It's no easy feat to match the returns online travel leader Priceline Group has delivered to its investors. Though its shares have had their up and downs, the company debuted on the NASDAQ exchange for a stock-split adjusted price of just $96 a share back in 1999. Today? Priceline is trading around $1,900 a share.
When we asked a few of our investors for stocks that offer the chance for Priceline-like returns, finding even three took some thought. But come up with them they did: Internet of Things upstart CalAmp (NASDAQ: CAMP), alternative energy provider TPI Composites (NASDAQ: TPIC), and distributor Constellation Brands (NYSE: STZ).
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It's a brave, new world
Tim Brugger (CalAmp): Priceline shareholders who chose to weather the storm in the early 2000s have been rewarded handsomely, to say the least. To find a stock with Priceline-like return potential I first thought about an industry that's on the cusp of exploding, and then a company that's poised to ride that wave.
The industry that immediately came to mind was the Internet of Things (IoT), and the business just itching to benefit is connectivity provider CalAmp. If you haven't heard of the company, you're not alone. The focus of CalAmp's business is connecting IoT gadgets, particularly in the industrial and smart car markets -- both of which are expected to skyrocket in the coming years.
Though its stock is up 57% this year, CalAmp is just scratching the surface of its potential. Excluding the $6.7 million its now defunct satellite unit generated a year ago, CalAmp's $89.8 million in sales last quarter was a 7% improvement. Better still, after securing the largest software-as-a-service (SaaS) contract in its history, as well as several new industrial and government contracts, CalAmp's growth is beginning to gather steam.
Software and subscription sales are on the rise, but the company's bread and butter is its mobile resource management (MRM) telematics solutions, which allow multiple connected devices to communicate with each other while on the move. MRM sales soared 29% to a record-breaking $38.1 million, and with its recent wins, investors can expect more of the same going forward.
4x in 3 years is better than 3x in 5 years
Rich Smith: (TPI Composites): With its shares having tripled in price over the past five years, Priceline Group has come a long way from its William Shatner-approved "name your own price" origins. But there's one stock I think could go even farther, even faster: TPI Composites.
Wind begins nowhere and never ends, flowing round the globe in an endless, renewable energy loop. Being literally powered by the wind, TPI Composites stock could grow for nearly as long.
You see, while the name may not be familiar, TPI Composites is actually the nation's biggest manufacturer of blades for wind turbines, an industry that, according to the Department of Energy, could provide 20% of the nation's electricity by 2020 -- and 35% by 2050. Currently, General Electric (NYSE: GE) is the biggest company serving that market (as a manufacturer of wind turbines) -- and TPI supplies blades to GE.
TPI Composites is already strongly profitable and even more strongly free cash flow-positive ($35 million in cash profits produced over the past year). With financial backing from GE on one end, and a steady stream of sales to GE on the other, S&P Global Market Intelligence data predict TPI Composites will more than quadruple its $0.48 in fiscal year 2016 profits by 2020, earning as much as $2.21 per share that year. Assuming the share price moves in tandem, that could result in as much as a fourfold rise in share value in just three years -- a significantly better return than even Priceline has produced lately.
Huge growth through acquisitions
Jeremy Bowman (Constellation Brands): The Priceline Group has been one of the best-performing stocks over the last decade, up nearly 2,000% thanks in large part to its killer acquisition of Booking.com in 2005. Another stock that seems to be in an earlier phase of such a growth spurt is Constellation Brands, which has rocketed 500% higher over the last five years.
If you don't recognize the Constellation name, chances are, you know of some its brands such as Corona, Modelo, and Pacifico, which it distributes in the U.S. The company also sells spirits such as Svedka Vodka and is the world's leading wine company with dozens of brands. Constellation's share price has surged since it gained the exclusive right to distribute Grupo Modelo brands like Corona in the U.S. when it acquired Crown Imports from AB InBev.
Constellation has ridden the popularity of Mexican beer to strong growth and record profits by expanding capacity and distribution, but management has not gotten complacent. The company continues to adjust its portfolio with craft brewery acquisitions like Ballast Point and Funky Buddha, and the sale of its Canadian wine business. Just recently, it also took a stake in Canopy Growth Corp., a Canadian medicinal cannabis company.
Constellation has continued its run with a 39% rise so far this year, and with smart management, forward-looking acquisitions, and control of popular brands, the stock looks like it's set to keep soaring.
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Jeremy Bowman has no position in any of the stocks mentioned. Rich Smith owns shares of TPI Composites Inc. Common Stock. Tim Brugger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Priceline Group. The Motley Fool recommends CalAmp. The Motley Fool has a disclosure policy.