[Editor’s Note: Today we continue our focus on Sam Volkering’s Water Bear Stock success stories.
As you’ll see in this new report, where Sam covers his four top picks for next year, Water Bear Stocks are the SAS of full-on, outer-limit market conditions. As Sam says, ‘I believe they are the key to making very big, very fast capital gains in extreme market conditions. They allow you to make ‘bagger’ gains of despite the current stock market climate…but because of it.’
Below is a brilliant example of how correctly selected Water Bears can thrive in a falling market…]
A 103.4% gain in nine months is pretty remarkable. Making that 103.4% while the wider stock market fell by over 6% is an even more attractive proposition.
That’s the modus operandi of Sam Volkering’s Water Bear stocks. Equities that thrive in extreme market conditions. And that was the gain made by one of them, a global innovator in the outdoor advertising market, between August 2015 and June 2016. It’s an excellent example of how catching a ‘disruptor’ at the right time can make you a lot of money — even in a rotten market.
In January last year there was a billboard on Airport drive, as you exited the Tullamarine Freeway heading to Melbourne airport.
It was for Porsche. But it was no ordinary billboard. What it did, for the week it was tested, was pick out Porsches driving towards it. When it ‘spotted’ one, it changed. Its wording morphed into, ‘It’s so easy to pick you out in a crowd.’
It sounds like science fiction. But this is the new breed of advertising. Interactive, innovative, world-leading advertising. And it’s all happening right in Australia; largely thanks to one little-known, ASX-listed small-cap advertising company. A company taking the global industry into a new era.
Sam Volkering added Aussie outdoor-advertising specialist oOh!Media to his Water Bear stock list in August 2015. He realised they were about to launch a major assault on a ballooning new global market worth $13.4 billion.
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What Does oOh!Media Ltd Do?
Out-of-home (OOH) advertising market is an old and mature market in Australia, and around the world. You see it everywhere. On the streets, the sides of buildings, at the train station. PricewaterhouseCoopers (PwC) estimated the global OOH advertising market was worth US$36.3 billion in 2014. They further forecast that by 2019 the OOH advertising market will be worth $45.37 billion per year.
But there’s an evolution taking place. This new market is called Digital Out-Of-Home (DOOH) advertising. It’s pretty much what its name says. The Interactive Advertising Bureau (IAB) explains DOOH as, ‘A variety of screen shapes, sizes, and levels of interactivity. From digital billboards and signs on taxis, to digital signage at airport gates and gyms and waiting rooms, these varieties underline a necessary bridge between context and location in relevance and favourable recall.’
PwC forecast that the digital OOH advertising will almost double from US$9.71 billion in 2014 to US$18.04 billion in 2019. They say the best penetration will be in major cities. For example, in Singapore over 60% of OOH spend will be on digital media.
The developing world will see substantial growth in both physical and digital advertising. In some regions like India, both will grow at double digit pace every year.
But in developed OOH markets, like the UK and Belgium, DOOH is replacing the physical, static advertising. PwC has identified a mass transition from old static billboards and traffic furniture advertising to interactive and engaging advertising.
And last year Sam identified a small Australian company that was about to become one of the leaders in this transition.
Why the oOh!Media Share Price Rose
When he recommended oOh!Media last August his target gain was 106%. Sam explained that to achieve that return, the company would barely have to do anything. The main opportunity Sam highlighted was the fact that the market simply undervalued the company. He was right.
In June 2016, after just nine months on the buy list, oOh!Media breached the 106% return mark. The next day the stock slid back slightly, and Sam advised his readers to bank the 103.4% gain. He wrote, ‘With the market valuing the company in the same light as its competitors, I believe the company is at fair value. I don’t think there are incredible amounts of gains left. Now, I could be wrong, but, with over 100% total returns, the stock has done exactly as I predicted.’
As is often the case, Sam was on the money with his recommendation to take the gain off the day. oOh!Media shares reached $4.95 on the day he issued the sell call. Yesterday they were trading at $4.75.