Making more than 1,000% in less than 12 months is more than any investor could ask for. The problem is that many investors look towards high-growth industries to make such explosive returns.
The problem with this line of thinking is that everyone else is doing the same. So if you’re not first in or very lucky, you’ll either be buying into a hyped-up price or a company destined to fail.
Invest in Low-Growth?
That’s why it’s not such a bad idea to look in low- or no-growth industries.
Take television, as an example.
Compared to online streaming and mobile phones, the TV industry isn’t one that makes you think of rapid growth. But had you put $10,000 into Big Un Ltd [ASX:BIG] at the start of this year, you’d now be sitting on $106,522!
Big Un is a review content-creation company. The stock is up 1,065% this year and could possibly climb higher before the year end.
Source: Google Finance
This morning, Big Un announced that it had entered into a partnership agreement with Australia New Channel Pty. Big Un will broadcast their Wayfarer Travel Show series on the Sky Business channel.
The executive travel show is targeted at business travellers. It gives them a guide on the best places to eat, stay and play in various cities including, London, New York, Los Angeles, Paris, Berlin and Hawaii.
The announcement encouraged investors to bid Big Un’s stock up 6% today to $2.65 per share.
What Now for Big Un?
The excitement for Big Un will die down eventually. But for now, investors are mesmerised by its growth. Over the past three years, Big Un has grown sales on a compounded annual basis of 499%. Yet the company still makes a loss.
There’s also another factor at play. Big Un has tried to associate itself with the likes of Facebook, Inc. [NASDAQ:FB] and Apple, Inc. [NASDAQ:AAPL]. Both technology giants are actively looking for video content.
Allegedly, Apple is planning to spend US$1 billion on original videos. According to Big Un, it could be a huge opportunity for the company. Up until now, it hasn’t taken much convincing for investors to see it Big Un’s way.
Of course, it’s far too early to tell if Big Un will be approached by either Apple or Facebook. Until then, investors will continue to hope Big Un’s content is enough to skyrocket revenues and profitability.
Junior Analyst, Money Morning
PS: Want to find more stocks that could potentially rocket up in a matter of months? Check out these three small-cap stocks trading on the ASX right now.