A smart money move, according to most financial advisors is diversification: spreading investment money across multiple companies in multiple sectors. But, a shotgun approach of putting money in utilities, energy, banks, and big blue stocks won’t produce the same desired results as in the past. Finding the right investment vehicles at a great price is the key to success. Here are three companies from different industries that are generating a buzz in their respective fields. Each has the potential to provide investors handsome returns over the long haul.
Plugged In
The first in this three-pack is Plug Power Inc. (PLUG), an alternative energy provider located in Latham, NY, that develops and manufactures fuel cell systems for industrial off-road markets. Founded in 1997, Plug’s specialty is hydrogen fuel cell technology in its flagship product GenKey, which includes its hydrogen and fueling system, GenDrive fuel cell systems, and GenCare aftermarket service. The company is in position to capitalize on the world market’s desire for alternative energy solutions and the move away from dependence on carbon-based fuels.
Plug’s first quarter results revealed that it had received bookings of over $46 million and revenue of $9.4 million, 69 percent higher than 2014’s first quarter. Revenues included $4.1 million in products and $5.3 million in service revenue. The company has cash on hand—roughly $131.5 million in cash and cash equivalents and net working capital of $155.7 million. Plug is on the upswing after getting control of expenses from previous years as well as implementing an aggressive selling strategy. The company recently announced its deal with Walmart Canada to supply 124 GenDrive fuel cells for Walmart Canada’s High Velocity Distribution Center in Alberta.
The company’s stock had jumped 4.5 percent on the Walmart news and is currently trading around $2.70. This is a growth company gaining substantial traction in the alternative energy market.
Virtually Growing
The next on the list is a virtual reality stock that is tapping into multiple markets for greater gain. Next Galaxy Corporation (NXGA) is a leading developer of a wide assortment of consumer virtual reality technologies and applications. This company is striving to follow its mission of, “Harnessing the power of technology to make everyday life fun and easier for people all over the globe.” It is doing this by remaining flexible in its application of products and services. On an innovative binge, it was announced last year that Next Galaxy had created Ceekars, the first integrated virtual reality audio headset specifically designed to work with Oculus Rift providing reactive sound in parallel and immersive video.
With a slight departure from the company’s focus on entertainment, Next Galaxy recently announced that it has signed a multi-year agreement with Miami Children's Hospital to use virtual reality to help educate and train the hospital’s medical staff and others. The terms of the agreement state that the company will develop immersive virtual reality medical instructional content for patients and medical professionals with the initial programs covering CPR and other lifesaving procedures to be released in a smartphone app. This virtual tool provides instantaneous feedback reducing learning time while increasing proficiency using a combination of gestures, eye gaze control, and voice commands guiding the user through the medical emergency scenario.
“Working with a prestigious and well-respected hospital gives us an opportunity to open new avenues of growth while expediting critical learning procedures for medical personnel,” said Next Galaxy Corp. President Mary Spio. “This is a chance for Next Galaxy to show the incredible opportunities that abound in virtual reality, both for our customers and investors.”
Last month, the company revealed that it is working with Richline Group Inc. (a Berkshire Hathaway subsidiary) to create a virtual reality experience for showcasing Richline’s wearable jewelry collection at the JCK Show in Las Vegas. The agreement shows the diversity of the company as it enters another vertical in enterprise promotions. These various branches are in addition to Next Galaxy’s sports, entertainment, and business. For example, last year the company announced that it had joined forces with Syracuse Coach Jim Boeheim to give basketball fans a virtual reality experience. Most recently, the company’s president, Mary Spio, and the University of Kentucky Men’s Basketball coach, John Calipari, were interviewed on Bloomberg Business to discuss how virtual reality can put the user right on the bench next to the coach.
Printing Real Tissue
Organovo (ONVO) is the final suggested winner in our threesome. This company made headlines a couple of years ago when it quadrupled in price and then quickly lost 35% of its value. However, the company, which focuses on bioprinting functional human tissues that can be used in drug discovery development and research is gaining traction. It announced late last year a collaboration with the Yale School of Medicine to develop organs for surgical transplanting and this was prior to Organovo’s launch of exVive 3D Human Liver Tissue, both propelling the company forward in reputation with the medical community as well as investors.
The field of 3D bio-printing is diverse, but Organovo is using 3D printing technology to print human cells to produce three-dimensional, functional tissues. These 3D bio-printing human tissues closely resemble human organs allowing responses to drugs to be monitored and tested. This served the company well when it announced its exVive to investors for the research it provides for understanding how some drugs affect the liver. The company is also in the process of producing kidney tissue as well, material that could be critical in finding solutions for renal disease.
Elsewhere, Organovo is collaborating with L’Oreal USA, the largest subsidiary of the global beauty company, to develop 3-D printed skin tissue for product evaluation and other areas of advanced research. This nascent industry is just getting going, but clearly the list of possible applications is lengthy.
In the first quarter this year, Organovo announced it had total revenue of $268,000, or a 73 percent increase from the previous third quarter. The company also has cash on hand of $50 million. The stock is currently trading just at $5. With a market cap of $410 million and a slew of projects in the R&D pipeline, this is a 3D company poised to make its mark on the medical field and continue for a very long time.
Conclusion
In investing, there will always be, “If only I had,” or “I should have bought back then.” It is easy to second-guess because we don’t have the magic crystal ball that can show the future. However, investments in new energy and future technologies probably get us as close as we can to hitting home runs. This trifecta of Next Galaxy, Organovo, and Plug has great, solid foundations. They have all been through the woods and back out again and are now stretching their legs to create clear, solid growth for a profitable future. These three create the diversification that makes sense.