Under the Radar - November 5th, 2024

If all goes right, you will receive this email on election day.

Those under a certain age may find it hard to believe, but there was a time in the United States when you could get some popcorn, pour a nice glass of Cab, or mix up a nice old-fashioned on election day, sit back, and watch the results come in on the TV.

By the time the 11:00 news came on, you were pretty sure who had won and could go to bed with no lingering questions about the political future to keep you awake.

We do not live in that time.

Election day itself will be noisy with wall-to-wall TV coverage and some serious manic-depression level activity occurring at high decibel levels on the internet.

It probably will not get better as the week goes on.

If you live in a swing state, you might find it best to stay inside, snuggle with the dogs, and listen to some Vivaldi or Al Jarreau rather than venture out into the madness of turning on anything connected to the outside world.

The noise from the online world will be even worse, especially from the internet’s instant investing experts.

These experts will relinquish their semiconductor design and production degrees to buff up their political science and economics degrees to tell you what the election means and what you should do with your money in response to the vote count.

This advice will change as the vote count fluctuates throughout the day.

The odds of making your financial dreams a reality are inversely correlated with your ability to ignore the instant experts of the internet.

All this carefully generated excitement is not good for your financial health.

Investing, at its best, is boring.

Whatever you think of his politics, you must admit that George Soros was one of the best investors and traders of all time. He once said, “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”

Noted economist Paul Samuelson once remarked, “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

I agree with both, and I am far from the only one who does.

Without a doubt, Peter Lynch is the greatest mutual fund manager who ever lived. During his tenure at the Fidelity Magellan Fund, he delivered a compounded annual return of 29% a year for his shareholders before he did a Barry Sanders and retired at the top of his fame after 12 years.

In his book “One Up on Wall Street,” Lynch described the perfect growth stocks.

It would be a dull company in an undesirable business with a funny name.

It would be a company that did some messy job that was necessary and that people used all the time, but it was a business people never aspired to operate.

It is a huge plus that the company has a strange name that has no apparent meaning.

The best stocks are attracting very little attention from Wall Street. They do not hate the company; Wall Street just does not care about it at all.

It is not sexy or exciting, and there are no massive investment banking fees to earn.

Few analysts follow the company, and institutions do not own much stock.

Insiders own a lot, but it’s even better if they have been buying more recently.

I have a screen set up that spits out a list of companies that fit most of the criteria every month.

This month, it spits out a name that describes a perfect under-the-radar growth stock almost to a T.

Arq Inc. ARQ

Source: Benzinga Pro

Arq Inc. has a name that does not appear to have much meaning.

It just changed recently when the company decided to rebrand itself.

That is not an awful idea, as the former name was the decidedly unappealing Advanced Emissions Solutions.

The company makes activated carbon products that remove harmful chemicals and pollutants from water, land, and air.

For years, the major product line has been activated carbon, which is used to help clean up emissions from coal-fired power plants. The company has been changing its strategy to include carbon for removing poly-fluoroalkyl substances from water.

Polyfluoroalkyl substances are nasty little chemicals that do not break down over time. They have been showing up in the bloodstream and in most of the global food chain, including the very top.

The press usually refers to them as “forever chemicals.”

Granular activated carbon is the best way to filter out these toxic substances, and Arq is positioning itself as a significant supplier in the global purification markets.

Wall Street still views the company as a coal-related business and does not pay attention to the water business’s growth potential.

The EPA regulation surrounding forever chemicals and drinking water pretty much locks in a massive growth opportunity for Arq.

No mainstream analysts are writing about this stock.

Institutions own a tiny amount of stock.

Insiders own a lot—more than 26% to be precise.

The CEO just spent six figures of his own money to buy more around the current price.

Company executives have millions of dollars of stock incentives that do not kick in until the stock doubles or triples from current levels.

For them to all make enormous amounts of money from the stock, they must do everything that allows us to make enormous amounts of money as well.

When this stock does pop up on Wall Street’s radar screen as a clean energy and clean water stock, the resulting buying pressure could send the shares to several multiples of the current quote.