Andrés is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Forget about Europe, the economic cycle or the many risks facing financial markets in the middle term. There are many companies developing successful life changing technologies, and investors who stick with the right businesses will be rewarded in the long term, regardless of market conditions. It just takes research, patience and the discipline to buy outstanding companies with superior growth potential applying a long term strategy.
It´s not necessary to venture into small sized, little known, tech names in order to find innovative companies which are changing our life. In fact, the biggest company in the world, Apple(NASDAQ: AAPL), is a clear example about the fact that size doesn´t necessarily always put a limit to growth and innovation.
This giant with a market capitalization around $540 billion has managed to increase its revenues by an extraordinary 41% annually over the last five years, while earnings per share grew even faster, at 65% annually during the same period. Those unbelievable figures where produced by inventing revolutionary products like iPhone and iPads, so Apple has shown a disruptive potential.
Apple doesn´t need to repeat its past performance to be a high growth company, iPhones and iPads are selling like crazy, and there is no sign of slowing demand for those products, even sales of Macs have been strong lately. All these products bring more sales of apps, music and all kind of digital content, and that´s an industry which is still in its first stages.
Apple is working on a product to revolutionize the TV business. It doesn´t sound like an easy task, of course, but iPhone and iPad didn´t look like a piece of cake in their time either. Apple is extremely big and well known, that´s no reason to believe it’s not a revolutionary company anymore.
Another example of a big company with revolutionary potential could be Google(NASDAQ: GOOG). The online search giant has a leadership position in online advertising, and it’s no secret at all that people around the globe are spending each day a bigger proportion of their time online. Search is a great business to sell advertising, but other businesses like YouTube could provide the fuel for growth in the following years, people are uploading 48 hours of content per minute into YouTube, and that´s an enormous platform with extraordinary long term potential.
Services like Search, YouTube, Gmail, Maps and Google Earth are changing our everyday life in a permanent way; and Google has other ideas which could show further revolutionary potential. The company has developed the technology for a self-driving car which works outstandingly well according to what Google showed to the public, and the company is also working on augmented reality glasses which look extremely exciting on the demonstrations.
Maybe Google can deliver another ground breaking product from its arsenal of crazy ideas, or perhaps they all die as fascinating toys with no economic impact. But Google has clearly demonstrated it can be revolutionary, and it has some brilliant minds working on these new projects, so investors should probably give some credit to Larry Page and his team.
Those willing to go into much smaller and riskier companies in high growth business areas may want to take a look at 3D Systems(NYSE: DDD). This is a play on the exciting business of 3D printing, which could easily be a big disruptive force over the following years.
3D printing is the process of making three dimensional solid objects from digital files: auto parts, jewelry, toys and medical implants are currently being fabricated using this technology. The technology has been around for decades, and it works really well, it´s used in very demanding industries like aircraft and medicine. Perhaps more important, it´s becoming much cheaper.
3D printers can be bought for less than $1300 from 3D systems, which is betting strongly on the popularization of 3D technologies. Not only on the actual 3D printers the company has a big market position, but also in supplies, design technologies and other related aspects of the business. This is small company and a risky proposition, but it certainly doesn’t lack the potential for disruptive technologies and enormous shareholder´s gains.
Markets will always fluctuate in the middle term, sometimes more than we would like. But some companies are developing exciting life changing technologies in the meantime, and investors in those businesses will get juicy rewards in the long term. It wouldn’t be smart to miss these fantastic opportunities because of fear about short term volatility.