| How Have You NEVER Heard of This Company? | | By Dr. Steve Sjuggerud | | Tuesday, May 16, 2017 |
| Have you seen a list of the world's top 10 largest companies recently?
It has changed dramatically – in just a few years…
You might be surprised to hear it… But Wal-Mart (WMT) is no longer on the list. Neither is General Electric (GE). Instead, it's out with the old, in with the new…
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Take a look at this table showing the five largest companies in the world…
| Top Five Largest Companies | Market Cap | | Apple (AAPL) | $814 billion | | Alphabet (GOOG) | $652 billion | | Microsoft (MSFT) | $528 billion | | Amazon (AMZN) | $460 billion | | Facebook (FB) | $436 billion |
Can you believe it? They're all "new economy" companies! You won't find a single "old school" industrial company in the top five.
But the top 10 list is even more interesting than the top five list to me… because of one name: Tencent (TCEHY).
What? You've never heard of Tencent?
Tencent is essentially China's Facebook – and much more…
Tencent – by itself – does in China what many of the top five companies do in America. And that's one reason I predict it will someday become the world's largest company.
I've been making that prediction ever since my most recent visit to China last summer. On that trip, I saw the dramatic impact that social media (and Tencent) had on people's lives.
At the time, nobody was saying that Tencent had the potential to become the world's largest company. But take a look at what has happened to its stock market value over the last five years…
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It has gone from around $50 billion in value to more than $300 billion in value… in just five years. Just imagine where it could be five years from today.
How is it possible for one company's market value to go up so fast?
One word: growth.
Tencent has grown its sales and earnings nonstop.
You can see this in the table below. It shows the world's top 10 largest companies and the growth rates of their earnings per share ("EPS"). Take a look…
| Rank | Company | Market Cap | 5-Yr Sales | 5-Yr EPS Growth | | 1 | Apple (AAPL) | $814 billion | 7% | 6% | | 2 | Alphabet (GOOG) | $652 billion | 18% | 13% | | 3 | Microsoft (MSFT) | $528 billion | 5% | 2% | | 4 | Amazon (AMZN) | $460 billion | 22% | N/A | | 5 | Facebook (FB) | $436 billion | 50% | 90% | | 6 | Berkshire Hathaway (BRK-B) | $403 billion | 12% | 8% | | 7 | ExxonMobil (XOM) | $350 billion | -10% | 4% | | 8 | Johnson & Johnson (JNJ) | $333 billion | 2% | 4% | | 9 | Tencent (TCEHY) | $315 billion | 41% | 33% | | 10 | JPMorgan Chase (JPM) | $309 billion | -1% | 9% |
Historically, large companies have been big, slow growers… That's because once you've reached Wal-Mart's size, or Johnson & Johnson's size, it's hard to keep growing at 20% a year. You run out of customers to serve and new products for your market.
So as the table shows, Johnson & Johnson's growth has only been about 2%-4% a year over the last five years. ExxonMobil's earnings growth has matched Johnson & Johnson's. And Microsoft's has been about the same.
It doesn't take long at all to see that two companies on this list are not like the others…
Facebook (which you've heard of) and Tencent (which you might not have heard of).
These two companies are growing like crazy.
Of course, you must pay for that growth in the stock market… Facebook and Tencent are the most expensive stocks in the top 10 list.
However, these two stocks each have real potential to become the world's biggest company, if they can keep up the growth.
Microsoft is No. 3 on the list today… But with its sleepy growth rate, it's hard to make a case that it could reach the top spot again. If you want to unseat Apple at the top, you need to grow.
The list of the world's biggest companies has changed massively in recent years. At this point, the top five are all "new economy" names. To me, the most interesting name is No. 9 on the list… Tencent.
Like Facebook, it has the growth potential to one day take the crown from Apple – and become the world's largest company.
Look into Tencent, if you haven't already…
Good investing,
Steve |
A SOARING 'PICKS AND SHOVELS' PLAY IN TECH
Today, we'll check in on one of this year's top-performing stocks... Regular readers know one of our favorite ways to profit off any trend is through " picks and shovels." These companies provide the tools, products, and services vital to the success of long-term trends. Today, we'll look at this idea in the semiconductor business... Semiconductors power most of the electronics we use today. But they are expensive and difficult to make. So lots of big companies – like Facebook, Google, and Microsoft – outsource that work to other suppliers. One of the leaders in the space is Nvidia (NVDA)... The company's computer chips are in everything from video-game hardware to cellphones. Nvidia is also at the forefront of several technological revolutions that may soon change the way we live (like virtual reality and self-driving cars). Our colleague Dave Lashmet told his Stansberry Venture Technology subscribers to buy shares last year. Now, shares are hitting new all-time highs – and Dave's subscribers are up 145%. This is one picks-and-shovels play you'll want to keep an eye on... |
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| A backdoor way to own Tencent at a 14% discount... Just buying Tencent is an easy way to take advantage of the uptrend in China. But we have an even better way to own Tencent right now – at around a 14% discount... |
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