An investment strategy that focuses on satellite stocks
aren’t the brand names you’re familiar with, but they benefit from their success and market dominance.
For example, take Apple. As the brand and company grow ever more popular, over time its share price rises. This leads lots of investors to buy, which sends the share price higher.
By finding satellite stocks that benefit from these companies, you can profit as their share prices rise too.
What are satellite stocks?
Many large companies don’t make and do everything themselves. They outsource many of the things they need to other companies.
Take Apple, James Altucher in Palm Beach Daily
explains. It doesn’t make the glass for its iPhones, it outsources this task to another company.
This other company is a satellite stock. And a satellite stock has the potential to see its earnings rise much faster than a mega cap stock.
There are many other examples…
Satellites stocks that have done well
Skyworks Solutions, which is listed on the NASDAQ, builds semiconductors for Apple and other major phone manufacturers.
The more people who buy these phones, the more semiconductors this company has to produce.
In the past year, its shares are 75% higher against Apple’s 25% rise.
Take Palo Alto Networks, listed on the New York Stock Exchange. This is a network security provider. When massive corporations want to tighten up their network security, particularly after a breach, they outsource the job to a company just like this.
Palo Alto Networks is up over 200% since major companies like Target and Home Depot’s systems were hacked in the past two years, thanks to their business.
It can take a bit of digging to find these satellite companies, but they have the potential to make you a lot of money, especially if they’re working for the mega stocks on the world’s stock markets.
So there you have it. How to benefit from the success of the stock market giants without buying one.
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