Why Now Is the Best Time to Buy My No. 1 Recommendation

The commander in chief calls one of our friends... 'We have to get our word out'... An opportunity two years in the making... Why now is the best time to buy my No. 1 recommendation... Three reasons why I love this company... Two major announcements... The window of opportunity is closing... Get 33% off with this special offer...

Editor's note: Before we get into our regular fare with Dan Ferris' latest Friday Digest, we have a big piece of news to report involving our good friend Buck Sexton over at American Consequences magazine...

'Mr. President, thank you so much for calling in, sir'...

"Thank you very much, Buck," President Donald Trump said. "It's an honor."

And so began a wide-ranging, 20-minute, live-radio discussion last night between Buck, a longtime friend of Stansberry Research and the executive editor of American Consequences, and the president of the United States on The Buck Sexton Show. (You can listen to the entire interview right here.)

The call wasn't a total surprise to Buck, a former CIA officer and up-and-coming media personality whom we last saw in person at our company's holiday party in December.

At Trump's request, Buck met with the president in the Oval Office last week. They talked for about 30 minutes, and apparently got along pretty well, as Buck wrote in American Consequences on Wednesday.

And on Thursday night, Trump dialed in live to Buck's radio show on WOR in New York toward the end of a busy day...

The president's feud with social media titans Twitter (TWTR) and Facebook (FB) became the latest breaking news out of Washington, D.C... riots were happening in Minneapolis following the death of George Floyd... and a pandemic still goes on, of course.

Trump wanted to talk about all of that with Buck, and he sounded comfortable doing it. As he said...

One of the reasons I do calls like this is, we have to get our word out. If we didn't, we wouldn't have a chance.

Regular Digest readers may recognize Buck's name and his work...

We most recently cited him in the May 6 Digest when he had our founder Porter Stansberry on his radio show to talk about the markets and the government response to COVID-19 after his "Big Lie" essay.

Buck's interview with Trump covered a variety of topics, starting with the economy...

Trump told Buck he sees signs of an economic rebound already. He mentioned that the Dow Jones Industrial Average rebounding to more than 25,000 is just the start...

You're going to see some very good numbers coming into the third quarter, and I think the fourth quarter is going to be terrific, and I think next year is going to be a great year.

We have a lot of stimulus out there, a lot of potential "to do" things. I think you're going to see some really good numbers, and I think you're starting to see that right now.

Trump then talked about more proposed "bailouts" by state governors, the government's handling of the coronavirus, and what the response may be if we see a possible "second wave" of COVID-19.

No matter what, Trump told Buck, "We will not be closing the country." The president said...

We've gotten to know what we're dealing with. It's very brutal. It's a nasty, horrible disease, and it's a shame we have to be doing this. It's a horrible thing that we've lost so many people...

I think what we might see is embers. You might see flames. You might see something and we'll get it out, one way or another. But the country is going forward, and that's the way it is... Because you break a country by doing too much of what we did.

We did the right thing. If we didn't do it, I think you would have lost 1.5 million to 2.5 million people... It would not have been acceptable. People would have said, "What is wrong with him?"

We're at 100,000, that was at the lower end. And one life is too many. This should never have happened. It's a terrible thing.

Trump also answered Buck's questions about Russia... the executive order he signed yesterday relative to social media companies... certain mainstream media companies ("They've gone insane," Trump said), and his chances against presumptive Democratic challenger Joe Biden in November's presidential election.

Again, you can listen to the full interview here. And check out Buck's work over at American Consequences magazine for free right here. Kudos for landing the interview, Buck.

Now, moving on to Dan's latest thought-provoking and insightful Digest essay...

I (Dan Ferris) have been waiting for this moment for two years...

In today's Digest, I'm going to tell you all about an opportunity to make 20% to 50% gains in the next several weeks... and as much as 15 to 20 times your money over the next several years.

But the truth is, I thought I'd have more time to get the message out when the time came.

