It’s a target-rich environment for vulture investors with close to 1,800 stocks on my screen down 50% or more as we close out the year, observes Hilary Kramer, growth stock expert and editor of GameChangers.
All you need to rack up a big score is a little vision and a lot of confidence that a few of these fallen angels can fly even a fraction of that height again.
But while I can talk old favorites like Chewy (CHWY), down 25%; Airbnb (ABNB), down 52%; and Bill (BILL), down 55%, all day, the real breakout of 2023 might turn out to be Mobileye (MBLY), which is already on the move and has practically an unlimited runway.
The key to this stock is simple: Intel (INTC) paid $15 billion for Mobileye back in 2017, spent another $11 billion incubating its autonomous vehicle sensor technology and then let it go in October at a valuation just under $17 billion.
Retail investors wouldn’t have accepted a negative ROI — but Intel can afford to sacrifice an immediate windfall exit in pursuit of a rich longer-term outcome months or even years down the road.
The deal was deliberately priced so low that Wall Street worried that desperation was a factor. However, MBLY has gotten enough traction to make me think rumors that the deal would originally go out at $50 billion were more prophetic than anything else.
One day soon, this company will truly be worth that much — and then Intel can book a triple-digit exit with ease. After all, Mobileye hasn’t spent the last five years asleep. When it got taken out, the business was only generating around $500 million a year. Sales have practically quadrupled, which implies a substantially larger valuation.
As electronic “eye” sensors become standard in the automotive industry, there’s at least another double coming on the top line before the decade runs out. This technology is rapidly becoming ubiquitous. I wouldn’t be surprised if MBLY gets bought out again.
