Ten-Baggers of Tomorrow: The Official Portfolio Guide

Extreme moneymaking often requires investing in a particular type of stock: those with the potential to rise tenfold or more, known as “ten-baggers.”

My research team and I have pored over the ten-baggers of the last few decades to learn everything we could about them.

You might imagine that a stock rising tenfold, or 1,000%, is a rarity. In truth, though, it’s far more common than most investors realize.

You might also be surprised to learn that many of the best-performing stocks are companies you’ve been patronizing for years.

Ever use Mastercard (NYSE: MA), for example? The stock is up more than 1,700% since January 2008…

Monster Beverage (Nasdaq: MNST), meanwhile, is up more than 1,200% over the same time span. And Apple (Nasdaq: AAPL) is up about 2,400%.

With that said, these companies can’t continue to grow at these rates in the near future. They’re too big for that now.

However, there are plenty of other companies on the verge of doing the same exact thing.

Some of these businesses are virtually unknown to the majority of investors. Yet they’re delivering blockbuster returns… and are just waiting to be discovered.

That got me thinking…

Maybe it’s time to introduce you to a portfolio that’s part of The Oxford Communiqué: one that invests in potential blockbusters with shares that are far more volatile than the overall market. That would require a different type of analysis… and a different sell strategy too.

My research team and I are convinced that we have a viable strategy for successfully and consistently identifying ten-baggers.

As a result, we created a portfolio dedicated to more speculative companies with the potential to rise tenfold or more.

Please understand that no changes were made to how we run or select stocks for our award-winning Oxford Trading Portfolio, Oxford All-Star Portfolio and Gone Fishin’ Portfolio.

But this one is different. Our Ten-Baggers of Tomorrow Portfolio picks can earn significantly greater-than-average returns, helping you turn $10,000 into as much as $1 million. For example, if you were to invest $10,000 in a stock and it rose tenfold, you would have $100,000. If you were to sell the first stock and reinvest the proceeds in another stock that also rose tenfold, your $100,000 would be worth $1 million.

Seven Traits Ten-Baggers Share

Peter Lynch, who managed the Fidelity Magellan Fund from 1977 to 1990, is the greatest mutual fund manager of all time.

During his tenure, the fund’s assets grew from $18 million to more than $19 billion. This was partly because he earned a 29.2% compound annual return, a record that remains unmatched in the mutual fund industry. In addition, shareholders rewarded this performance by plowing additional money into the fund.

What was Lynch’s great secret? He was a master at identifying successful growth stocks or, more particularly, hypergrowth stocks.

In his book One Up on Wall Street: How to Use What You Already Know to Make Money in the Market – which remains an investment classic – Lynch coined the term “ten-bagger.” And he invested in many such stocks during his time managing the Fidelity Magellan Fund.

And here’s the important thing…

Although these were different companies in different industries run by entirely different people, most had several characteristics in common both before and during their dramatic runs higher.

We’ve isolated these characteristics and turned them into seven investment criteria – a checklist, if you will – to guide us toward the ten-baggers of tomorrow.

Here are characteristics we found that these companies typically have in common:

1. They are tremendous innovators. Companies that rise tenfold or more offer revolutionary technologies, new medical devices, blockbuster drugs, and other state-of-the-art products and services. Over the last 10 years, for instance, investors have been stunned by the moves made by Tesla (Nasdaq: TSLA) with its electric cars, Apple with its cutting-edge electronics, and Amazon (Nasdaq: AMZN) with its breakthrough e-commerce platform and one-click ordering system.
2. They experience terrific sales growth. Notice I said sales growth, not profit growth. A lot of the best-performing companies weren’t profitable in the early stages of their run-ups. But even if they were losing money, they usually experienced top-line growth of 20% or more.
3. They protect their margins. Huge sales numbers attract competition the way honey attracts bears. That means a firm has to be able to protect its innovation with patents, brand names and trademarks. Otherwise, competitors will flock to the industry, grab market share and force down margins.
4. They beat consensus estimates. Some investors think earnings alone propel stocks higher. This is largely true over the very long term. But in the near term, it’s all about beating expectations. Even if a company loses money, if the loss is smaller than expected, it can register as a significant beat. That means the shares are likely to push higher.
5. They are small cap to midcap companies. It shouldn’t surprise you to learn that most of the best-performing stocks of the last few decades started out as small companies. A study by Chicago research firm Ibbotson Associates revealed that every $1 invested in a basket of large cap stocks from 1926 to 2016 – with dividends reinvested – would have grown to more than $5,200. That’s nice and all, but every $1 invested in a basket of small caps would have grown to more than $25,100 over the same period. Huge companies simply can’t grow at the breakneck pace that smaller companies do.
6. They’re relatively unknown. The fewer people who understand what a company is doing – and the less media attention and Wall Street coverage it gets – the better the chance that shares are incorrectly priced. Hot stocks with splashy stories haven’t been the best performers historically. By the time a company becomes widely known, much of its parabolic move upward may well be over.
7. They have significant insider ownership. Sure, officers and directors have access to all sorts of material, nonpublic information. That gives them insights into the company’s near-term prospects. But if they don’t own the stock themselves, don’t believe them. You should insist on managers who “eat their own cooking.” History shows that when top management owns shares, other shareholders are treated well too.

