Chris Reilly’s note: There are over 5,000 stocks to choose from.
According to our historical 10-bagger study, around 500 of those will gain at least 1,000%.
But what about the real outliers… the rare companies that grow 5,000%, 7,500%, 10,000% or more?
Statistically, only 150 or so stocks have this potential.
Today, I talk to Chris Wood about finding them using his “perfect disruptor” framework.
A heads up: Our final Disruption_X enrollment period of the year closes tonight at midnight.
Disruption_X is our growth stock service that targets 1,000% gains or better in fast-growing stocks. It’s our newest service, and the results so far have surpassed our admittedly high expectations (go here to review).
If you’d like to join, please go here to act by midnight to claim your special pricing.
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Chris Reilly: Chris, what if you could create the perfect stock from scratch?
What does a “perfect disruptor” stock look like?
Chris Wood: First, it must be built on a breakthrough platform technology. These come around every so often.
Think the early internet of the 1990s that gave us Cisco Systems (CSCO) and Oracle Corp. (ORCL). Or the broadband era that started in the early 2010s that turbocharged Netflix (NFLX), Amazon (AMZN), Google (GOOGL), and many others.
Or cloud computing, which gave rise to many SaaS stocks that gained 1,000% or more in short order.
Reilly: Smartphones?
Wood: Definitely. Apple (AAPL), Uber (UBER), and Airbnb (ABNB) all rode that wave.
Obviously, the breakthrough platform today is artificial intelligence (AI). I am 100% certain AI will produce dozens of 10-baggers, and many stocks that gain much more. It’s just a matter of finding them early, while the upside is lucrative.
Reilly: What else?
Wood: The perfect disruptor has to be attacking a big, broken market in desperate need of innovation.
You can make decent money on the next quality social media or SaaS stock. But those are mature markets where technology has already squeezed out most of the efficiency gains.
Contrast those with healthcare and education, our two most broken industries. If anything, these industries have gone backwards over the last 20 years. The companies that figure out how to disrupt them, using AI, have blue-sky potential to grow 50X or more.
Reilly: You’ve told me a perfect disruptor usually emerges when the old guard has no real incentive to improve.
Wood: That’s right. Think about banking before PayPal Holdings (PYPL)… retail before Amazon… taxis before Uber.
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The incumbents don’t innovate because they don’t have to. Then, someone small shows up with a new technology and a fundamentally different cost structure. And suddenly, the disruption seems obvious in hindsight.
These businesses grew extremely fast in their early days. It goes without saying, but the perfect disruptor must have fast, sustainable revenue growth.
Reilly: What about valuation? Tell us how your GARP Quotient comes into play.
Wood: The concept of GARP—Growth At a Reasonable Price—is simple. Everybody wants growth. Nobody wants to overpay for it.
Readers can watch my new video if they’d like to understand my GARP Quotient in detail. But in short, it’s our proprietary tool for evaluating very fast-growing stocks.
For example, fast-growing stocks are often not profitable. But there’s all the difference between being intentionally unprofitable because you’re plowing all your net revenue back into growth… vs. “not a great business” type of unprofitable.
Amazon’s the example here. It was unprofitable because Jeff Bezos was reinvesting every spare penny into infrastructure and logistics. Same with Tesla (TSLA) in the 2010s.
Reilly: Those stocks worked out pretty well.
So to recap, the “perfect disruptor” is:
Wood: That’s it. Sounds simple, but very few stocks hit all four. Perfection is rare.
Reilly: I have to point out that you’ve just recommended one such stock inside your Disruption_X advisory…
Wood: Yes, it’s disrupting healthcare. It’s growing very fast. It’s virtually unknown, which won’t be the case for long.
And it is one of the first publicly traded stocks built upon AI.
Not be a naysayer, but many companies that claim to be AI companies today are not really AI companies. They just say they are for marketing purposes.
This company is different. It is purposely built on AI, with the intention on disrupting and fixing some of the worst and most costly problems in healthcare.
Reilly: And you and Stephen agree it can grow into a trillion-dollar company… which means it has 75X potential.
Wood: To be clear, I don’t throw around trillion-dollar market cap projections casually. In fact, I’ve never done it before for a stock this small.
But yes, this stock checks every box of a perfect disruptor. And the path to a $1 trillion valuation is credible.
Reilly: Disruption_X members can read your full new report on this disruptor today.
Chris, before we wrap, a lot of readers have asked: “What’s the difference between Disruption Investor and Disruption_X?”
Wood: Disruption Investor, our flagship advisory, focuses on stable, more mature disruptors. It’s where we recommend profitable, larger-growth companies... like Nvidia (NVDA), which we’ve made good money on, Tesla, Taiwan Semiconductor (TSM), and more.
Disruption_X is the frontier portfolio... early stage innovators, lesser-known “dark horse” disruptors, and potential 10-baggers.
“DI” builds the foundation. “DX” is where we hunt for asymmetry.
Reilly: Thanks, Chris. And as a final reminder, reader, if you’re ready to join Disruption_X to get Chris and Stephen’s “dark horse” disruptor with trillion-dollar potential, their full portfolio and research reports, their latest issue and much more, go here now. This special deal ends tonight at midnight, so time is running out to make your decision.