You see, the company made two important announcements earlier this week. These developments will likely soon send the company's stock soaring much higher. And because of that, your best chance at the biggest profits could be gone in just two to three weeks.

That's why I'm breaking from my usual Friday Digest fare this week...

My Extreme Value subscribers already know all about this opportunity. But I don't want to stop there... I want to help you, our dear Digest readers, to profit as best I can, too.

Longtime readers know I don't usually talk like this...

It's just not my thing.

But when I believe I've found an incredible moneymaking opportunity, I'll do or say whatever I must (within reason and the bounds of honesty, of course) to get as many investors into it as soon as possible. And that's exactly what I'm doing right now...

So if you're interested in the chance to make several times your money in the next few years by owning shares of a highly capital-efficient small-cap stock with limited downside, an incredibly profitable business model, and the No. 1 management team in its industry, read every word of this Digest.

This is the No. 1 recommendation of my entire 22-year career... When I first told my Extreme Value subscribers about this opportunity back in January 2018, I said the stock could easily become a 20-bagger over the next five to 10 years.

A little more than two years later, it's already up more than 50% (including dividends). And as I said earlier, the company just made a pair of announcements on Tuesday that will likely send the stock much higher in the coming days, weeks, months, and years.

I'm writing about this opportunity today because I'm afraid the stock will soar out of sight in the next four to five weeks. As I'll explain, that's because I believe a whole new class of the world's biggest institutional investors will soon pour tens of millions... hundreds of millions... and eventually, billions of dollars... of investor capital into the stock.

Its market cap is less than $1 billion today, so a huge influx of capital like the one I'm expecting could push the stock up anywhere from 20% to 50% in the next several weeks. There's no guarantee of those types of gains, of course, but it has that kind of potential.

Now, you might be wondering... Why is it the No. 1 recommendation of my career?

I love this business so much for three simple reasons...

First, this company employs a great business model...

It requires virtually no new capital to continue operating indefinitely.

As Porter would describe it, this company is a "highly capital-efficient business." It doesn't need to build gigantic manufacturing plants... hold massive inventories of perishable goods or capital equipment... or pay an army of unionized workers. It's a special, royalty-like business unlike any stock recommended in any other Stansberry Research publication.

The business model is so robust that the company continued to generate healthy free cash flow ("FCF") during a major four-year downturn in its industry... allowing it to maintain its quarterly cash dividend even during the tough times that are well behind the industry now.

(Remember, FCF is what's left after management pays all operating expenses and capital outlays. It can be used to pay down debt or return to shareholders through dividends.)

And this company is an "antifragile" business, too...

That means it tends to get stronger when other businesses are under stress. Demand for its main product soared during the COVID-19 market crash and ensuing economic shutdown.

It's really hard to put a dent in this company. The business model is that good.

Second, this company takes great care of its balance sheet...

That's one of the reasons why the company can weather downturns in its industry. And it's also why I believe this stock has limited downside for investors today.

The company always has plenty of money in the bank for a rainy day... Its latest balance sheet update shows more than $45 million in cash and short-term investments and less than $20 million in debt.

That's very conservative... This company will never wind up like all those retailers or oil and gas companies going bankrupt these days.

But here's the biggest reason why this stock is my No. 1 recommendation...

I've known several members of the management team for years... and I'm certain they're the best in the business.

Regular Digest readers know my relationship with Porter dates back two decades. And as I've said before, I've worked at Stansberry Research longer than anyone but him.

But I met one of the highest officers in this company a couple of years before I even met Porter. This man is one of the greatest investors I know personally... And he always takes my calls and shoots back prompt replies to my e-mails.

So when I say that he and his team are the best in their industry, you know I'm speaking with a lot of personal experience.

When other companies in this industry load up with debt near the top of the market, this management team protects shareholders' wealth by maintaining a safe balance sheet.

And then, when its competitors head for the hills as the market crashes, my No. 1 recommendation's management team puts its capital to work at bargain prices, making huge new investments for the future.

When the market zigs, these folks zag. That's a smart – and rare – management team.

So what's the result?

