Let's say that you're Dr. Frankenstein.
No? You don't want to play? It's Halloween, my friend. Okay then. I'll be Dr. Frankenstein.
Let's piece together attributes that we admire at existing public companies to create a new one. I'll go first. If you're feeling brave enough to share your amalgamation, the comment box below is all yours.
Building a better company
Okay, let me cherry-pick traits in some public companies that I would love to see in my ideal investment.
Let's start with Apple (AAPL +0.63%). The ability to sell things at a premium -- and a profit -- is pretty rare in tech. However, as it lets tablet and smartphone makers club each other over the head with Android-fueled gadgets, Apple is the long gatekeeper of iOS. The end result is a company that can pretty much dictate its margins.
What next? Let's go with SodaStream's (SODA +0.00%) ability to blow Wall Street profit targets away consistently. Apple used to fit that bill, but the tech giant has come up short in three of the past five quarters. SodaStream, on the other hands, has done nothing but blow analyst income targets away since going public two years ago.
Just check out the past year alone.
|
EPS est. |
EPS |
Surprise | |
|---|---|---|---|
|
Q3 2011 |
$0.34 |
$0.56 |
65% |
|
Q4 2011 |
$0.29 |
$0.32 |
10% |
|
Q1 2012 |
$0.46 |
$0.55 |
20% |
|
Q2 2012 |
$0.46 |
$0.52 |
13% |
Source: Thomson Reuters.
It's not just impressive that the company behind the popular home-based soda-making system is consistently besting the prognosticators. SodaStream is doing it at a double-digit percentage clip every time. I love that kind of disconnect between the analysts pricing a company's worth, and the company itself doing so much better.
Let's also call up Sirius XM Radio (SIRI +0.00%) to the slab. I'd love to carve out its tenacity to survive. This is a company that was bracing investors for a bankruptcy filing in early 2009, before bouncing back to become one of the market's biggest winners since that lull.
However, the reason why Sirius XM makes my Frankenstock cut is that it was able to pull off a rate hike in January. Customers didn't flinch. The modest 12% rate increase should've forced churn to spike and conversion rates to shrink, but new customers kept on coming, and older customers are sticking around.
Your turn
You may not agree with how I pieced my monster stock together, but that's why there's a comment box at the bottom of this article. List components of three companies that you wish you could find in a single investments.
Come on. Surely you want to give it a shot now?
