Facebook is a tragic prospect for a high-tech investor right now. On one hand, it’s a digital juggernaut, and on the other, it’s fallen under intense congressional scrutiny, which has caused its stock price to drop roughly 15%
This scrutiny was based on whistleblower comments around the allegations that the company knew that its Instagram app posed a serious mental health challenge for teenage girls. Not only that but there have also been reports of a slowed rollout of several upcoming products according to the Wall Street Journal.
But with how big the digital advertising space is, and we are talking triple-digit billions, we definitely want to be invested in this industry.
Fortunately, we have the opportunity to invest in a digital ad leader that gives us a broad play on the entire sector and that has crushed Facebook’s returns over the last five years by a whopping 1,317%.
Unlike Facebook, it’s a company that is in no way mired in controversy. In fact, most investors have never even heard of it despite top-tier management and excellent operations.
This digital ad firm has actually grown enough in just five years to have turned a stake of $25,000 into $588,500, with gains of no less than 2,254%.
While this one example of growth may be in the past, the basic idea still applies to the future.
Today, let me show you why this is a better investment than Facebook and how it will double two more times in less than three years…
Better Than Facebook
Facebook is a tough business. It sells hardware for the home, a VR headset, and has several different web properties that all depend on people going back to it day in and day out. If users find a new social website, it could spell the end for Facebook in an instant. That is a lot of business to manage and worry about especially since they are dependent on ad revenue from their own websites.
That’s why I’m telling you that The Trade Desk Inc. (TTD) has built the perfect business model for today ‘s changing ad landscape as one of the top platform-agnostic advertising businesses.
The End of TV Commercials
The firm ‘s broad and growing roster of digital ad management tools are proving hugely disruptive to the hide-bound ad industry where newspaper and TV ads continue to fade into irrelevance.
Last year, TV ads were so weak that eMarketer lowered its forecast for domestic spending by 15% to $67.5 billion. Even in 2019, a year not affected by the pandemic, US TV firms still only brought in an estimated $70.6 billion.
With digital advertising, it’s a whole different story. Data compiled by Statista shows digital advertising in the US last year had a value of $139.8 billion, up 12.2% from the year before. Over the decade ended in 2020, this sector has grown by 437.7% from 2010 spending of $26 billion.
It’s hardly a surprise. At this point, and in this modern economy, when some aspect of business goes digital, it’s probably going to do better than its analog equivalent.
Multiplying Sales
Based in Ventura, CA, the Trade Desk has built a platform that can scale like crazy. The firm’s clients can buy ads from more than 70 different exchanges and networks.
We’re talking roughly 580 billion ad impressions and roughly 450 million devices across the globe per day.
Not bad for a company that as recently as May 2011 saw spending per day on its platform come in at just eight cents. By 2018, it saw its first $10 million day.
Even better, this is a growth company with a history of making lots of money. It has been consistently profitable since 2013.
I believe that this earnings track record has played a huge role in the company’s success and is one of the main reasons shareholders have done so well.
It’s also no slouch when it comes to racking up sales gains. Back in 2014, the Trade Desk had sales of just $45 million. Last year, that figure climbed to $836 million, a 39% gain from 2019.
So, in the space of just six years, sales grew by 1,758%.
Double Prospects
As you might imagine, shareholders have cleaned up. In just five years, the stock has advanced a stunning 2,254%. That’s enough to turn a modest $25,000 stake into $588,500.
And while that is amazing, it’s not enough to turn someone into a millionaire. Or is it?
Well, over the last three years, earnings have grown by an average 59%, meaning they double roughly every 14.4 months.
So, by Christmas 2022, that original $25,000 would have finished its journey to nearly $1.2 million, and any investment made today would have had the chance to at least double.
There’s plenty of upside ahead after that. Indeed, in a follow chat I’ll reveal a new catalyst.
And I’ll also show you why I believe investors could make another 200% on this stock in less than 30 months.
Cheers and good investing,
— Michael A. Robinson
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Source: Strategic Tech Investor