A "Shark Tank" Approach to Stock Picking

If you haven't yet seen the show, "Shark Tank" is a reality series on ABC that lets hopeful entrepreneurs pitch their business ideas to industry tycoons in hopes of securing an investment. While the show is more entertaining than it is educational, it does render some worthwhile advice on how to identify winning business models. It's in this spirit that I've outlined two "Shark Tank"-inspired techniques for uncovering wealth-building stocks.

1. Look for companies that tell a memorable story
It may seem obvious, but stories sell. When Tod Wilson pitched his pie factory to the Sharks, it was his emotional story about overcoming homelessness and passionately chasing his dream of selling pies wholesale that got their attention. With a compelling story and a delicious sweet potato pie recipe, the Sharks agreed to invest, and Wilson's retail pie business has since tripled. The takeaway for investors is that consumers want to connect with a company and its products on an emotional level.

Apple (NASDAQ: AAPL  ) is one of the best examples of this in recent retail history. As AdAge magazine conveyed more than a decade ago, Apple's genius is in its ability to resonate with "consumers across generations and international boundaries." From Apple's iconic "Think Different" ad campaign to its 1997 Emmy winning commercial "To the Crazy Ones," Apple told a story that won the hearts of consumers everywhere. As we all know, Apple went on to become one of the most valuable companies in the world.

2. Strategic partnerships are key
On "Shark Tank," the tycoon investors don't just bring money to the table... they also bring an invaluable source of networking opportunities. You can apply this same logic to your stock research by checking out a company's board members. How many influential or reputable business minds does this company have at its disposal?

SolarCity (NASDAQ: SCTY  ) , for example, has more than a few strategic ties to Tesla Motors (NASDAQ: TSLA  ) and its visionary CEO, Elon Musk. SolarCity, which installs solar panels and helps customers finance them, first hit the public market in December 2012. However, unlike other recent start-ups-gone-public, SolarCity's chairman is billionaire entrepreneur Elon Musk.

As the CEO of Tesla Motors, Mr. Musk brings more to the partnership than just business acumen. For example, in November, SolarCity unveiled a new smart energy storage system called DemandLogic that uses Tesla's lithium-ion batteries to help save people money on their electric bills. This strategic partnership has also worked to Tesla's advantage. In fact, SolarCity currently supplies the solar panels for Tesla's Supercharger Network. It's through this cost-effective arrangement that Tesla is able to deploy supercharger stations inexpensively. 

Ultimately, strategic partnerships such as these can fuel future growth and be an important revenue driver for the companies involved.

Foolish takeaway
So the next time you're looking for stocks to invest in, ask yourself: Does this company or brand tell a story and engage with its customers in a unique or memorable way? And, does the business have any strategic partnerships that could boost its market value down the road? Moreover, the key to profiting from business analysis like this is to learn how to turn business insights into portfolio gold by taking your first steps as an investor.

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