The benchmark S&P 500 Index is up about 35% from its March bottom. Meanwhile, my No. 1 recommendation has already soared around 90% off its March low through today's close.

And even if the market goes down or sideways over the short term, this company's business will likely grow... In turn, that will cause its shares to move higher over the long term.

Even if the next few weeks don't play out exactly as I suspect and quickly push the company's share price up 20% to 50% in that span... it won't make a big difference to me and my Extreme Value subscribers. They're rational, long-term value investors who understand that the biggest money in the stock market isn't made overnight.

Now, before I go any further in today's Digest, an apology is in order...

I'm sorry, but I can't reveal the name of the company in this essay.

Extreme Value subscribers pay handsomely for my research and recommendations. I can't betray them by going public with my No. 1 recommendation too soon. I'm sure you understand.

But I can tell you this... I've told my subscribers that I believe every investor should buy the stock and forget they own it for the next five to 10 years. I'm certain many of them had never heard of the company before I told them about it in 2018.

I won't tell you this company's industry either, but I'll give you a hint...

I expect the extraordinary spending and borrowing our government has done in response to the COVID-19 outbreak is going to spark a severe run up in inflation... In that kind of environment, this company's share price could easily rise five-, 10-, or even 20-fold during that time.

Here's why I believe you don't have much time to get in on this once-in-a-decade opportunity...

When the company made its two announcements earlier this week, the market responded enthusiastically... The company's share price quickly broke out to new seven-year highs.

Like I said, I was expecting these announcements... But based on my conversations and e-mail exchanges with the management team, I thought I would have more time to share the wealth with as many readers as possible once they took the steps they've recently taken.

Legally, they can't ever tell me anything that's not publicly available information (and they don't). But it's still good to be able to talk with them at a moment's notice to get clarity and address subscribers' concerns about important issues. It's a luxury that 99.9% of investors and analysts simply don't have.

The opportunity is still in place today, but it could be gone by mid-June. Here's why...

Both announcements will make the stock much more attractive to the largest institutional investors in the world. These institutions represent trillions of dollars' worth of investment capital.

The company first announced a 'share consolidation'...

Some people call it a "reverse stock split." They're the same thing.

It's when a company decides to reduce the number of shares outstanding in a specific ratio.

For example, if a company has 100 million shares outstanding and executes a 1-for-2 consolidation, it'll have 50 million shares outstanding afterward. And shareholders' accounts will automatically adjust so they'll have one share for every two shares they held before.

Why would a company reduce the number of shares like that?

It's simple... to raise the share price.

If our hypothetical company's share price was $9 before the 1-for-2 consolidation, it'll automatically adjust to $18 per share after the consolidation. Again, for every two shares you owned at $9, you'll now own one share at $18.

So the company's market value remains the same. And your piece of the pie also remains the same. It's a housekeeping item that doesn't change the business... But importantly, it does change the value of the business to certain investors (more on that in a second).

Companies usually only complete share consolidations when they're in distress and have suffered a crisis and an enormous decline in the stock price. Sometimes, a company desperately needs to do the consolidation to get its share price above minimum exchange-listing requirements (usually $1 per share).

But that's not why my No. 1 recommendation just completed a share consolidation. It isn't in any danger... It's one of the healthiest public companies in the world.

This company completed a share consolidation for a much better reason...

A common rule among big institutional investors is "no stocks under $10 per share."

It's crazy... The share price has nothing to do with the fundamentals of the business. A business with a $500 share price could easily be a horrible investment, and a business with a $5 share price could easily be a fantastic investment.

Who knows why Wall Street makes the rules it makes? And who cares? These guys aren't exactly known for treating investors like family, so I ignore their silly rules whenever I can.

But the bottom line is...

My No. 1 recommendation traded for less than $10 per share until its recent consolidation. Now, it's around $38 per share. (I don't want to give too many specifics away about the share consolidation in this Digest. In the age of Google, that would be like giving you the name of the stock... and again, that simply wouldn't be fair to Extreme Value subscribers.)

