Where there’s doubt, there’s opportunity

By John Del Vecchio  |  July 10, 2018

Automation continues to be a market hot spot.

Well, if the mountains of money getting thrown around are any indication, maybe solar flare is a better metaphor.

The latest example: A company called Automation Anywhere received $250 million in cash at a $1.8 billion valuation. Its software helps automate mundane tasks typically done by humans.

Rather than replace humans, though, the software helps them be more productive.

(Yeah, I’m sure you and your coworkers would love it if your bosses got wind of this…)

Automation Anywhere has been in business for 15 years, but this is the first time it’s taken outside capital.

That tells me the time is ripe to capitalize on demand for automation-related companies.

The valuations could move to extremes, allowing the savvy investor to rack up big gains.

That’s why in this month’s Hidden Profits, I pinpointed a stock that plays a key role in the self-driving industry.

Thing is, it’s not a company that most people associate with autonomous vehicles. Although it’s a brand name, it has a very checkered (and somewhat infamous) past.

This was a company that was on top of its game, only to fall into the abyss.

In fact, back in the day, I made a killing for my firm by shorting this very same company!

I’m not a sentimental investor. There’s no room for emotion when you’re building a portfolio. Just because a stock went one way in the past (however dramatically) doesn’t mean it can’t go another direction in the future.

Well, the future is closer than ever.

And unbeknownst to the average investor, this company owns a key piece of software that has huge potential in the self-driving space.

This was news to me as well until I started analyzing the market for autonomous vehicles.

Perhaps more so than any of my recent recommendations, this pick is hidden in plain sight.

You’d probably laugh at the mention of the name.

Because the company’s business imploded a while back, expectations are low. It’s still a favorite among short sellers.

But doubters create the opportunity.

If everyone felt confident in the story of the stock, there would be no outsized gains to be made.

The company has evolved, and the bears’ case against the stock hasn’t.

The company has a strong balance sheet with plenty of cash to make acquisitions, pay down debt, and buy back stock. The company is strongly positioned to pay you first.

Meanwhile, its core software business has started to show signs of life and gain traction. This is happening stride for stride as demand for autonomous vehicles picks up steam.

There are going to be some big winners here over the next five years. Now’s the time to jump on this trend.

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John Del Vecchio

John Del Vecchio is the author of the bestselling book, Rule of 72: Compound Your Money and Uncover Hidden Stock Profits and What’s Behind The Numbers: A Guide To Exposing Financial Chicanery And Avoiding Huge Losses In Your Portfolio.

As the in-house stock market guru and forensic accountant for Dent Research, John stood on the shoulders of the great David Tice, James O’Shaughnessy and Dr. Howard Schilit, and built a framework of algorithms and a multi-factor grading system that has made him one of the more successful short-sellers around.

John is also the executive editor of our Hidden Profits newsletter and our trading service Small Cap All-Stars.

He graduated Summa Cum Laude from Bryant College with a B.S. in Finance and was awarded Beta Gamma Sigma honors. He earned the right to use the Chartered Financial Analyst designation in September 2001.MORE FROM AUTHOR