The Motley Fool's "home run buy" stock is something they've been teasing for years now.
It's rare that they issue a home run buy alert, and when they do it's usually pretty good.
But, you can't always fall for the hype and of course with this teaser they are trying to lure in new subscribers.
In this review I'll be going over how this all works, what a "home run buy" actually is, and exposing the stock being teased here.
How This Works
If you're familiar with The Motley Fool then you probably already know how this all works. But, if not, let me explain...
The Motley Fool is an independent investment advisory firm that was founded in 1993 by two brothers, David and Tom Gardner. Their products consist of subscription advisory services that help guide investors by recommending specific investments.
It's common for them to tease some sort of amazing new investment opportunity like this, such as their "#1 Pot Stock" we already exposed. What they do is tease something that sounds incredible, but in order to find out more people have to subscribe to one of their services... usually their entry-level advisory service called Stock Advisor.
And that is exactly what's going on here with this "home run buy" pitch... you'd (normally) have to subscribe to Stock Advisor to find out more about the stock. I say "normally" because today I'll just be telling you what it is so that you don't have to.
What Is a "Home Run Buy"?
They don't really use this term all that much, but it seems that a "home run buy" is the same exact thing as what they call an "ultimate buy".
Have you ever received an "ultimate buy alert" from them?
In order for me to explain what this is I first need to go over a bit on how their stock-picking service works.
As you already know, these teasers are to lure new subscribers into their Stock Advisor subscription service. In this service Tom and David Gardner both make monthly stock recommendations to members. They do so independently each and every month.
A "home run buy", aka "ultimate buy", is when they both happen to pick the same stock. When this happens it means the chances of it being a big winner just shot up a notch.
They've only made around 25 of these home run buy alerts since the inception of Stock Advisor back in 2002, so a little more than 1 per year, and many have had very good results.
For example, Neflix was one of such recommendations back in June of 2007 when it was trading right around $3 - now it trades at over 14,000% more. And Tesla was also a really good recommendation, which they made in November of 2012.
These recommendations certainly aren't guaranteed to be winners and not all are, but they have a better chance than their normal picks, which still fair pretty well.
Motley Fool's "Home Run" Stock Exposed
The latest "home run" stock that I've seen them teasing is one that they've been teasing for quite a while.
Some of what I was able to gather about this stock from the teaser includes:
- it's been referred to as the "Netflix Killer" and a "ticking time bomb" stock (in a good way of course)
- it isn't a competitor with Netflix, Hulu, etc., but instead stands to profit as more people use these steaming services
- the company is actually in the advertising industry
- its CEO called the current moment "the most exciting in the history of advertising" during an interview with Motley Fool co-founder Tom Gardner
And without further ado...
The stock they are talking about here is The Trade Desk (TTD), which is the same stock we exposed here at Green Bull Research in our "ticking time bomb" review. This didn't require all that much research on my part because I'm already familiar with it... so that was nice for a change.
The Trade Desk is a company that provides an online advertising platform where advertisers can place real-time bids (RTB's) for digital ads. It's something that is likely going to revolutionize the way ads are served online, and so this company is positioned well as the market expands.
Just as was stated in the teasers, this company will stand to profit from more people switching to online streaming services, they are not a competitor of Netlix, they are an advertising company, AND... Tom Gardner of The Motley Fool did interview the CEO of the company (Jeff Green) where he stated that he believes this is "the most exciting in the history of advertising" (here's the interview).
All the clues point to The Trade desk being their pick, and this has been confirmed by subscribers who have the inside scoop.
Is This Really a "Home Run"?
Well, The Trade Desk has outperformed the broader online advertising market over the past several years. And, this is even with competing alongside advertising giants like Facebook and Google. Because of its innovative new real-time bidding strategy it is able to compete and do very well. People like the transparency and efficiency of this bid model.
Not only is the company doing well, but the digital advertising space it operates in is expected to see more and more growth.
However, TTD trades very high, so high there isn't really any margin of safety when compared to the company's forward earnings and 12-month trailing sales. As I'm writing this the stock price is just below $300... certainly not cheap.
Analysts over at CNN Business show a 12-month price forecast that is cloudy with some sun... meaning it's not all that amazing. But, then again, The Motley Fool is all about long-term investing and a 12-month prediction isn't all that long.
Quick Recap & Conclusion
- The Motley Fool has been teasing this "home run buy" for quite a while now - years
- Both Tom and David Gardner have picked this stock as a recommendation
- Normally you'd have to buy a subscription of Stock Advisor to find out what it is
- I've just exposed it to be The Trade Desk (TTD)... and now you don't have to buy in just to find out
I hope this review has been valuable to you. As always, let us know what you think of this stock pick in the comment section below. We like hear back from our readers!