2 Reasons GoPro Might Be Worth Investing In for the Long Haul

Three Fools examine the prospects for the business ahead of the company’s highly anticipated initial public offering.

Jun 24, 2014 at 9:35AM

Skydiving Gopro

GoPro is preparing for what looks to be a sky-high IPO, but is the business sustainable? Credits: Matjaz Klemencic, GoPro.

Should Fools buy into GoPro when the stock debuts on the public markets this coming week? Guest host Alison Southwick put these questions to Fool analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up On Wall Street, The Motley Fool's web show in which we talk about the big-money names behind your favorite movies, toys, video games, comics, and more.

Tim says that while most signs point to a blockbuster opening, the business may not be faring as well some investors might like. Gross margins are falling and revenue growth is slowing as key supplier Ambarella (NASDAQ:AMBA) is actively diversifying its business.

"While we will continue to expand our end market exposure, such as to non-sports wearable cameras, we anticipate that sales to a limited number of end markets will continue to account for a significant percentage of our total revenue for the foreseeable future," Ambarella said in its most recent quarterly filing with the Securities and Exchange Commission (SEC).

Nathan agrees, noting that it's rarely smart to buy a new issue in a hot IPO market. GoPro also faces just as many threats as opportunities. Still, there are two indicators that the stock may be worth buying for the long-term. First, CEO and founder Nick Woodman has arranged for 1.5% of the company's stock to be sold directly to fans via the social IPO platform LOYAL3. Engaged owners who genuinely care about their customers tend to perform better for shareholders over the long haul.

Just as importantly, Woodman and his team appear to be investing proceeds back into the business in order to prepare for new competition and diversify GoPro's revenue stream. That's also a good sign, Nathan says, even if we can't be sure that the company's efforts will pay off.

Now it's your turn to weigh in using the comments box below. Do you plan to invest in the GoPro IPO? Click the video to watch Alison put Nathan and Tim on the spot, and then be sure to follow us on Twitter for more segments and regular geek news updates!

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Alison Southwick has no position in any stocks mentioned. Nathan Alderman and Tim Beyers own shares of Apple. The Motley Fool recommends Ambarella and Apple. The Motley Fool owns shares of Ambarella and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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