Navellier Growth: your source for market-beating growth stocks

 

This morning, the government corrected itself! Well, it wasn’t too much of a correction. Last month, the Commerce Department said that the economy grew by 0.6% in the first quarter. Now they’re saying that the economy really grew by 0.9%.

So is 0.9% growth good news? Hardly. That’s barely breaking even. Less than 1% growth is pretty weak, and what’s worse is that it’s not strong enough to provide jobs for folks who are either currently unemployed or are just now venturing into the workforce. Technically, we’re not in a recession – which, by definition, is two straight quarters of shrinking GDP – but we’re pretty darn close.

Sluggish growth combined with soaring commodity prices suggest the economy is reverting to stagflation. It’s like a rerun of the 1970s. In this week’s issue of “What’s Working on Wall Street Now,” I want to show you how to pick stocks in a stagflationary environment. It can be very profitable, but I have to warn you: It’s very different from investing in a normal climate. The difference is that the market becomes very divided—a small number of stocks do very well, but many more don't do much at all.

Activision—A Low-Priced Gem

The key to investing right now is earnings growth. A perfect example of a stock with tremendous earnings growth in this turbulent environment is Activision (ATVI). How is a video game publisher a good stock for a deflationary environment? Simply put, it stands apart from the normal business cycle. Apparently, no one told teenagers that we’re in a 0.9%-growth economy. As the father of a teenager, I can tell you that these budding consumers like to spend, spend, spend and spend some more.

Activision is best-known for games like Tony Hawk’s Underground, Doom, and Call of Duty. What’s interesting to note is that Activision also makes games based on licensed properties from places like LucasArts, DreamWorks and Marvel. This is a shrewd business move because licensed properties pretty much bring with them a built-in fan base, which guarantees sales and acts as a hedge in a risky market environment.

I added Activision to the Blue Chip Growth Buy List in our April issue. Then on May 8, the company reported its fiscal fourth-quarter earnings. My friends, I have to be honest—it was almost funny to watch because Wall Street just doesn’t get the Activision story. The consensus of the analysts was for earnings of just five cents a share. I knew that was way too low. But most analysts thought they were being optimistic since Activision had lost five cents a share in last year’s fourth quarter.

When the report was released, Activsion earned 17 cents for the quarter, which means they exceeded Wall Street’s expectations by a stunning 240%! Everyone, except my Blue Chip Growth subscribers, was caught by surprise. This quickly catalyzed a buying frenzy on Wall Street. The next day, Activision’s stock jumped 14% on ten times the normal trading volume. It was a scene straight out of the movies. Fortunately for Blue Chip Growth readers, I had tipped them off nearly a month beforehand. Best of all, the stock is still rallying, and it’s about to hit another 52-week high. In just two months, we’ve made a 24% gain in Activision.

Blue Chip Growth Is Ideal for New Investors

The other thing I like about Activision is that the shares are still selling under $35. In my Blue Chip Growth service, we’ve made some huge profits in stocks like Apple (AAPL) and Potash (POT), but both of those stocks go for nearly $200 a share. Whether you’re an investing novice or pro, it’s only natural to feel skittish about owning a stock with such a rich price tag.

I certainly understand that sentiment. My Blue Chip Growth service is tailored to investors who are new to the market or may have smaller portfolios. The good news is that Blue Chip Growth is one of the best-performing conservative advisories you’ll find. Our Buy List has beaten the market for eight of the past 10 years. And we’ve done it conservatively, without taking on too much risk. My goal is to help you live well and sleep well.

I’d like to extend a special offer to you to sign up for a one-year subscription to Blue Chip for just $149. This offer is a savings of $150 off our normal prices. I realize you may be a skeptical about joining an investing service, that’s why I’m willing to work with you and make this extraordinary offer: If you sign up today and, for whatever reason, you decide that you don’t like Blue Chip Growth, you can cancel at anytime within the first six months and get a 100% refund. How can I afford to be so confident? Because recommendations like Activision are just the tip of the iceberg.

In fact, I’m willing to tempt you even further by dropping a hint about the next stock that will stun Wall Street. It’s a Swiss company I recently added to my Blue Chip Growth Buy List. The company isn’t well-known to many Americans, but it will be soon. This company’s business is booming thanks to the plunging dollar and surging commodity prices. Last quarter, its earnings doubled. In less than two months, this stock is up over 30% and, just like Activision, the shares are still selling for less than $35.

So what’s the company? Not so fast! I’d love to tell you, but you need to sign up today. Remember, there’s zero risk to you in the first six months. Join today and be part of the service that’s lapped the market three times during the last decade. For every $1 in profit that the market has handed out, we’ve made $3.53. Please join us today.

That’s all for this week. I’ll have the next issue of “What’s Working on Wall Street Now” next Thursday, June 5.

Sincerely,

Louis Navellier

P.S. If you haven’t had the chance, be sure to visit my blog at blog.navelliergrowth.com. It’s free and a great way for me to keep in touch with my subscribers between issues. On Tuesday, I posted an entry on “Why Crude Oil Prices Are Rising.” Check it out.

Other recent e-letter issues:
11.20.08: Automakers Left Empty-Handed
11.13.08: Four Tips for Buying Stocks in Bad Times
11.06.08: The Bull Market for Fundamentals
10.30.08: Why You Should Be Buying Right Now
10.23.08: How to Invest in a Volatile Market