Only If I Knew

Netflix (NYSE: NFLX) ($10 to $885; 8,850%)

Netflix invented “Binge-Watching.”

When watching Season 5 of “House of Cards,” do you realize that Netflix has fundamentally changed the way you watch movies.  If it were six years ago, we would have talked about how Netflix completely disrupted the DVD rental market with their mail order service.  They would have crushed Blockbuster and marginalized Red Box by 2010.  After that, Netflix started focusing on online-streaming videos and initiating the “cord-cutting and cord-shaving” phenomenon. These types of services are taking customers from the Pay TV industry at a rapid pace. In 2014 alone, Pay TV lost approximately 8.2%, or 1.4 million households to online streaming services. About 42%, or 7.7 million households, drastically cut down there Pay TV subscription packages, and acquired streaming services as a replacement.  Today, Netflix has our full attention because it controls more than 40% of the online streaming market by producing award-winning “original-content” shows and movies, another original idea.

If you had invested $10 on 10 shares of NFLX around 2002, it will worth $885 today and 8850% return.

Keurig Green Mountain, Inc. (NYSE: GMCR) ($5 to $917; 18,300%)

Keurig revolutionized the coffee culture by enabling consumers drinking “any beverage at any time.”

Keurig Green Mountain, Inc. (GMCR) produces single serve coffee brewers and pods.  The introduction of the Keurig brewer system in 2012 was a major innovation to the coffee industry.  GMCR transformed coffee brewing from a multiple step process to a simple one touch routine, allowing customers to enjoy coffee quickly and conveniently.

The functionality of the Keurig machine has captured the attention of consumers who enjoy the intuitive and straightforward nature of brewing their favorite cup of coffee. The ability to make different flavors of coffee in multiple successions with their machine personalized coffee making for homes, offices, schools, and businesses has allowed Keurig to become the leader of the single serve coffee industry.

Since the launch of the original Keurig, approximately 25% of households and offices in the United States have placed a Keurig system on their countertop. The mainstream adoption cycle indicates the Keurig brand is still in an early adoption stage.  Disruptive innovation changes consumer behavior. The company has been able to do just that, offering solutions to problems that consumers didn’t know they had with their coffee. There is still a vast market for Keurig Green Mountain to capture, with an estimated 70-75 million households using a coffeemaker daily.

If you had invested $5 on 10 shares of GMCR around 1993, you would have sold them to the private equity firm at March 2016 for $917.  That was 18340% return.

Alexion Pharmaceuticals (NYSE: ALXN) ($23 to $1130; 4,186%)

Soliris costs Medicare $400,000, per patient, per year, for life.

Alexion focuses on the development and commercialization of therapeutic products for “ultra-rare diseases,”   which current treatments are either non-existent or inadequate. Their main product, Soliris, is the first and only therapeutic approved for patients with either of two severe and ultra-rare disorders in the immune system: paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS).  By targeting ultra-rare diseases with no other treatments, Alexion has been able to place themselves into a market with virtually no competitors.  The diseases are extremely rare and the total number of patients diagnosed is relatively small, but the treatment provided is extremely life-changing and necessary for patients.

This business model will continue to benefit Alexion, as it works towards the approval of two new drugs, Strensiq and Kanuma, which also treat diseases that currently have no other existing treatments.

If you had invested $23 on 10 shares of ALXN around 1996, they worth $1130 today and 4186% return.

Stericycle (NASDAQ: SRCL) ($23 to $1007; 4,378%)

It is a dirty business, but someone has to do it.

Stericyle is the global leader in medical and biohazards waste disposal services with operations across fourteen countries in the Americas, Europe, and Asia.  Their customers are hospitals, physician practices, laboratories, and other healthcare providers. As government regulations require companies to destroy any living cells on medical waste, this process can be very expensive and time consuming. Stericycle has a patent-protected technology which revolutionized how medical waste is disposed.  Their electro-thermal deactivation can kill all living cells on medical waste faster than anyone else at half the cost.  This technology also has zero toxic emissions, making them the only waste specialist that has no adverse effects on the environment. Stericycle is a market leader with its global market share 13%.

If you had invested $23 on 10 shares of SRCL around 1996, the shares worth $1007 today and 4378% return.

Berkshire Hathaway (NYSE: BRK.A) ($12 to $2121250; 1,826,163%)

Investing in Berkshire is investing in Warren Buffett.

Buffett is known to only invest in a “simple and understandable business” with “favorable long-term prospect,” and always “buy the business at a discount to intrinsic value.” The Oracle has to be the only disciplined one who can execute the investment tenants diligently over a 50-year period.  If you are a loyal investor, Berkshire has returned you 1,826,163% between 1965-2014, an annual return of 21.6%, compared with 9.9% S&P 500 return.

 

 

 

 

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