Discover 4 Stocks with 545% Profit Potential

For the last week, Daily Profit readers have been following our March Madness stock competition.
We started with 16 impressive stocks in eight of the fastest growing sectors. Since last Monday, we’ve pitted those stocks against each other in a fierce competition. And we’ve now whittled the field down to a Final Four.
With just four stocks left in the competition, any one of them could win our March Madness tournament.
The winner will be revealed tomorrow, and crowned “The Next Netflix.” In my real-money $100k Portfolio investment account, I’ll be buying $10,000 of this stock (click here to learn how to get my email alert of the Buy Notice).
But before revealing the winner, I’ll explain why each of our Final Four stocks could be The Next Netflix. Each stock has an extremely promising business in a high-growth sector. And early investors could see explosive profits in the months ahead.

March Madness Stock #1: DataWatch (Nasdaq: DWCH)

DataWatch is a $230 million market cap stock that is in the big data sector. That’s tiny compared with the best-known companies in the industry: Splunk (Nasdaq: SPLK), with a $7.7 billion market cap, and Tableau Software (Nasdaq: DATA), with a $4.6 billion market cap.
The company makes data visualization software. This software allows its 40,000 clients – including 99 of the Fortune 100 companies – to take data from many sources and create analytics reports. In today’s information world, every large company from banks to retailers is using data to make informed business decisions.
Over the last two years, the company’s sales have grown by 69%. Despite that growth, the company reported a net loss last year. Those losses may be holding back the stock.
Why DataWatch Could Be The Next Netflix
Big data is a huge and rapidly growing business. Research firm IDC estimates that the industry is growing at 27% per year. By 2017, it’s expected to be a $32.4 billion industry.
DataWatch is in the midst of a transition. A new management team took over in 2011, and has been focused on big data solutions. Last year, DataWatch bought a small and innovative Swedish company that offers real-time big data analytics. These newly acquired technologies will provide the company with new services to sell to its existing customers.
Given its small size, most investors haven’t heard of DataWatch. That may be one of the reasons that the stock trades at less than 6-times sales. When you consider that its larger competitors trade at a price-to-sales multiple of 14 – 19x sales, it’s easy to see that DataWatch shares are undervalued.
Today, DataWatch stock isn’t being embraced like other big data stocks. When investors see sales growth of 30% in 2014, I expect that this stock will get the attention it deserves. If perception changes, DataWatch could be a big winner in 2014.

March Madness Stock #2: InvenSense (Nasdaq: INVN)

InvenSense is involved in another of the biggest technology trends: wearable technology. The company’s motion tracking sensors are used in a growing number of technology devices, including smartphones, tablets, gaming devices, and Smart TVs.
The biggest market for the company’s chips are smartphones. Samsung is the firm’s largest customer, accounting for more than 30% of sales. Other Android phone makers including LG and China’s Xiaomi are also big customers.
The rapid growth of Android phones has been driving sales growth at the company. Other the last two years, sales grew an impressive 116%. Despite that rapid growth, the stock price has risen just 25% over the last two years.
Why InvenSense Could Be The Next Netflix
The market for motion sensors is estimated to be $2.2 billion in 2014. With annual sales expected to be around $250 million this year, InvenSense has an 11% market share. That means that the company is a meaningful player, but also has an opportunity to steal market share from its competitors.
In addition to the motion sensor market, InvenSense is expanding into the voice recognition business. It appears that the market may not be putting much value on this new opportunity for the company.
InvenSense is expanding at a healthy clip: analysts expect sales growth of 20% in 2014 and 27% in 2015. The company is already profitable, and its profit potential should grow as sales rise.
This stock offers investors one of the best ways to invest in the explosive growth of wearable tech.

March Madness Stock #3: Spark Networks (NYSE: LOV)

Spark Networks is a robust online dating company, with 297,000 paying subscribers. The company isn’t well known, with a $125 million market cap and just three Wall Street analysts following the stock.
Launched 16 years ago, the company’s JDate is the #1 dating site for Jewish people. With a 76% market share, Spark has figured out how to build a niche dating web site for religious people.
The company is capitalizing on that expertise with its new endeavor – ChristianMingle. You may have seen the company’s commercials on late-night TV. Those marketing efforts are getting traction, with ChristianMingle revenues growing from $6 million to more than $40 million in just three years.
During those last three years, the number of subscribers has grown annually at 33%. That has translated into a 70% increase in revenues, which reached nearly $70 million last year. Despite the impressive growth, Spark Networks shares trade at their lowest level in two years.
Why Spark Networks Could Be The Next Netflix
Today, Spark Networks operates a very profitable Jewish dating web site. The company is taking profits from that business and investing in marketing of the newer Christian web site. As brand awareness grows, the company should be able to reduce marketing expenses and turn a solid profit.
As a result of this considerable marketing expense, Spark is losing money. Last year, the net loss totaled just over $12 million.
The real appeal here is the market size. The number of Christians dating online is 30x the Jewish market. If Spark can replicate its prior success with ChristianMingle, then there is tons of room for the company to grow. If Spark can deliver, this stock is extremely undervalued at just $5 per share.

March Madness Stock #4: Zynga (NYSE: ZNGA)

With a market cap of nearly $4 billion, Zynga is the largest stock of our Final Four, and the best-known company. Thanks to its partnership with Facebook, you’re probably familiar with its FarmVille or CityVille games. Even though I’ve never played these games, I see frequent updates about them in my Facebook News Feed.
The social and mobile game business is all about “hits.” Zynga has had a few over the years. However, the company’s revenues have declined from $1.1 billion to $873 million over the last two years. The declining revenues and steady losses have made Zynga a poor investment.
Zynga had its IPO in late 2011 at $10 per share. After briefly jumping to $14, the stock has since dropped to around $4.50. That drop has attracted some well-known hedge funds and institutional investors to the stock. Last week Steven Cohen’s SAC Capital reported that it now owns 5% of Zynga’s stock.
Why Zynga Could Be The Next Netflix
Online gaming is a growing pastime. For Zynga, the growth of Facebook could translate into increased gaming revenues. While the social gaming space is getting more competitive, Zynga is an established leader in this new industry.
Zynga is in the midst of a turnaround. Earlier this year, the company acquired a competitor for more than $500 million and simultaneously laid off 15% of its staff. The company appears to be on track to grow its revenues in 2014, and reduce its expenses.
The stock is largely disliked: more analysts rate the stock a Sell than a Buy. Poor historical performance and low expectations make it possible to see a nice surprise from Zynga in 2014. It may make sense to follow the smart-money investors who are betting on a turnaround from Zynga.
There are many reasons to buy shares of our Final Four. Each of these stocks has traits similar to Netflix back in 2011 when I recommended the stock to my $100k Portfolio subscribers.
What made Netflix such a big winner?  A unique combination of 1) an industry on the eve of explosive growth, 2) a series of high-profile mistakes that sent shares plunging, and 3) a company that was largely misunderstood and overlooked.
All of our Final Four stocks are winners with extraordinary profit potential. But in my $100k Portfolio, I’ll only buy shares of one company.
You may have missed buying Netflix with me in December 2011 at $70. But I want to make sure that you don’t miss out on The Next Netflix.
I’d like to make sure that you’re the first person to get my timely Buy Alert tomorrow morning.  If you want to get invested in The Next Netflix, just click here now. It’ll take just one minute of your time. I’m convinced that this could be the single best investment you make in 2014.
I look forward to sending you my recommendation tomorrow.

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