Not every company that makes it into our Ten-Baggers of Tomorrow Portfolio will meet every single criterion on our checklist. But some will meet all of them, and all will meet most of them. Before I give you the companies that are currently in the portfolio, let me cover one additional point.

A Different Exit Strategy

Our ten-bagger picks are qualitatively different from the companies we generally recommend. They tend to be smaller, sometimes unprofitable and almost always more volatile. This requires us to use a different sell discipline.

Pushing sales higher requires taking bigger risks.

That means greater volatility – the kind that can easily stop you out of a position.

So we do not use our customary 25% trailing stop with the positions in the Ten-Baggers of Tomorrow Portfolio.

Instead, a sell recommendation will be triggered if a company misses a quarterly consensus sales estimate by 25% or more – or if I believe the company’s business prospects have changed for the worse in some fundamental way.

In either case, we’ll issue what we call a Safety Switch Alert.

Understand that these stocks are meant to be held longer term and will bounce around more than most. As a result, our exit policy will be based not on share price fluctuations, but on how each company’s sales compare with expectations.

Here’s a summary of some of the recommendations currently in the portfolio. I’ll be providing you with additional recommendations in the months ahead.

Our Ten-Baggers of Tomorrow Portfolio

Seeing Green: Huge Profits Ahead 

Based in San Clemente, California, Glaukos (NYSE: GKOS) is a medical technology company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases. 

Glaucoma – which can develop in one or both eyes – is actually a group of diseases that damage the eye’s optic nerve, causing vision loss or blindness. 

The diseases create pressure inside the eye. And their creeping, symptomless nature means eyesight is often slowly but irreparably stolen. 

Without treatment, people with glaucoma first lose their peripheral vision. Over time, central (straight-ahead) vision also decreases. In the worst cases, those afflicted lose their eyesight altogether. 

There is no cure for glaucoma. 

However, the disease can be detected through a visual field test and a dilated eye exam. And, with the proper steps, further vision loss can be avoided. 

Patients generally begin treatment with eye drops. But many eventually opt for cataract surgery. 

That’s where Glaukos comes in. Its groundbreaking product is the iStent, a tiny L-shaped titanium implant that has helped thousands of people with glaucoma successfully manage intraocular pressure. 

The device received regulatory approval from the FDA in 2012. And Glaukos has released new iterations over the past decade. 

Glaucoma currently impacts 3 million Americans. Yet traditional surgery is invasive and can have serious side effects, including bleeding and retinal detachment. 

The iStent, however, has an excellent safety profile. 

It enables most patients to once again maintain normal eye pressure after the procedure. 

Before the pandemic, cataract procedures were performed on 4 million eyes annually in the U.S. Nearly half of these were related to glaucoma. 

Over the past few years, however, many medical procedures were postponed as prospective patients were afraid of contracting COVID-19. 

Thousands of healthcare facilities stopped performing elective surgeries, including those for glaucoma. That caused a rare, but temporary, drop in Glaukos’ sales. 

But with the pandemic now a fading memory and the U.S. healthcare system back in full swing, things are looking good for Glaukos. 

The company has the most comprehensive pipeline in ophthalmology. It has five distinct platforms generating innovations across three franchises focused on glaucoma, retina and cornea conditions. Since 2018, the company has invested more than $400 million into research and development. As a result, the number of products in development has grown from four in 2015 to 14 today. The firm has built a wide-ranging, proprietary portfolio of microscale surgical and pharmaceutical therapies and is expanding rapidly into international markets. 

And the company’s next product, iDose, signals a new stage in the company’s quest to treat glaucoma. iDose, which is implanted into the eye to relieve pressure, is designed to provide 24/7 contonuous long-term therapy for glaucoma patients without the need for medication use.  

