit $9.9 billion by 2025.
And I’ve identified a storied leader in workforce management, logistics and robotics that is set to profit handsomely.
This is a stock that has already beaten the S&P 500 over the past five years by 834.9%.
Let’s Check on the Job Market
Last Friday, the US Labor Department said nonfarm payrolls rose by a seasonally adjusted 943,000 in July, the best gain in 11 months.
However, the unemployment rate remains at 5.4%. I realize there’s a lot of debate over why this number remains stagnant. Regardless, companies like Maverik are looking to software platforms and other technological solutions to help it make do with the workers it has.
This is just one example of a much larger trend. According to estimates from research firm Mordor Intelligence, the global market for workforce management software was worth $7.03 billion last year. The firm estimates that number will grow to $9.93 billion by 2026.
Considering that these estimates are based on pre-Covid numbers, the trend is bound to accelerate and managing the workforce will require new ideas and solutions.
Enter: Zebra Technologies Corp. (ZBRA).
Zebra Technologies empowers workers in the most productive industries in our economy. Their cutting-edge technology has even optimized our vaccine distribution through their comprehensive temperature monitoring.
Zebra is the industry leader in both software and hardware that read or print barcodes, read or print RFIDs, provides rugged tablets and other mobile computing solutions, and much more.
In fact, I couldn’t decide on a single service or platform to highlight, so here’s their website.
The prospects for a company with so many electronic devices under its belt means so much more when you consider that battery manufacturing technology is also rapidly improving.
One $2 company in particular is hard at work innovating their way past one of the most concerning supply bottlenecks in modern tech.In fact, this breakthrough makes them a strong prospect in their own right. But I don’t want to get too off topic, so more on them right here.
Other areas where Zebra helps companies is in computer vision or monitoring for temperature changes over time. In short, basically anything and everything a retailer, restaurant, or convenience store could need, Zebra provides.
And to protect its leading position, Zebra has more than 5,300 patents issued and pending in the U.S. and abroad.
Zebra is rapidly expanding. One of their most notable acquisitions was Reflexis ONE for $575 billion.
Reflexis ONE’s software allows companies to integrate employee scheduling, attendance, compliance, and task management into one. Traditionally, those have been kept separate, making it hard to actually optimize employee tasks, and keep track of the best ones to reward or promote.
The purchase added to Zebra’s huge existing suite of solutions that help businesses optimize their operations. You may never have heard of the company.
In 2019 alone, Zebra acquired three companies, focusing among other things on analytics and on vision systems for robots.
This year, Zebra also bought Fetch Robotics, a startup focused on self-navigating robots that work in e-commerce warehouses. Together, the companies will be able to improve the workflow of both the robots and the workers in the warehouses.
For example, Zebra’s expertise in handheld scanners and tablets will allow human workers to better direct Fetch’s robots. Zebra’s inventory and sales software will also allow both workers and robots to move around the warehouse more efficiently.
On the other hand, the addition of the robots allows Zebra to offer a practically complete solution to any company’s warehouse needs.
All those acquisitions are adding up to some fast-paced growth. Over the past five years, Zebra’s stock has gained 919%, compared with the S&P’s 94% gain over the period.
Don’t worry, I still see plenty of upside ahead. In the most recent quarter, the firm’s earnings per share soared 79%.
To be conservative, I’m forecasting earnings to grow by 24%. At that rate, earnings will still double in just 3 years.
Add it all up and you can see why I say it’s possible to turn a routine news item into gold.
That is, if you have a savvy tech veteran like me in your corner.
Cheers and good investing,
Michael A. Robinson