Is 20,369% Growth Really Possible?
A week or so ago, my assistant Stephanie dropped the mail on my desk. It was the usual assortment of advertisements, bills, papers, journals, and magazines. I dug through the pile (Did I mention I get a lot of mail?) and suddenly something caught my eye…
It was Inc. Magazine.
For those of you who don’t know, Inc. Magazine is a great way to get inside the brain of an entrepreneur. I enjoy reading their articles. They always highlight a number of businesses. And they often focus on solving unique small business problems.
It’s also a great tool for identifying trends in the market.
The September issue is very interesting. If you haven’t seen it, I suggest you pick up a copy. As I read the magazine, I kept noticing a trend… one of the biggest trends taking shape in our economy right now.
Flipping through the magazine, I came across a list of the 500 fastest growing privately owned U.S. companies. The first thing I noticed was the number of energy companies on the list. Most notably, the number one slot was held by an energy company.
Let me introduce you to Ambit Energy.
Ambit’s a privately owned company. Over the last few years, they’ve managed to grow revenue by a jaw dropping 20,369%.
Let me say that again… their business grew more than 200-fold in just a few years.
How’d they do it? Ambit specializes in reselling natural gas and energy in deregulated markets. What’s amazing is they don’t produce any energy… no power plants here. They also don’t deliver the power… so no expensive transmission lines to worry about and maintain.
They simply act as a middleman, reselling energy.
Ambit contracts with power providers at wholesale prices and then resells the energy to retail customers. They use direct sales channels and have more than 70,000 independent agents.
What Ambit does is handle all the switching, billing, collections, and customer service.
In 2009, they generated more than $325 million in revenue. And now they have more than 170 employees. Amazing if you ask me.
Now, Ambit wasn’t the only energy company on the list. There were 15 others all sporting pretty incredible growth rates… the smallest energy company was Rising Sun. They’re a Hawaii-based solar installation company who only grew at a rate of 654%.
Do you see the emerging trend?
Energy is often seen as a stodgy, old school industry. When investors talk about exciting industries, it’s usually biotech and technology companies. But that’s all changing. Now companies in the energy industry are looking at huge growth opportunities.
Here in the US, we’re the world’s largest consumers of energy.
Nothing reminds me of that more than when my air-conditioning kicks on… a necessary expense when it’s 110 degrees outside. Our thirst for Oil, Coal, Natural Gas, and even Alternative Fuels is growing by leaps and bounds.
But countries like China and India are growing even faster… and their demands for energy are skyrocketing. It just tells me one of the fastest growing sectors for many, many years to come will be energy.
Here’s the upshot…
Given the massive growth potential, energy is where we should be looking to put a big chunk of our investment dollars.
Now you can’t invest in companies like Ambit or Rising Sun… they’re still private. But if you do a bit of research, you can find a whole bunch of exciting public companies with great growth potential. All it takes is an eye for the bigger picture!
Category: Commodities