The company predicts the annual market opportunity for iDose is 1 million+, well over the 700,000 per-year opportunity for its iStent treatment. That should add to the company’s already strong balance sheet… 

Glaukos holds a positive cash position with nearly $262 million in its war chest. It’s a rare company with a positive debt/equity ratio in this overleveraged market. Revenue in the latest reported quarter (the third quarter of 2024) grew 23.9% over revenue in the third quarter of 2023, and its gross margin is 76.6%.  

In short, the Fed may eventually push the U.S. economy into a recession. But that won’t affect the business prospects for Glaukos one iota. 

We’re sitting on a 310% gain in this stock as of this writing. But plenty of upside remains. 

Action to Take: Buy Glaukos (NYSE: GKOS) at market. You’ll receive a Safety Switch Alert when it’s time to sell. 

Your Health Is Your Wealth

Based in Chanhassen, Minnesota, Life Time Group Holdings (NYSE: LTH) offers health, fitness and wellness experiences to a community of individual members. 

To that end, it designs, builds and operates sports and athletic, fitness, and recreation centers that feature a resort-like environment. 

It currently operates 175 centers in the U.S. and Canada. 

These centers are located principally in urban and suburban locations around metropolitan areas. They offer fitness studios, indoor and outdoor pools, tennis and pickleball courts, gymnasiums, and locker rooms… as well as spas, cafés and bistros. 

The company also provides livestreaming fitness classes; remote, goal-based personal training; nutrition and weight-loss support; and curated health, fitness and wellness content. 

Life Time is not just another gym or health club. 

The centers are a place to relax, meet people and dine in a resort-like atmosphere. 

There are healthy food options at the cafés and bistros. There are safe places for children to play. And the centers provide an opportunity to meet like-minded people who are interested in health, wellness… and socializing. 

Life Time blends the best aspects of a fitness center, a resort and a country club. 

Of course, no matter how great the story, every Oxford Club investment opportunity boils down to the numbers. And they are exceptional here. 

In the third quarter of 2024, revenue at Life Time increased 18.7% to $674.8 million. But this hardly begins to tell the story. Net new memberships increased by 5.4% in the third quarter of 2024 over the same quarter a year ago. Total memberships increased to 826,502. 

Net new memberships increased by 7.6% in the third quarter of 2023 over the same quarter a year ago. 

Total memberships increased to 784,331. 

There are good reasons to be optimistic about the company’s future. 

This is a young company with an exciting business model and the potential to grow severalfold in the years ahead. 

And it’s a fine play on the health and wellness trend that shows no signs of slowing down. 

Action to Take: Buy Life Time Group Holdings (NYSE: LTH) at market. If at some point there is a change in the company’s business prospects, we will issue a Safety Switch Alert. 

The One Company Perfectly Positioned to Ride the 5G Revolution

Marvell Technology Inc. (Nasdaq: MRVL) designs and manufactures a wide variety of semiconductor products that are at the core of 5G-capable networks. 

No previous generation of mobile technology had the potential to drive economic growth the way 5G already has done and will continue to do. 

It will fully realize the Internet of Things, a clunky name for all the web-enabled devices that collect, send and act on data using embedded sensors, processors and communication hardware. 

These connected devices will talk to each other – in a process called machine-to-machine communication – and act on the information they get from one another. 

In the not-too-distant future, your autonomous car will drive you to work on the least congested route, freeing you to have a videoconference with the office or direct a drone to deliver the tennis uniform your daughter forgot to take to school. 

Not long ago, this sounded like science fiction. But 5G will make it all possible – and much, much more. 

That’s because 5G offers blistering data rates up to 100 times faster than those of current 4G technology. 

Marvell builds products that allow businesses and consumers to take advantage of these network capabilities. 

The stock is up 276% from our original entry price. And the fundamentals here are as strong as ever. 

Marvell designs and manufactures a wide variety of integrated circuits that are at the core of 5G-capable networks. 

The firm’s products are state-of-the-art and in high demand. Offering blistering data rates up to 100 times faster than 4G technology, the products allow businesses and consumers to take advantage of new 5G capabilities, as well as future ones as they become available. 

Several years ago, most of the firm’s business came from consumer electronics manufacturers. 

But today the majority comes from data centers, industrial and automotive manufacturers, and mobile networks. 

Marvell’s products are proprietary and largely made in-house. It has as a world-class management team with deep technical expertise, vast industry experience and a proven track record. Its profit margins are protected by more than 10,000 global patents. 

The company is one of the world’s fastest-growing chipmakers and is set to transform the cloud, industrial and consumer markets for years to come. 

That makes Marvell Technology especially attractive at current levels. 

Action to Take: Buy Marvell Technology Inc. (Nasdaq: MRVL) at market. You’ll receive a Safety Switch Alert when it’s time to sell. 

