“You can’t teach an old dog new tricks,” as the old saying goes. But can companies that have never embraced technology become the “tech stocks” of the 21st century?
Let’s find out …
New Technology for This Old Dog
Domino’s Pizza (NYSE:DPZ) started in 1963 when Tom Monaghan and his brother took over a restaurant in Ypsilanti, Michigan. They used an old Volkswagen Beetle to deliver pizzas. Fifteen years later, Domino’s had over 200 stores.
By the mid- to late 2000s, times had changed. Domino’s appeared down for the count. Sales were tanking, and its image in the eyes of the public was about as bad as it could be. The stock hit a low of $2.83 in November 2008.
Let’s fast forward 10 years. Domino’s is the world leader in pizza delivery. It operates 15,900 stores in more than 85 countries. It delivers over 2 million pizzas a day all around the world. And in August 2018, its stock hit an all-time high above $300.
If you had invested $5,000 into Domino’s stock in the 1990s, your investment would now be worth more than $43 million!
How was such a feat accomplished? Well… this dog certainly learned some new tricks.
For starters, the company had to work on its products. It admitted that its pizza was less than stellar and addressed those issues. Personally, it’s not my favorite pizza, but there’s no denying it’s better than it used to be.
Then, it turned to something most people wouldn’t immediately associate with the pizza industry – technology.
Domino’s had already become one of the first pizza chains to offer online and mobile ordering in 2007. In 2011, its iPhone app was launched, and the Android version followed the next year. In 2015 it launched AnyWare, a technology suite that provides customers with 15 different ways to digitally order their pizza. And today, the company derives 65% of U.S. sales from digital ordering channels.
In 2018, Domino’s Pizza brought in total revenues of $3.43 billion. That means roughly $2.2 billion came in electronically.
I’d say this new trick is paying off.
But the company didn’t stop there. In 2017, Domino’s teamed up with Ford Motor (NYSE:F) to test how self-driving vehicles could play a role in delivery. A second phase of the test took place in Miami last year.
Domino’s remains first and foremost a pizza company. But it’s one of many that, to get a leg up on the competition and thrive in an increasingly technological world, are also transformed themselves into tech stocks.
Stores of the Future
Domino’s understood that it had to get on board the tech train or get left behind.
That is something more and more “old dogs” are beginning to understand. This embracing of new technology is making a lot of stodgy old businesses interesting again.
Walmart (NYSE:WMT) is one of the more recent examples. This past weekend, the company announced that CFO Jeremy King would take the stage at a conference to sell the world’s biggest retailer as one of the new tech stocks.
King runs Walmart’s technology arm, Walmart Labs, which is home to many of the different technologies the company is implementing. It now uses shelf-scanning robots that take away some of the “busy work” from employees. It uses virtual reality headsets and machine learning-powered robots to quickly get online orders (specifically grocery orders) out the door. It also uses machine learning to help with supply chain.
These are the real, next-generation kinds of technologies I cover in Matt McCall’s Investment Opportunities. And they represent excellent ways to make a lot of money as the world moves this direction.
“I’ve wanted people to understand we are building a tech organization,” said King. “We don’t get a ton of credit for being a tech company. But we have been for a long time.”
I can’t really argue with that. Can you guess who Walmart’s biggest competition is? Amazon (NASDAQ:AMZN), the largest online retailer in the world and the beast of digital commerce. If Walmart wasn’t tech-oriented, these two companies wouldn’t be on the same playing field.
Walmart has been busy building up its e-commerce business in recent years. It bought Jet.com and Hayneedle in August 2016. It bought apparel and lingerie retailers ELOQUII and Bare Necessities in October 2018. And in December it announced the acquisition of décor retailer Art.com.
These deals have positively affected the business. E-commerce sales jumped 43% in the most recently-reported quarter. In 2018, online sales grew 40%.
Walmart probably won’t have the kind of growth and upside I look for in potential investments, but I give the company credit for its exposure to next-generation technologies.
There’s One Stock Where I See Massive Upside Potential Now
I think Domino’s stock will certainly do well over time and turn out to be a decent holding for most investors. But if you’re looking for bigger gains over the long term, there are better opportunities in companies and trends in their earlier stages of growth.
My job is to help investors get into world-changing business trends early, like the internet revolution of the 1990s. Investors made 20 times, 30 times, even 40 times their money on tech stocks as the internet changed the way we work and live. And even 20 years later — with the post-2008 recession still hanging over our heads — I was able to get my readers into Stamps.com (NASDAQ:STMP), then a tiny company with an exclusive USPS contract, before it shot 2,438% higher!
We have multiple such trends right in front of us today: from the coming breakthrough in battery technology…to self-driving vehicles…to the exploding marijuana industry as legalization sweeps the world.
In fact, I’ve recently uncovered a tiny 73-cent pot stock insiders are saying could soon become the biggest marijuana company in the world.
With each individual share currently trading for pennies, you can own a sizable block of shares with a small initial investment. And if this tiny marijuana company grows even a modest amount… your big basket of shares could be worth millions.
For the best chance to turn a small investment into a fortune, I urge you to learn how to take a stake in this tiny 73-cent pot stock before March 21.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you’re interested in making triple-digit gains from the world’s biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today.