<<

_2021 The Hunt for 10X Stocks is Back “Buy the Dip” Summit Dear fellow investor,

It won’t be long ...

Come this Wednesday, June 9th, at 9:30 AM ET, our Motley Fool team will be going LIVE with our one-day-only “Buy the Dip Summit.”

Remember, even the market’s most high-quality companies often “go on sale.”

• In 2012, sunk82% long after it had established its leadership in streaming. If you had “bought the dip,” you’d be up 65X today.

• Tesla dipped 37% in less than two months in late 2013 more than a full year after the Model S took the auto world by storm. If you had “bought the dip” on Tesla at that time, you’d be up 26X today.

• NVIDIA dropped by 56% in late 2018 years after it became the lead- ing AI semiconductor company. Buying the dip in NVIDIA would have resulted in 5X gains in just two and a half years.

Today, we may be in a “10X Sweet Spot” where dozens of high-quality companies with 10X growth potential have suddenly sold off.

To give you just a brief preview of the kinds of stocks we’ll be discussing at Wednesday’s “Buy the Dip Summit” you’ll find three stocks in this report that are: • Trading well below recent highs • Leaders in industries with massive upside potential • Trade at discounts of 53% to 98% their Wall Street price targets • Possess what Motley Fool analysts believe is the potential for 10X upside

But once again, this report is just a small preview of the “buy the dip” opportunities you’ll discover at Wednesday’s “Buy the Dip Summit,” so make sure to sign up for our text alerts and calendar reminders so you don’t miss this one-day event! “Buy the Dip” Stock No. 1 // CuriosityStream Trading at more than 50% off its recent highs

The Background CuriosityStream is a video platform that Nasdaq: CURI allows subscribers to watch thousands of Recent Price (June 1 Close): $11.76 documentaries from anywhere at any time. CuriosityStream’s content Wall Street 1-Year Price Target: $18 library includes award-winning informational programs, including subscriber exclusives Implied Upside: 53% and original programming from the company itself. CuriosityStream offers monthly or Why it could 10x? A fast-growing annual subscription packages starting at streaming upstart that’s 1/300th the $2.99 a month. size of Netflix

Growth & Economics Revenue growth has been rapid as the CuriosityStream platform has gained traction. Why we think this In the first nine months of 2020, sales jumped stock has 10X nearly 150%, and gross margin expanded to potential 61%. The company gets revenue both from Few upstart companies can boast founders customer subscriptions and from licensing with decades of experience in their industry fees on its self-produced content. Further and the drive to make a long-held dream a monetization opportunities should grow well reality. CuriosityStream CEO into the future. is a proven leader, and he’s all in on CuriosityStream, retaining a more than 40% economic stake in the company as well as voting control through super-voting shares. As competitive as television and streaming are right now, CuriosityStream’s educational programming niche is arguably a bit less cutthroat. With an already-strong reputation in that niche, CuriosityStream has some first-mover advantages that could turn into a huge opportunity if it keeps executing well. Moreover, with a market cap that’s still below $1 billion, a 10x rise from current levels could come quickly while still leaving considerable room for further gains. “Buy the Dip” Stock No. 2 // Invitae Trading at more than 53% off its recent highs

The Background Invitae is a genetic testing company focused NYSE: NVTA on meeting the patient’s current needs. Recent Price (June 1 Close): $28.15 If they’re an expectant parent, there’s a genetic test for that. Worried about a specific Wall Street 1-Year Price Target: $44.50 condition, such as hereditary cancer? Invitae has a genetic test. Through the acquisition Implied Upside: 58% of ArcherDx in October 2020, Invitae gained access to the $45 billion market for testing Why it could 10x? A leading biotech tumors to optimize treatments. company that’s captured only a small fraction of a $150 billion market

Growth & Economics Last year was a little rough for Invitae, with 2020 preliminary revenue expected to be about 28% higher than 2019. While there are certainly some companies that would take that Why we think this kind of growth — pandemic or not — Invitae’s management is looking for revenue growth of stock has 10X at least 60% this year, with guidance for growth potential in the 50% to 60% range over the next few To support a market cap of $55 billion years. (roughly ten-fold its value today) with a 20% operating margin and a price-to-earnings ratio With 2020 revenue of around $280 million, of 20, Invitae would need slightly north of Invitae has only captured a small fraction of $13 billion in revenue. To grow from the $450 the $150 billion genetic testing market. Even at million in revenue management has guided growth of 50% to 60% annually, it’ll take a while for this year to $13 billion over 10 years would to saturate the addressable market, especially require a growth rate of just under 40%. That since it’s likely to grow as the utility of genetic pace is actually below what the company is testing improves. Invitae’s platform, including forecasting in the coming years, but growth a chatbot and diagnosis driven by artificial will likely slow across the decade. Given the intelligence, makes it easier for doctors and size of Invitae’s market opportunity we believe patients to get their genetic information and this scenario is well within reason. promotes repeat customers. “Buy the Dip” Stock No. 3 // Compass Pathways Trading at more than 45% off its recent highs

The Background Nasdaq: CMPS Compass Pathways is a biotech company focused Recent Price (June 1 Close): $34.46 on developing drugs for mental health. The company’s lead drug candidate is a proprietary Wall Street 1-Year Price Target: $68.29 formulation of psilocybin that goes by the code name COMP360. Psilocybin is a psychedelic that’s Implied Upside: 98% found in various mushrooms. COMP360 is currently being studied in a phase 2b clinical trial, with data Why it could 10x? Developing a drug expected by the end of this year. that could be a game-change for depression treatment Growth & Economics The company is years away from generating revenue. And depending on how much additional research and development it’s doing when COMP360 is approved, it could be a few additional years after the first revenue comes in before Compass generates a profit. So why are we so interested in Compass? Approximately 320 million people have depression worldwide. About two-thirds Why we think this of them can be treated with currently available stock has 10X medications, but that still leaves about 100 million potential people with treatment-resistant depression. The path to 10X returns is pretty In the U.S. alone, the economic burden from people straightforward: Get COMP360 approved in with treatment-resistant depression is estimated to multiple countries and be on a path toward be more than $200 billion per year. Eliminating those $3 billion in sales. That assumes investors costs will make it easy for Compass to justify the will value it like other drugmakers, at use and price of COMP360 if the clinical trials prove around 5 times peak sales. the drug works. Keep in mind that the valuation chart Compass has the backing of billionaire entrepreneur from here to 10x is likely to be very lumpy. and venture capitalist Peter Thiel, whose funds Development-stage biotechs are valued on owned 7.5% of Compass before it IPO’d (and still their potential future sales and earnings, own 6%). Thiel Capital’s chief medical officer, which is discounted based on the risk of Jason Camm, serves on the company’s board of potential failure. Successful phase 2 and directors. While investments by smart money aren’t phase 3 clinical trials will reduce the risk, a guarantee of success, we take it as a sign that which should result in substantial jumps in Compass has substantial potential. the valuations after each binary event. See you Wednesday, June 9th, at 9:30 AM ET!

Don’t forget to sign up for our text alert and calendar reminder so you don’t miss this one-day event!

“Buy the Dip” Summit