Wall Street Forgot This Stock for 30 Years – Then It Soared 7,476%
By 1988, I'd spent more than two decades on Wall Street. The hottest technology in any office that year was the fax machine. Businesses still ran mostly on paper.
Wall Street Forgot This Stock for 30 Years – Then It Soared 7,476%
By Marc Chaikin, founder, Chaikin Analytics
By 1988, I'd spent more than two decades on Wall Street.
The hottest technology in any office that year was the fax machine. Businesses still ran mostly on paper.
That year, a company called Innodata (INOD) started in New York City.
Its business was about as unglamorous as it gets. It took printed pages, such as publishers' archives and legal documents, and turned them into digital files a computer could read. Then, it tagged and organized all that content so its customers could find what they needed.
It was useful work. But it wasn't the kind of story that gets investors excited.
Innodata went public in 1993. And Wall Street practically forgot it existed...
For the next 30 years, its stock traded mostly flat at a single-digit price.
Then, the AI revolution arrived...
Innodata had spent decades taking messy information and organizing it so a computer could understand it. And as it turned out, this skill was exactly what AI systems needed.
Today, Innodata prepares and labels the data AI systems learn from.
On January 3, 2020, two different stock-picking systems flagged Innodata as a "buy" on the same day.
Remember, this was nearly three years before AI platform ChatGPT launched.
From there, Innodata soared as high as 7,476% through earlier this year. Take a look...
Innodata wasn't a fluke. As I'll show you today, when these two systems agree, they have a knack for finding huge opportunities at the exact moment everyone else is telling you to run away.
This combination has led to one of the biggest changes to my strategy in 60 years... and potentially the most profitable.
I'll get to that in a moment, plus some of the outsized gains it flagged in testing. First, a little background...
Hedge Funds Have Paid $750,000 a Year for This Research
My Power Gauge looks at more than 20 factors behind a stock.
These factors include a company's finances, its earnings, and whether – on balance – big institutional money is flowing in or out. Then, the system boils all that down to a single rating. It turns green when the overall picture looks strong. And it goes red when the picture looks weak.
The Swans look at something different from my Power Gauge...
Since 2012, they've tracked what millions of Americans post online about what they're buying or thinking of buying – the restaurants they visit, the products they love, and the ones they hate.
When a product starts catching on, the Swans see it in their data long before it shows up in a company's earnings. Some of America's top hedge funds have paid up to $750,000 a year for access to it.
The Power Gauge is the buoy near the shore. It reads how big a wave is as it gets close. And its red, yellow, and green ratings tell you whether it's a good time to get in on it.
The Swans' online consumer-sentiment data is the sensor on the ocean floor. It picks up that wave at the source... the moment people start buying.
When the sensor and the buoy agree, we say the two systems are aligned. And when we went back and tested what happened after those moments, the results surprised even me.
You wouldn't think 24 hours would make or break big gains... but in our historical study of market cycles and sentiment, buying just ONE stock ONE DAY earlier could've added 500 percentage points to your gains. And we've found more than 100 examples of a similar phenomenon. Watch what we've discovered.
In 2020, Wall Street analysts warned investors to stay away from mall stores.
JC Penney, Neiman Marcus, and Lord & Taylor had all filed for bankruptcy. Coresight Research predicted 25% of malls would close within five years.
As far as Wall Street was concerned, Build-A-Bear was a children's toy brand parked in buildings everyone expected to go dark.
But the Swans' consumer-sentiment data was picking up a shift. More of the people buying the bears were teens... and even adults. Today, about 40% of the company's sales come from these older buyers.
In November 2020, our two systems aligned on the stock. From there, it soared as high as 2,429% within five years...
Or take quantum-computing company Rigetti Computing (RGTI).
In early 2023, it was a Wall Street punchline. Its stock had fallen more than 90% since going public. It faced delisting, and its CEO had stepped down.
The Financial Times was writing about a "quantum computing bubble."
On March 9, 2023, during what looked like the darkest possible moment for the company if you were following the news headlines, our systems aligned on Rigetti. Over the next two and a half years, it rose as much as 8,076%.
These aren't the only examples. We found 432 cases where the two systems aligned. In 260 of them, or 6 out of every 10, the stock went on to double or more at its peak.
These are some of the best examples from our back test. And of course, no system wins every time.
But I've been testing stock-picking systems for 60 years... and I know a breakthrough when I see one.
For six decades, I told my readers to "ignore the noise" – the headlines, the chatter, and the opinions. But recently, the Swans showed me that some of what I thought was noise is among the most valuable data on the market... if you know how to measure it.
Innodata, Build-A-Bear, and Rigetti had one thing in common. When our systems flagged them, the crowd was either ignoring them or running the other way.
Our systems caught them at the earliest possible stage.
That's why Andy, Landon, and I went on camera together for our Stock Tsunami Event last week.
The replay of our urgent broadcast is still online... but not for much longer.
And if you want to know where the next big wave of spending will hit, I urge you to watch it today.
We'll show you what our two systems are flagging right now... why you'll want to access this research immediately... and three free stock ideas as a thank-you for joining us: two urgent buys and one even-more-urgent sell.
I've changed my approach before when new data appeared. I'm doing it again. And I don't want you to miss it.
You don't want to miss this message. It goes offline at midnight tonight... Just click here to watch.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.43%
9
18
3
S&P 500
-0.48%
118
324
58
NASDAQ
-1.36%
27
57
14
Small Caps
-0.07%
419
1061
411
Bonds
-0.13%
Consumer Discretionary
+3.58%
3
26
6
— According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish... Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Materials
+4.46%
Discretionary
+3.41%
Staples
+3.26%
Health Care
+2.97%
Financial
+2.75%
Utilities
+2.63%
Real Estate
+1.96%
Industrials
+1.65%
Energy
-3.43%
Communication
-3.46%
Information Technology
-6.49%
* * * *
Industry Focus
Capital Markets
8
43
13
Over the past 6 months, the Capital Markets subsector (KCE) has underperformed the S&P 500 by 0.45%. Its Power Bar ratio which measures future potential is Weak, with more Bearish than Bullish stocks. It is currently ranked #15 of 21 subsectors and has moved up 3 slots over the past week.
Indicative Stocks
CG
The Carlyle Group Inc.
HOOD
Robinhood Markets, Inc.
SBET
Sharplink, Inc.
* * * *
Top Movers
Gainers
IDXX
+21.85%
TAP
+7.75%
HWM
+6.91%
PNR
+6.49%
CRH
+6.36%
Losers
LITE
-18.59%
MRVL
-12.72%
CIEN
-11.34%
P
-10.40%
INTC
-8.80%
* * * *
Earnings report
Earnings Surprises
AKR Acadia Realty Trust
Q3
$-0.02
Missed by $-0.08
AXSM Axsome Therapeutics, Inc.
Q3
$-0.25
Beat by $0.39
CIFR Cipher Digital Inc.
Q3
$-0.08
Beat by $0.08
EL The Estée Lauder Companies Inc.
Q1
$0.72
Beat by $0.21
FOXA Fox Corporation
Q1
$2.54
Beat by $0.52
* * * *
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