Cisco (CSCO) was one of the greatest investments of the 1990s, surging from a low of eight cents (adjusted for many splits) at the start of 1990 to a high of 82 in 2000. If you’d been lucky enough and courageous enough to enjoy the whole ride, you could have turned $10,000 into more than $10 million.
Of course, at the start of 1990, few investors knew about Cisco.
But even if you’d waited until the start of 1995, when Cisco was very well known, you still could have done very well, turning $10,000 into more than $440,000 … if you’d sold at the top.
But Cisco’s salad days are long gone.
And over the past decade, even though revenues have roughly doubled, the stock has come nowhere near its old high. For the past seven years it’s been as lively as a sloth on a hot summer day. And it doesn’t even pay a dividend!
Then last week, after the company reported fourth quarter results that beat estimates, it cautioned investors that government spending was spotty and sales of cable-top boxes were slowing, concluding with an anemic full-year forecast.
In return, investors sold the stock vigorously. It was down more than 15% for the week.
But there were winners, and some of them were subscribers to Cabot Options Trader, who had been advised on Wednesday to buy the March 23 Cisco Put.
Readers who followed the advice of editor Rick Pendergraft saw those options soar in value as the stock plummeted on Thursday, while Rick quickly advised taking a profit of 148%.
Now, trading in not options is not for everyone. Far more people would rather take the less exciting road to wealth, ideally by discovering and investing in the next Cisco.
Well, I have one candidate for you that I’ve mentioned here before.
Hopefully, you’ve bought some, because the stock has done very well, gaining 93% since I first mentioned it last August. Yet it’s still unknown to the majority of investors!
The company is Polypore (PPO).
Its products are precisely engineered membranes that regulate the passage of gases and fluids in controlled environments.
Part of Polypore’s business is in medical fields—regulating the flow of blood plasma, for example—but that’s not where the exciting growth is.
The exciting growth is in energy.
Some of the company’s membranes go into the lead/acid batteries of traditional cars. Polypore supplies more than 50% of the world’s demand for high performance polyethylene battery separators to the lead/acid battery industry, and business is booming in some areas, particularly China.
But even more exciting is the growth of the lithium battery market, where the company has a dominant presence. Notebook computers, mobile telephones, digital cameras, power tools and more use lithium batteries.
The biggest winner for Polypore today is Apple’s iPad, which accounted for 17% of Apple’s fourth quarter revenues.
But looking beyond the iPad, I see a big market for batteries—and Polypore’s membranes—in hybrid vehicles and all-electric vehicles.
And then I see a big market for batteries—and Polypore’s membranes—in wind power and solar power installations. The batteries will be needed to store power, and to smooth delivery, and I think these markets have great growth in front of them.
In the third quarter, Polypore saw revenues grow 10% to $152 million and earnings jump 59% to $0.27 per share.
Fourth quarter earnings will be released after U.S. markets close on Wednesday, February 23, and I’m confident they’ll be very good.
Polypore (PPO) has been recommended by the advisory I edit, Cabot Stock of the Month Report. Since June of last year, my subscribers have profits of 134%. And every week, I send them an update by email telling them exactly what to do with their shares of PPO.
If that’s what you need for investment success, click here.