- Taking advantage of fundamental shifts in media spend
- A fresh look at popular convenience services
Our stocks this week both operate in market segments with which many investors may be unfamiliar, but while they may not be mainstream , both still have the potential to deliver double-digit total returns - even after each stock has already risen sharply.
System1 Group (SYS1) – global ad spending is greater than $1tn per annum and is forecast to continue growing at twice the rate of global gross domestic product (GDP). Yet experts claim that 51 per cent of ads fail to boost market share and that 95 per cent of new product launches fail. The profile of ad spending is structurally changing (less print, more social media influencers) and businesses and brands want to be confident they’ll get a bang for their ad spend buck. SYS1 offers a tool kit that translates human emotional responses to adverts and a proprietary algorithm to predict campaigns’ chance of success. This is just what advertisers and brand managers need in today’s marketplace. System1 couples a business model that’s gaining credibility (shown by an impressive rate of new client wins) with high operational gearing to drive high earnings per share (EPS) growth that collides with an overly-cautious valuation rating. Combined, these factors should be able to drive percentage total returns in the high teens over the next two to three years.
