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[CASE STUDY] 3 “Catalyst-Driven” Investing Success Stories

By Investing Daily Analysts on January 11, 2016

It used to be you could anticipate and leverage certain economic cycles, seasons and movements in the market, like clockwork.

Brick and mortar retailers for instance, could ALWAYS anticipate a healthy 4th quarter. But more and more, we’re learning the hard way that this isn’t the case.

And that’s one of the reasons that I’m excited to introduce you to an approach to investing that isn’t subject to high-level economic cycles, what’s known as “top-down” investing.

Instead my system, which I call the “Launchpad Catalyst Protocol”, turns this approach on its head and focuses on the idiosyncrasies of individual companies. Specifically, I’m looking for under-appreciated “catalysts” that have the power to drive a stock higher regardless of macroeconomic circumstances.

You don’t typically find these kinds of insights on the front page of the Wall Street Journal, nor buried inside even quality publications like Barron’s until a story plays out and the money is already made.

No, this information is typically out of the public eye, available only to those who know where to look for it.

In more than two decades of detailed hedge-fund research experience, my team and I were able to consistently locate actionable “catalysts” just in time to take profitable advantage.

For that to happen, it required a mindset and approach that’s rare these days. Really, it’s the critical distinction that unchains you from short-term thinking.

You see, today’s investors are constantly buying and selling, their analysis (if you want to call it analysis) is often very short sighted. It’s like they’ve been implicitly trained (or “brainwashed”) that way because the market is so volatile.

But here’s what they miss all too often: a stock’s underlying business trend. As a result, even though extremely profitable “catalysts” are right in front of their eyes, they’re unable to see them.

That means time after time, they miss magnificent opportunities for amazing gains.

Maybe caught in the hysteria of the market, you’ve had this happen to you as well. Hopefully after learning more about my approach, those days are over.

Here are 3 short case studies of the Launchpad Catalyst Protocol in action…

Case Study: Electronic Arts

ea chart

Electronic Arts’ stock USED TO BE one to bet on when the company had a new exciting title released or when a new gaming platform was being introduced.

However back in 2014, during my research, I identified a huge shift.

Digital revenue, which is MORE PROFITABLE than the rest of EA’s business, began to positively impact earnings. These earnings improvements would now be MORE RELIABLE, avoiding the volatility of a poorly-received title. (Although analysts didn’t notice it immediately.)

Investors who bought the stock based on this “catalytic” shift, enjoyed gains of 71% in the months that followed. This widely outperformed a flat market.

Case Study: Expedia

expedia chart

Purchasing a major competitor is ALWAYS a catalytic event, but it’s NOT always a good one.

But with Expedia’s February 12, 2015 acquisition of Orbitz, the company built an instant and large moat around the company. Luckily, it was massively under-appreciated at first.

After all, the company would now be insulated against the surging competition for airline partners and lower fares. The stock went on to surge 61% in just over 6 months, while the Dow and S&P were flatter than a pancake.

As a bonus, Expedia also gained instant access to better air bookings to improve customer loyalty. I estimate that will turn this already strong performer into a 100%+ winner in the coming months. 

Case Study: Nutrisystem Inc.

ntri chart

It’s difficult to know exactly when the turnaround in a beaten up stock is sustainable.

Nutrisystem first gapped up in November 2013 but I deliberately waited almost a year before seeing a trading pattern that helped me determine whether the company’s new products had staying power to drive earnings higher.

The wait paid off.

After I reviewed Nutrisystem’s new products and added it to my list, the stock posted a quick 60% gain in about 90 days (VERSUS a 10% decline in the market).

Yes, in recent months shares have come back to Earth. And that brings me to an important point.

You must us a disciplined approach to invest successfully long term. Time and time again, I’ve left a stock like Nutrisystem that’s seen its catalyst event play out, and swapped into a far better opportunity.

Now don’t get me wrong, nothing in the market is guaranteed.

Even an experienced approach like mine will hit a few speed bumps now and then. But with an average 37% gain in the past year, in a market that was flailing throughout 2015, those bumps didn’t add up to much.

My approach helps eliminates the guesswork from the market…

And when you take out the guesswork, when you let true information guide your decision making, you eliminate the things that can destroy your wealth…

It’s the reason I only recommend stocks that pass my Launchpad Status Protocol’s criteria AND have the potential to AT LEAST DOUBLE  in a just-released premium trading service Profit Catalyst Alert.

Just a few days ago, I released instructions on 3 trades that have a specific, measurable catalyst powerful enough to double share prices in 2016 (regardless of the overall market’s gyrations).

Click here now to learn more about my system, and get the full trade details.

 


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