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Let’s Add Some Glamour to Our Portfolio
For decades, Warren Buffett has offered investors a simple piece of advice…
Buy what you know.
If you don’t understand a company… or what it’s selling… don’t invest in it.
It’s sound advice.
Or it was, anyway… until semiconductor stocks started soaring… AI stocks started crushing records… and electric cars started minting billionaires.
In this fast-changing, tech-driven world of ours… it gets more and more difficult by the week to stick to Buffett’s most famous principle.
Gone are the days when we could simply throw our hands up and buy more stock in soda pop companies. That’s no way to get rich in a tech-driven market.
We need to be willing to expand our horizons.
Now… that doesn’t mean we should be recklessly throwing our money at whatever the latest headline-grabbing tech is.
Heavens no.
But to take advantage of the latest developments in booming markets like AI, blockchain technology and predictive healthcare (to name just a few), we must be willing to spend hours – days even – scouring the latest research on these innovations.
Our latest recommendation is a result of us doing just that. (We think you’ll be very glad we did.)
It takes us out of our comfort zone… and into a stock that Time calls one of the most influential companies of 2023.
The distinction is well-earned.
Since launching in 2018, Oddity Tech (ODD) has been carving out a corner for itself in the smart beauty market.
What is “smart beauty,” you ask?
Put simply… Oddity markets and sells beauty products online with the help of AI. It provides customized recommendations to its customers through a proprietary app.
The technology behind the app is quite impressive. It analyzes skin and hair features, using 31 wavelengths of light to detect things like facial blood flows and melanin levels. Along with their unique results, customers are shown which of Oddity’s hair care and skin care products are ideal for them.
These days, the company practically owns the space.
You can see why Time describes Oddity as “a tech firm masquerading as a beauty retailer.”
At first blush, this might all seem quite foreign to a fella whose “beauty” regimen goes about as far as using whatever bar of soap he finds in the shower. But numbers don’t lie.
Oddity’s powerful consumer-focused platform has attracted more than 40 million users. And it’s made Oddity the bestselling digital beauty brand in history. Overall sales have doubled every year since the company launched.
In the second quarter, Oddity brought in revenue of $151.3 million – up 55% year over year. It’s now upped its full-year forecast.
CFO Lindsay Drucker Mann said, “We now expect full-year net revenue to increase between 46% and 48%, compared with our prior expectation of a 40% increase.”
Free cash flow is also on the rise, up more than 400% year over year.
This is exactly the type of activity we want to see from a freshly IPO’d stock. The company made its Nasdaq debut on July 19, and it’s already dazzling investors.
It’s also working on incorporating tech from its recent acquisition of Revela, a Boston-based AI startup, which will allow Oddity to speed up research and development for new products and offer customers an even more tailored experience.
In other words, the company is preparing to deliver even more of what its users already know and love.
Now it’s time for us to beautify our portfolio with this potential-packed AI play.
We may not be experts in “smart beauty,” but we know what a solid, disruptive business looks like. This company is going places.
Action to Take: Buy shares of Oddity Tech (Nasdaq: ODD) at the market’s price. We will use our standard 25% trailing stop on the play. Since the stock is new to Wall Street, it doesn’t have a liquid options market quite yet. Option investors will have to sit this one out.