In other words, all the institutional investors who couldn't buy this stock before this week because its share price was too low can buy it now.

And the share consolidation isn't the only announcement the company made this week...

My No. 1 recommendation also said it would soon list its shares on the New York Stock Exchange ('NYSE')...

Right now, the stock is only listed on a foreign stock exchange. And in the U.S., you can buy shares on the over-the-counter ("OTC") market.

Again, big institutions have a lot of rules. Many won't buy foreign-listed stocks or OTC stocks. (This company is both of those.)

So a listing on the NYSE is the last obstacle standing between this stellar sub-$1 billion market cap company and financial institutions managing literally trillions of dollars.

Once this company becomes listed on the NYSE, many institutions will want to buy it... And even better, it's likely that at least a few of these institutions will be required to buy it.

Why would they be required to buy it?

Because we live in the age of the index fund.

A couple of years ago, the Financial Times reported that there are – hold on to your hat – 70 times as many indexes globally as public companies. Indexes are used to build passive index funds, many of which are exchange-traded funds ("ETFs") that you can buy. And last year, the funds that passively buy broad U.S. stock indexes had more assets than funds that actively pick stocks for the first time.

But how can the world have 70 times more indexes than individual stocks?

Well, a single stock can qualify for several categories of index funds at the same time. Oil and gas supermajor ExxonMobil (XOM) is one of the most ridiculous examples you'll find...

It's in 213 different ETFs right now.

You'll get a piece of ExxonMobil if you invest in ETFs under the categories of energy, dividend, large cap, S&P 500, large cap value, large cap growth (yes, both value and growth), absolute return, risk parity, equal weight, buy/write income, Catholic values (because the Pope likes oil and gas?), low volatility (in an oil stock?!?), multi-factor, size factor, value factor, quality factor... and probably a bunch more I haven't discovered yet.

My No. 1 recommendation won't be nearly as popular with ETFs as ExxonMobil. But it doesn't need to be because its market cap is about $190 billion less than the energy giant's.

And my No. 1 recommendation should still find its way into plenty of these funds...

The company pays a dividend... so it could therefore wind up in hundreds of income-focused ETFs.

It's in the natural resources sector... so I believe it will be a required holding for many natural resources, materials sector, mining, and other related ETFs.

Its market cap is below $1 billion right now... so it's a shoo-in for small-cap ETFs.

And it's fairly cheap... so it could easily wind up in a value fund or two.

You get the picture. At least a half-dozen totally different types of ETFs will probably be interested in this stock... but they can't get it yet because it's not listed on a U.S. exchange.

All that will change when the company gains its NYSE listing. It has already filed its "40-F" registration form for listing on the NYSE. I e-mailed with my contacts at the company yesterday... And they expect that the NYSE listing will occur sometime in mid- to late June.

I can't confirm it, but I suspect many of the big institutions will start buying now, before the listing... They know that it's coming very soon, so they won't be violating their rules.

Anybody who read the company's announcements earlier this week knows it doesn't take long to list the stock on the NYSE once the paperwork has been filed. It's a matter of weeks at most... and maybe much less. One investor I exchanged e-mails with yesterday suggested it could happen as early as Monday. So as you can see, time is of the essence.

Now, as I said earlier, I've reserved the rest of the details for my Extreme Value subscribers...

I first recommended this stock more than two years ago. I'm hoping not to recommend selling it for at least 10 years. And we're not using a stop loss on the position... I have that much confidence in the business model and the best management team in its industry.

The stock has been up 50%... and it has been down 40%. Through it all, I haven't batted an eye. Investors who have stuck with the company since I initially recommended it have reaped a handsome dividend stream (roughly 4.8% of our initial reference price). And with the stock recently hitting a seven-year high, they're all enjoying the capital gains, too.

You might think you've missed the boat, since I've said to buy this stock for more than two years. But that's not the case at all. I don't expect the good times to end anytime soon...

