IMAGINE investing in Apple before it made the iPhone, Novo Nordisk before fat jabs took off or Amazon before the hype – it’s most investor’s dream.
There’s no need to go back in a time machine though. We’ve asked top experts which six stocks they believe are going to be the next big thing… and one would have already doubled your money if you invested a year ago.
Investing in the right companies can earn you thousands of pounds if you’re lucky Credit: Getty
Investing is not about looking back at the past – the trick is to spot the winners of the future.
Many investors buy shares in companies after they have risen, hoping they can cash in if the upward trend continues.
But this can be a risky strategy. Remember, there are no guarantees shares that have climbed will keep going.
Contemporary Amperex Technology
Suggested by: Robert Marshall-Lee, manager of the Cusana Emerging Markets Equities fund
Robert Marshall-Lee says CATL shares are currently good value and expected to grow Credit: Supplied
Also known as CATL, this is a business that dominates the battery industry.
Nearly every European car brand, as well as Teslas, are powered by CATL, says Robert Marshall-Lee, manager of the Cusana Emerging Markets Equities fund.
CATL, which is based in China, has a 40 per cent share in the global electric vehicle market and a 30 per cent share of the energy storage market.
“The company is fuelling the growth of solar power,” says Marshall-Lee, something that is only gaining demand as more countries look to improve their energy independence while conflict in the Middle East continues.
“Unlike Russian gas pipelines, CATL’s batteries and solar technology offer 25 years of resilience,” says Marshall-Lee.
“The shares are good value and expected to grow by up to 30 per cent a year. This is an awesome company.”
CATL shares are up 88 per cent over the past year — £100 invested would have grown to £188.
Besi
Suggested by: Joseph Stephens, co-manager of the Guinness Global Quality mid cap fund
Joseph Stephens says Netherlands-based chipmaker Besi has stayed under the radar Credit: Supplied
Semiconductor chips are a vital component in everything from our smartphones and tablets to electric cars and microwaves.
Given how important these chips are, it’s not surprising that shares in the companies that make them have soared.
But while you might have heard of Nvidia and ASML, Netherlands-based Besi has stayed under the radar.
Rather than making the chips themselves, Besi deals with their packaging — how the chips are stacked and interconnected after they are made.
Joseph Stephens, co-manager of the Guinness Global Quality mid cap fund, explains Besi’s technology means that chips can be bonded directly together.
Packing them more closely means they can communicate faster and use less power, which helps improve AI performance.
It’s technical stuff! But that means when companies find a firm like Besi that can do it well, they become very loyal customers, says Stephens, and can make a decent profit.
Its shares are up 280 per cent over five years — a £100 investment would have grown to £380.
I invested in a ’10-bagger’ stock and turned £20k into £700k
LENA Birse took one of the biggest gambles of her life in 2017, when she invested £20,000 in a little-known computing company she had a feeling would “go big”.
Her huge risk paid off. Now Lena’s investment is worth more than £700,000 – even AFTER she cashed some of it in to pay off her mortgage.
Lena, from Bristol, has hit upon the investment “holy grail” by investing in a ten-bagger stock, which is where the value goes up at least tenfold.
Many investors hope to find one themselves, but few ever do.
Her ten-bagger stock was Nvidia – one of the so-called “Magnificent Seven” technology stocks.
These are seven of the largest and highest growing tech companies in the world, and the remaining six are: Alphabet, Amazon, Apple, Meta, Microsoft and Tesla.
Nvidia makes semiconductor chips used in computers, mobile phones and more and has been one of the biggest winners from the boom in Artificial Intelligence.
Lena, who is in her 50s, first read about the computing company in 2017 on a newsfeed, and had a gut feeling it would blow up. It seemed to be growing in sales and profit, with big orders being placed for its highly rated products.
She says: “I found it a fascinating company and was really blown away by it.
“Everyone was saying that they were making the best chips. I figured that if everyone is using computers, then everyone would be buying their chips. I wasn’t even thinking about AI back then.
“You don’t have to be a specialist in an industry to see where the world is going and to understand that a firm is making something that everyone will want.”
Raspberry Pi
Suggested by: Indriatti van Hien, manager of the Henderson Smaller Companies Investment Trust
Indriatti van Hien says Raspberry Pi has a “bright future” and an “exciting pipeline” Credit: Indriatti Van Hien
Raspberry Pi’s tech is used in everything from airport departure boards to dartboards
No, it’s not an item on the dessert menu. Raspberry Pi makes very small computers that can be plugged into a screen, keyboard and mouse and used to control devices.
They are often used for projects such as making robots and smart gadgets.
The firm started life as a UK educational charity, founded to give young people affordable, hands-on access to computing.
