Wouldn’t it be great if you had purchased Bitcoin when it was selling for $320 instead of $32,000? Or in electricvehicle maker Tesla’s stock just a few years ago, before it soared 1,800%?
The fund that investment expert David Mazza oversees specializes in investing in “moonshots”—high-risk companies that offer visionary products and services that change the world and the way we live…and make their investors a fortune! Mazza’s moonshots include a software firm that defends against escalating global cyberattacks…a biotech firm that supercharges the body’s immune system to kill cancer cells…and a space-flight company at the forefront of commercializing outer space.
Betting on moonshots isn’t for everyone. Owning these stocks can be a white-knuckle roller-coaster ride with the possibility of steep losses. Valuing these companies has less to do with price-to-earnings ratios and return on equity than faith and imagination.
Still, today’s world is transforming so quickly that if you get in early on these stocks—before the big money is made— you may need only a small amount of exposure to boost your overall portfolio returns for years. Bottom Line Personal asked David Mazza how investors can identify moonshot stocks and which ones his fund currently owns…
To identify moonshot potential, investors should focus on nascent industries and trends where disruptive technology is creating vast consumer markets and needs that never existed before. Next, look at small and mediumsized companies that are still in the early stages of their earnings cycles. Make sure these young companies are innovation industry leaders. My team and I do this by first comparing how much companies stress innovation in their annual reports and other SEC filings… and then by comparing how much they spend on research and development relative to their sales versus their peers.
The following companies have market capitalizations ranging from $536 million to $7.5 billion, and all have the potential for massive expansion…
Hydrogen economy: The race to wean the world off polluting fossil fuels and to power the next generation of vehicles has hydrogen fuel cells poised to take off. A fuel cell is an electrochemical device that combines colorless, odorless hydrogen fuel with oxygen to produce electricity. During the process, water vapor is generated but no carbon dioxide, the culprit blamed for climate change. Hydrogen vehicles can go farther between fill-ups than battery-powered cars, and refueling time is similar to gasoline-powered cars. Hydrogen fuel cells in vehicles take around three to five minutes to fill, compared with fully electric vehicles that may take 30 minutes or longer. Several major automakers are planning hydrogen-fuel–cell vehicles. China wants to put 1,000 hydrogen buses on the streets of Beijing for next year’s Winter Olympics. Stock we own now…
Ballard Power Systems (BLDP). The Canadian company makes hydrogen fuel cells for commercial vehicles including buses, forklifts, ferry boats and trains. About 80% of the hydrogen buses in Europe use Ballard fuel cells, and Volkswagen has an $80 million deal with Ballard aimed at manufacturing Audi hydrogen cars. Market capitalization: $4.5 billion. Recent share price: $15.12.
Natural killers: Immunotherapy treatments are tailored to strengthen your own immune system to combat cancer and infectious diseases. Scientists have focused on enhancing “natural killer” (NK) cells produced in the body’s bone marrow. New technology allows NK cells to target proteins in cancerous tumors without harming healthy tissue. The global cancer immunotherapy market is growing 10% annually and likely will reach $175 billion by 2027. Stock we own now…
ImmunityBio (IBRX) has no existing products on the market, but it boasts a pipeline of 25 immunotherapy drugs in late-stage clinical trials, including one for bladder cancer designated a breakthrough therapy by the FDA. The company’s CEO, Patrick Soon-Shiong, MD, a billionaire South African transplant surgeon, previously invented and sold the rights to the blockbuster cancer drug Abraxane. Market capitalization: $4.3 billion. Recent share price: $11.25.
Hack attack: For years, the threat from ransomware—criminals breaking into computer networks and locking up digital information until victims pay a ransom—was broadly discussed. But the threat seemed distant, and the cost of the necessary security steps was high. Now, hacking has become a national security threat, crippling food and energy providers and shutting down hospitals and big municipalities. A ransomware attack is expected to occur every 11 seconds in 2021. Stock we own now…
Varonis Systems (VRNS). Governments and national-defense agencies rely on this cybersecurity company’s software to protect sensitive data stored on premises and in the cloud. Varonis specializes in insider-threat detection. Most cyberattacks are caused by insiders or involve the hijacking of an insider’s credentials. If Varonis detects a threat, it can limit the damage from breaches by automatically locking down sensitive data. Market capitalization: $6.4 billion. Recent share price: $60.14.
The final frontier: Outer space is an integral part of our lives with orbiting satellites that allow us to connect to the Internet and get GPS directions. But fewer than 600 people have been to space. New scientific and technological advancements, such as smaller, reusable rockets, have ignited a space race that will yield commercial ventures ranging from manufacturing computer chips
in zero gravity to mining on the moon and space tourism. Spending on space ventures is expected to triple to $1.1 trillion by 2040. Stock we own now…
Virgin Galactic Holdings (SPCE). Billionaire entrepreneur Richard Branson made history this past summer when he became the first space “tourist” to reach suborbital space more than 50 miles above the New Mexico desert on the company’s VSS Unity rocketpowered spaceplane. Virgin Galactic Holdings, which designs, develops and produces its own vehicles, is the first to receive a commercial license and FAA approval to carry passengers into space. It has collected $80 million in ticket sales and deposits. Branson wants to complete 400 space flights per year, generating $1 billion in revenue per spaceport in coming years, with the potential to build dozens of spaceports around the world. Market capitalization: $6.5 billion. Recent share price: $25.37.
Operating room of the future: Despite advancements in medicine, surgery remains risky, especially with procedures involving big incisions and long hospitalizations. Even within the same hospital, there can be variations in the outcomes of the same procedure depending on the skill of the particular surgeons. Hospitals are investing in robotics and digital technologies that elevate surgical performance and allow minimally invasive surgery. Doctors use miniature cameras, remote-control instruments and 3D visualization to operate more precisely. Robotics can vastly improve surgical outcomes the same way that computerassisted driving helps to reduce car accidents. Stock we own now…
Asensus Surgical (ASXC) is a medical- device company focused on laparoscopies, minimally invasive surgeries to remove or repair damaged and diseased organs such as the gall bladder, intestines and reproductive organs. Its FDA-approved Senhance Surgical System, which has been used in more than 4,000 operations, utilizes haptic (touch) feedback that helps doctors feel what the robotic arms are doing as well as cameras that move by tracking a surgeons’ eye movements. Market capitalization: $513.2 million. Recent share price: $2.19.