Extreme Value subscribers who bought this stock will keep earning a steady stream of dividends, which will likely rise as the business keeps growing. The perfect combination of a capital-efficient business model and a stellar management team will limit their downside.

And best of all, subscribers who followed my advice will have a great chance to make several times their money in the long run. And they'll likely see 20% to 50% gains in the next few weeks as the second of this company's major announcements comes to fruition.

I've put all the details about this company into a special report called, "The Hands-Down No. 1 Pick of My Career." You'll receive this report as soon as you subscribe to Extreme Value.

As I said, this isn't my thing. I don't usually spend so much time harping on an opportunity.

But when I believe it could change the lives of thousands of our readers, I'll do whatever I can to make you aware of it. I hope you listened and read every word of today's Digest. And now, I invite you to take the next step to learn the name of this company before it's too late.

I realize Extreme Value isn't cheap, though. That's why I've arranged a special discount... For a limited time, you can get one year of Extreme Value at 33% off the regular price.

And not only will you get instant access to my No. 1 recommendation... you'll also receive my entire model portfolio as soon as you sign up. Right now, it includes more than 10 other actionable recommendations.

If you're interested in my No. 1 recommendation, don't hesitate... The opportunity could disappear forever as soon as next week. Click here to get started.

New 52-week highs (as of 5/28/20): BlackLine (BL), Quest Diagnostics (DGX), Electronic Arts (EA), and Flutter Entertainment (PDYPY).

In today's mailbag, thoughts on our first Alliance Town Hall... and a late piece of feedback on Porter's "Big Lie" essay. Do you have a comment or question? As always, let us know at feedback@stansberryresearch.com.

"[The Town Hall was] absolutely one of the best discussions I have had the pleasure of listening to! Even though I am an Alliance Partner, I still listen to all of the presentations of each individual newsletters that Stansberry has from time to time, usually in the evening with a promotional deal for signing up.

"Those presentations have given me an opportunity to see each editor and how they are viewing the current situation... The Town Hall gave us multiple editors and allowed for feedback from each other. Invaluable!

"I came away from the presentation feeling very good about my own portfolio and questioning some potential minor adjustments that I am now considering. Absolutely worth the price of admission!

"You guys keep giving me more and more value for my money... and when I first joined, my cost of admission was covered by my gains over the next 3 months. Well done!" – Stansberry Alliance member Al B.

Corey McLaughlin comment: Thanks, Al. Glad you enjoyed the presentation. That's precisely the sort of discussion our editors were aiming to provide, and we're glad to hear about the value you've gotten from being a Stansberry Alliance Partner.

As we mentioned in yesterday's Digest, if you aren't already an Alliance Partner but are interested in becoming one, you can give our team a call at 888-261-2693, Monday through Friday, 9 a.m. to 5 p.m. Eastern time.

"This is delayed, but I reread your April 17th Digest about the absolutely moronic policies being instituted by our worthless political leaders. I'm an independent. I agree with most everything you said. All of the 'experts' whiffed completely on this and we ruined our economy because of it.

"These policies were never about safety. They were about control. If it was about safety, our governors and mayors would not have violated their own policies and travelled, used services they prohibited their constituents from using, and releasing violent criminals from prison. And our corrupt media would not have exposed themselves as such hypocrites.

"I feel terrible for all of the hardworking Americans who have lost their jobs, businesses, and savings and the many of them who have been driven into not only economic hardship, but serious mental health problems as well.

"This Digest that you wrote on April 17th needs to be published for the world to see. I don't know if you did so or not, but please find a way to release it to as many people as possible even people who do not subscribe to your newsletters. We need to get back to our lives and not live in fear. Fear is not the American way." – Paid-up subscriber Rob T.

McLaughlin comment: Thanks, Rob. As a reminder, Porter's essay and all of our Digests that are more than a week old are available on our public archives page right here. Feel free to take a spin through and share them with your friends and family members.

Good investing,

Corey McLaughlin and Dan Ferris
Baltimore, Maryland and Vancouver, Washington
May 29, 2020