The Profitable Trend Most Ignore

Written by Ryan Stancil
Posted November 18, 2020

There’s a trope in certain types of science fiction in which a population lives under the shadow of just a few massive corporations. These companies often have a hand in every facet of life. Examples of their existence show up on every billboard, street corner, and product imaginable. 

And as is often the case, life imitates art. While the giant corporations that we know today can be seen as toned-down versions of the companies portrayed in fiction, they still share that quality of being ever-present. Whether directly or indirectly, you’ve probably contributed to the bottom line of a company like Google, Walmart, or Amazon in the very recent past. It’s likely that you will again within the next few days, if not hours.  

The presence of these companies is such that it’s nearly impossible not to. And their goal of constant, unending growth means it’s going to be that way for the foreseeable future. It seems like nothing can stop them, certainly not smaller companies working in sectors that the big companies are looking to enter. 

It’s something that happens all the time. Because of that, the opportunity is there to make money while big companies continue their unending growth. 

A Silent Trend

When it comes to big companies, they don’t come any bigger than Amazon. Earlier this week, the company launched a new service for prescription medication ordering and fulfillment. Along with buying medication, customers can use tools to help them make informed decisions about their own health care. The service also lets customers speak to pharmacists over the phone for advice. This all comes just two years after Amazon paid around $1 billion to acquire an online pharmacy company called PillPack. That’s just one more branch in the Amazon empire. 

On the surface, this shows Amazon making inroads in the massive health care industry. If you go deeper than that, however, it shows that this is the latest in a long-running trend. Large companies are making their way into new industries by buying up smaller companies. Amazon alone has done it for sectors like video streaming, cloud computing, robotics, and games, just to name a few. 

Google has followed a similar path over the past decade or so. Some of its acquisitions have given the company a foothold in areas related to education, wearable technology, and home automation. 

Other big companies, like Apple and Walmart, tend to acquire companies whose operations are closer to their own core business models, but the idea is the same. A small company has something that will allow a larger company to expand, the larger company writes a check, and the small company gets absorbed.

When that happens, the people running the smaller company and any investors in that company are best positioned to benefit from the sale. 

Finding Deals Before Anyone Else

The trend of small companies with breakthrough products and services getting acquired by big players is something we talk about extensively here at Outsider Club. We’ve talked about big beverage companies like Anheuser-Busch partnering with marijuana companies to offer products in that sector as laws loosen. 

It happens with gold companies. We’ve talked about small ones being acquired by bigger ones as the gold market continues its upward trend. 

It happens with alternative fuel companies. Bigger firms are looking to get ahead as countries seek to tackle climate change by getting away from fossil fuels. 

In all of these instances, these buyouts lead to the kinds of gains most investors only dream of. It isn’t always easy to find these companies — they’re usually small businesses — but the payoff when one of the big players comes knocking makes the effort worth it. 

The investing landscape is going to look very different over the next few years. It’s going to be increasingly important to eye any possible moves as closely as possible. 

We’ll help you do exactly that here at Outsider Club. Keep an eye out for updates in which we will tell you about small companies on the verge of breaking out well before any mainstream media outlets catch wind of them. 

Keep your eyes open,

Ryan Stancil
Contributing Editor, Outsider Club

Ryan is an associate editor and regular contributor to Outsider Club. Since 2014, his articles have offered commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments.

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