I wrote the series the Top 25 stocks for the NEXT 25 years back in May and June of this year. Since the series finished we had three companies go the way of acquisition: Opsware (NASDAQ: OPSW), Color Kinetics (NASDAQ: CLRK) and Kyphon (NASDAQ: KYPH). All three have been or are about to close on their respective deals and will vanish from our list of 25. The good news is the premiums were outstanding and any investor who bought these stocks after reading the initial write ups is walking away with over 50% profits in a few short months!
But onward and upward: Drum roll please.....the three new stocks that I feel could be in the top 25 stocks for the NEXT 25 Years include: eHealth, Inc. (NASDAQ: EHTH), Bankrate (NASDAQ: RATE) and Fuel Tech (NASDAQ:FTEK).
eHealth is a $570 million market capitalization company headquartered in Mountain View, California. The company operates a multi-web site platform that offers its customers more than 7,000 health insurance and related products. The company is licensed in all 50 states and the District of Columbia. Through its ehealth.com and ehealthinsurance.com web sites, customers can price out regular medical, dental and vision insurance. The company also provides options for student-health care insurance as well. My estimates for calendar 2007 is for revenues of $87 million and earnings per share of $.49. For 2008 I envision revenues of $115 million and earnings per share of $.68. As health care insurance is fast becoming a major political as well as economic issue, eHealth may be the winner in finding the best policies at the best price for consumers and small-to-medium size businesses.
Bankrate is a $565 million market capitalization company headquartered in North Palm Beach, Florida. The company is an internet-based, consumer oriented web site offering financial and banking services. Bankrate will locate the best rates offered nationwide for its customers for savings deposits as well as mortgage rates (recently quite a popular subject!). Other services include obtaining information for consumers regarding auto loans, best credit card rates, certificates of deposit and home equity loans. The company is a classic traffic and advertising model. The more traffic it draws, the higher it charges financial purveyors to advertise on its web site. I expect Bankrate to generate revenues this year of $100 million and earn per share of $1.41. For 2008 I forecast revenues of $123-125 million and earnings per share of $1.71-1.75. Bankrate is the consolidator of multi-financial services products and is clearly consumer user-friendly.
Fuel-Tech is a $525 million market capitalization company headquartered in Batavia, Illinois. Fuel-Tech is a play on alternative energy--alternative solutions. The company provides engineering solutions and proprietary products for combustion systems particularly in the utilities environment. Its products and solutions basically reduce harmful emissions from incinerators, boilers, furnaces and other combustion sources. The company is very active in the global market and has won some key, strategic assignments in China. In China, air pollution is a major environmental and cultural problem. Fuel-tech should generate revenues this year of $80 million with earnings per share of $30. For 2008. I forecast revenues of $118-120 million with earnings per share of $.62-.65. The visibility of its revenues and earnings is becoming more and more pronounced as its contracts tend to be 1-3 years in length.
Well, there you have it--the three new companies to watch, study and invest in. All three have terrific business models and have done all the initial heavy lifting. With market capitalization's in the $500 million neighborhood, they have room to grow and hopefully provide investors with mega- gains over the NEXT 25 years...
Georges Yared is the CIO of Yared Investment Research and the author of Baby Boomer Investing...Where do we go from here?
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Reader Comments (Page 1 of 1)
9-17-2007 @ 3:48PM
AnyGoodDeals said...
Cash is king. Sorry wallstreet the correction is coming.
9-18-2007 @ 3:56PM
Van said...
I'm pruchasing GM as we speak....This stock is going to double by the end of the year....Take a look at Goldman & Sachs who have and still are buying this stock and their protfolio is increasing....The houses that possibly down-grade these types of stocks have other "interests" in mind I believe. Toyota/Honda......Look out!