The Last Stocks Our Experts Ever Would Sell (Part 1)

One of these companies offers a breakthrough in detecting cancer. Another buys gold for just $400 an ounce. Still another company has $45 billion in cash on its books and has earned record revenue in each of the past three years.#-ad_banner-#

And if you’re interested in income, then pay attention. One of the investments you’ll read about recently raised its dividend for the 29th consecutive year.

The common thread? Each of these ideas is a current favorite of one of our Investment Strategists.

If you’re a StreetAuthority subscriber, then you’ve probably seen information from us regarding a conference call we held on Tuesday that was open to all of our paid-up readers. On the call, our analysts talked about the 17.6-year wealth cycle (the topic of this recent article), and took questions from audience members about which stocks to consider in the final 1,000 trading days of the current cycle.

This was a major event for StreetAuthority. We’ve never had all of our strategists available like this in a single forum — not to mention one with an audience of more than 20,000 participants. 

So in the continuing spirit of group participation, I asked each of the StreetAuthority analysts to share with me (and you) a stock that reflects their overall investing philosophy — a stock that would be among the last they’d ever sell.

The first experts I asked were Andy Obermueller, Chief Investment Strategist of Game-Changing Stocks and Nathan Slaughter, Chief Investment Strategist of Scarcity & Real Wealth. (Stay tuned for more from our other experts). 

Here’s what they said…


Andy Obermueller, Game-Changing Stocks

There are four areas I look at when seeking game-changing stocks: importance, immediacy, scale and moat.

One company that shines in all four areas is Exact Sciences (Nasdaq: EXAS), which has unlocked a key to colon cancer.

This type of cancer is often deadly but is almost always treatable if detected early. The trouble is, people really dislike the colonoscopy to detect it, so they don’t get tested. This costs lives.

Exact Sciences has a better mouse trap. Rather than use a scope to view the colon, EXAS looks for microscopic evidence of cancer. The company has sequenced the colon cancer genome, and it seeks unmistakable genetic markers of the disease.

How? All skin cells regenerate, and the body gets rid of the dead tissue. The colon is no different. By removing skin cells from a stool sample, Exact Sciences’ “Exact CRC” test can detect cancer. (The test notices blood, another colon-cancer symptom, by testing the sample for hemoglobin.) The procedure is non-invasive, pain-free, does not require anesthesia or necessitate any dietary restrictions.

EXAS has found vital life-saving technology, so it’s clearly important. The next test is immediacy, and certainly this is something that the medical establishment would be willing to embrace as soon as the product is granted regulatory approval. As for scale, this is a test that everyone over age 50 needs to have every five years, and that’s a population that is not only large, but is growing. As to moat, the product is patent-protected, and thus the barriers to entry are basically insurmountable for quite some time.

Exact Sciences has a true game-changer on its hands, a stock with the potential to deliver some of the breakthrough growth on which my advisory seeks to capitalize. It’s a strong buy for an aggressive-growth portfolio at any price under $10.

[Note: Exact Sciences isn’t the only game-changer Andy is finding in the health care industry. As he mentioned in the recent conference call, this space is full of stocks with “10-bagger” potential. To learn more about Game-Changing Stocks, go here.]


Nathan Slaughter, Scarcity & Real Wealth

The basic premise of Scarcity & Real Wealth is simple. We live in an age of increasing scarcity, and it’s my goal to bring readers the best ways to profit from this undeniable trend each month.

One area I’m intrigued with is the junior gold producers. Unlike their larger peers, they’re brimming with potential and hungry for the next big discovery. 

Unfortunately, developing a new mine is a costly endeavor, and many of these ambitious companies exhaust their initial funding and must raise additional proceeds to bring their projects to fruition. But capital can be tough to come by. Traditional bank loans aren’t always an option, and secondary stock offerings can scare away investors because of their dilutive impact.

That’s where Franco-Nevada (NYSE: FNV) comes in. The company lends money to cash-strapped borrowers so they can develop their mines. In return, Franco-Nevada gets a percentage of the mine’s future revenues or the opportunity to buy whatever metals are produced for a low fixed cost — often just $5 an ounce for silver and $400 per ounce for gold. (Compare that to current prices of about $35 and $1,700, respectively.)

The company hauls in cash from the royalty and streaming proceeds tied to 45 productive mines. And that cash is used to invest in the next promising mine. Franco-Nevada has an ownership stake in 138 early-stage development projects and is poised to cash in on 26 advanced mining projects that are nearing the finish line to commercial production.

This unique business model allows for full participation in new exploration projects without any of the heavy costs (or risks) associated with traditional mining. Franco-Nevada’s gold, silver and platinum assets stretch from Montana to Indonesia to South Africa. But instead of having to explore for new sources (and then paying billions to develop them), the company lets its partners do the legwork. In effect, Franco-Nevada’s only real job is to sit back and deposit checks, making it one of my favorite holdings in Scarcity & Real Wealth.


Action to Take –> Stay tuned for part two, where we’ll feature the insights from three of StreetAuthority’s paid newsletter experts, including the names and ticker symbols of the stocks they’d hold in any market. And for more on Game-Changing Stocks or Scarcity & Real Wealth, simply click on the newsletter name to learn more.