A Unique Problem in Search of a Unique Solution 

As it stands, drug development is incredibly time-consuming and expensive. 

Across the top 20 global biopharma companies, the average cost to develop a new drug is $2.3 billion. But it can go all the way up to $12 billion. It normally takes 10 to 12 years for a new drug to get to market. Though, it can take as long as 16 years. 

Granted, that’s if it even sees the light of day at all. One study found a full 90% of new drugs fail in trials. Another found that, on average, of every 5,000 compounds that enter preclinical testing, only 250 make it to clinical trials. Of those, 10 make it to human trials. And of those 10, only one makes it to market. That’s one successful drug for every 4,999 failures. 

Modern drug development is an extremely inefficient, frustrating and expensive exercise in trial and error. But Recursion Pharmaceuticals (Nasdaq: RXRX), represents a novel way to solve one of the biggest problems faced by modern biotech companies: drug development. 

The scientists working for these companies spend countless hours testing thousands of molecules, hoping that one will show promise. But only a tiny fraction of possible drug candidates can actually be tested. All the other potential molecules have to be ditched. 

These companies are wasting years and billions of dollars to maybe find a drug that can both help people and make a profit (after recouping the money spent on development, of course). 

What Recursion Pharmaceuticals is doing is using the power of AI to rapidly calculate vast quantities of data and produce usable information to develop new drugs faster and with a higher hit rate. 

With AI, scientists don’t have to waste time or money testing drug candidates that won’t amount to anything. They can analyze vast quantities of human datasets and potential molecules and proteins, eliminating much of the trial and error of drug discovery by focusing only on what Recursion’s AI has identified as potentially useful. 

AI can conceivably cut the time between concept and product for new drugs in half. A drug that would have taken 12 years to develop without AI will take only six with AI assistance. And AI can save companies hundreds of millions of dollars that could be better spent developing more new drugs. 

Costs could be reduced by 25% to 50% leading up to the preclinical trial stage of development for new drug candidates. But a recent Carnegie Mellon study suggests AI could ultimately cut costs by as much as 70%. That means drugs across the board will become much more affordable. 

Because of AI, we can uncover better treatments both faster and for a fraction of the cost. It has the potential to be life-changing and even lifesaving for millions of people the world over. Here’s how… 

It may surprise you to learn that our bodies use a similar code to a computer’s. But instead of ones and zeroes, ours is composed of four proteins that repeat trillions of times in different combinations in DNA, the base code of the human operating system, so to speak. 

Those four proteins, cytosine (C), guanine (G), adenine (A) and thymine (T), and the patterns in which they bind to one another determine pretty much everything about you. Your hair and eye color, height, nose shape, and susceptibility to certain diseases are all determined by those four letters. 

And as it turns out, AI programs are very good at reading that code and figuring out what molecules could be used to repair damaged code segments or cure diseases. 

At present, BioHive-2, a collaborative project with tech giant Nvidia, has a colossal dataset of 50 petabytes, which includes everything from human and rodent cells to model organisms and even human patient data. Now, to put that in perspective, 1 petabyte is equal to 1,000 terabytes, or 1 million gigabytes. 

For context, a high-end personal computer might have a 1-terabyte hard drive. Biohive-2 stores a mindbogglingly large amount of information that BioHive-2 has used to map more than 6 trillion gene and drug compound relationships. 

It uses that data to run 2.2 million experiments per week, profiling new gene and drug compound combinations. That’s what conventional drug development looks like, but sped up exponentially and with much greater accuracy. 

This technology-first methodology means dramatically cheaper drug candidates delivered in a fraction of the time conventional methods would allow for. 

And Recursion has been seeing a wave of partnerships and investments from tech giants like Nvidia along with pharma companies like Sanofi, Merck, and Bristol Myers Squibb. The company’s bottom line matches the caliber of its partners.  

For Q3 2024, the most recently reported quarter, the company took home revenue of $26.1 million, up a staggering 147.6% yearoveryear. Revenue growth has been on a tear for the last three years, achieving a CAGR of 84.8%.  

With growth like that and a banner list of partners and investors, we expect Recursion willmove higher quickly. 

Action to Take: Buy Recursion Pharmaceuticals, Inc. (Nasdaq: RXRX) at market. You’ll receive a Safety Switch Alert when it’s time to sell. 

Some of our Members are just getting started, and other Members are multimillionaires. But no matter what investment level you find yourself at, the key is to take control of your finances and secure your financial future. The Ten-Baggers of Tomorrow Portfolio can help you start down that road – today.