Later, others started to use its computers in everything from airport departure boards to auto-scoring dartboards, explains Indriatti van Hien, manager of the Henderson Smaller Companies Investment Trust (a type of investment fund).
Van Hien likes that the firm has a strong brand, invests continuously and has an “exciting pipeline” of new products being developed.
“Raspberry Pi’s future is bright and the business could be at a critical point as the adoption of AI accelerates,” she adds.
Shares are up 81 per cent over five years — a £100 investment would have grown to £181.
Arthur J Gallagher
Suggested by: Nisha Thakrar, from Nedgroup Investments
Expert Nisha Thakrar says the best investments “often feel uncomfortable at first” Credit: Nisha Thakrar
An insurance broker may not be an obvious choice for someone looking for the Next Big Thing, but Nisha Thakrar, from the firm Nedgroup Investments, thinks otherwise.
“It looks unremarkable at first glance, but the company has steady earnings, keeps its customers for years, and grows quietly,” she says.
Insurance is an everyday must-have and that’s not going to change, Thakrar argues.
Headquartered in Chicago, Gallagher operates across about 130 countries including the UK, New Zealand and Norway.
In its latest company results, sales were up a whopping 28 per cent to about $4.8billion (£3.5billion). This was welcome news given that the company has had a tough year – its share price is down about 36 per cent over 12 months after its sales failed to meet expectations.
There were also concerns that it had been buying up too many other companies and the impact of changes to Medicare in the US (the government-backed healthcare system in the country).
Thakrar says: “But the best investments often feel uncomfortable at first. If everyone loves something, the shares are usually expensive.”
Over five years things look better — shares are up 37 per cent and a £100 investment would have grown to £137.
What are the risks?
BEFORE you start investing, you need to understand the risks.
The return you make will depend on how much you invest and where.
As we have seen recently, the stock market can dramatically fall.
The American stock market last year saw its biggest drop since the start of the Covid pandemic after US President Donald Trump announced plans to introduce punitive tariffs on goods imported to the US from other countries.
The UK’s own stock market, the FTSE 100, fell by more than 10 per cent after the news.
You must be prepared to lose it all – so only invest money you can afford to sacrifice.
You need to be willing to invest cash for at least five years to mitigate any dips and allow your money to recover. If you can’t afford to lock up your money for this long, investing may not be right for you.
It’s usually better to drip feed money into your investments instead of putting down a big chunk of money in one go.
Before you start investing, experts say you should have a minimum of six months’ of wages in a savings account before you start and only invest money you can afford to lose.
SAP
Suggested by: Christopher Rossbach, manager of J. Stern & Co World Stars Global Equity fund
Christopher Rossbach believes German software company SAP could be the next Nvidia Credit: Supplied
Christopher Rossbach, manager of J. Stern & Co World Stars Global Equity fund, started investing in SAP shares a year ago — he believes it could be the next Nvidia.
SAP is a German software company, whose services Rossbach believes will become increasingly used by businesses.
The firm provides software that helps companies centralise all their processes,which helps to make their business more efficient and can help cut costs.
“As AI grows, companies will increasingly depend on the data that SAP provides, but we think investors are yet to recognise the company’s potential,” he says.
Rossbach says SAP reminds him of Amazon in 2012, a time when it was just thought of as an online marketplace but was in fact investing huge sums building a cloud computer business, which has since become a global leader, used by more than four million businesses worldwide.
SAP shares have dipped recently after it reported disappointing results, and amid concerns that AI could affect its business, but Rossbach thinks that makes it a good time to buy.
Shares are up 21.5 per cent over five years – a £100 investment would have grown to £121.50.
The Schiehallion Fund
Suggested by: Adam Norris, from the investment firm Columbia Threadneedle
Adam Norris suggests a different approach – an investment fund with picks from experts Credit: Supplied
The Schiehallion Fund has previously invested in space exploration company Space X Credit: Reuters
Investors who aren’t confident picking individual stocks can leave it to an expert.
The Schiehallion Fund is an investment fund which is all about finding the big names of the future.
It invests in private companies that are not yet listed on the stock market, and which everyday investors would not otherwise be able to get access to.
Investing in private companies can be risky as there is a chance they could fail, but the fund managers tend to focus on more established businesses rather than start-ups, which lowers that risk.
Adam Norris, from the investment firm Columbia Threadneedle, says: “AI is already permeating all of our lives, yet the companies powering this revolution are not always listed on public stock markets, making it difficult for ordinary investors to partake in their growth.”
Its biggest investments include Space X, the space exploration company owned by Tesla-founder Elon Musk, and ByteDance, the company behind the social media platform TikTok.
Over five years the fund is up just 9 per cent, but over the past year it is up 105 per cent — and £100 investment would more than have doubled to £205.
