Investors who successfully find undervalued small-cap companies with the potential for strong future growth can earn extremely high returns from their investment portfolios. Since 2004, the Motley Fool Hidden Gems service has delivered winning investment ideas to its subscribers, and over that time span, the picks that Motley Fool Chief Investment Officer Andy Cross, advisor Seth Jayson, and their analyst team have made have produced markedly better returns than the S&P 500 stock market index has. Below, we'll show you how you can get access to this award-winning service at a discounted price. But first, let's take a closer look at the secret behind Hidden Gems' exceptional returns and how the service hopes to keep coming up with future winning picks.
Thinking big by looking small
Motley Fool Hidden Gems gives its subscribers two stocks each and every month that its analysts believe offer the potential for impressive share-price gains over time. The service prefers a long-term approach, expecting to hold its stocks for at least three years and ideally for as long as possible in order to squeeze the most profit from its picks. By using fundamental analysis of a company's business model, Hidden Gems seeks top returns while taking on only reasonable risks.
One key tenet that Motley Fool Hidden Gems follows is that diversification is the key to strong overall returns. Small companies can be especially volatile, but owning at least 20 Hidden Gems stocks can help reduce overall risk levels among your holdings. That in turn can make it easier for your overall portfolio to grow consistently over time.
The secret of Hidden Gems' success
In particular, Motley Fool Hidden Gems looks for companies with high-quality businesses and management teams that suffer from a lack of either awareness or respect among rank-and-file investors. In some cases, those hidden gems are just great companies that for whatever reason have remained obscure and under the radar for most investors. In other situations, companies that face temporary setbacks take share-price hits that are far out of proportion to the true financial hit from the setback, and the odds of a bounce-back are strong. Finally, broader-based economic trends or operational challenges can push a stock out of favor, but if the business recovers, it can produce sizable returns for investors willing to jump into uncertain situations.
A look at the top-performing Gems over Hidden Gems' history provides some examples of the service's success. TransDigm Group (NYSE: TDG) isn't a household name among most investors, but the specialist in aerospace systems and components has capitalized on the rising demand for new commercial aircraft. Its success in capturing market share in the aerospace industry has given investors a return of more than 1,300% over the past eight years. Meanwhile, Under Armour (NYSE: UA) has gone from being virtually unknown when Hidden Gems first recommended it in 2008 to vying for leadership of the athletic apparel industry. Investors who followed Hidden Gems' re-recommendation to buy the shares in late 2009 have earned returns of 1,030%.
Motley Fool Hidden Gems also isn't afraid to stick with companies that go through temporary hard times. Buffalo Wild Wings (NASDAQ: BWLD) is one example, with the restaurant chain having dealt with the ups and downs of chicken-wing prices and other factors that affect its quarterly performance. The service's tenacity in believing in Buffalo Wild Wings' long-term prospects has helped investors make as much as 1,050% by following the Hidden Gems recommendation.
How you can use Hidden Gems to find winning stocks
For new investors, Motley Fool Hidden Gems makes things easy. Once you subscribe, you'll get immediate access to our list of Core Stocks, which are the picks that the service believes form the foundation of what defines a hidden gem in the stock market. You'll also get the Best Buys Now list for timely recommendations, along with the two newest stock picks and the research to back them up.
Best of all, right now, you can sign up for Motley Fool Hidden Gems at a special introductory rate. Rather than paying our usual price, take advantage of this offer and pay a significant discount to list price. You'll then get two new stock recommendations every month, along with all the resources that Hidden Gems offers its subscribers.
Investors who truly want to find undiscovered stocks with huge potential can't afford to wait for other investors to catch on. One reason why Motley Fool Hidden Gems is available at such an attractive price is to put an end to procrastination and get people into the service quickly. Click here to join the Motley Fool Hidden Gems community today and get the help you need to find what could become tomorrow's best-performing stocks.
The Motley Fool owns shares of and recommends Buffalo Wild Wings, TransDigm Group, and Under Armour (A shares). 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.