How To Find Triple-Digit Winners In Any Economy

Nick Dreystadt is an unsung hero of American business.

In 1933, the engineer knocked on the boardroom door at General Motors (NYSE: GM) and asked to be heard for ten minutes. He said he could take GM’s most problematic division and make it profitable within 18 months.

It was a bold move. The historian John Steele Gordon said Dreystadt’s intrusion into the exclusive confines of the boardroom was roughly akin to a lowly priest knocking on the door of the Sistine chapel to advise the cardinals while electing a pope.

It was also a very bold claim: The GM division at issue commanded the highest prices, but it also shouldered the highest costs, and by a wide margin.

Then there was the small matter of timing: It was the middle of the Great Depression. But Nick Dreystadt nevertheless thought he could sell Cadillacs.

#-ad_banner-#His two-pronged plan was as simple as it was controversial.

Dreystadt told the board he would end a longstanding GM policy that barred dealers from selling Cadillacs to African-Americans, thus opening up a huge new market. Affluent blacks, Dreystadt noted, could not move into “rich” neighborhoods. They couldn’t join country clubs. But many professionals could easily afford the pricey cars, and it simply didn’t make sense not to sell to ready buyers.

Second, Dreystadt said, he would cut costs. Ruthlessly.

Cadillac had a culture of being an undisciplined and inefficient GM unit — it didn’t even make a profit in the booming 1920s. There was no reason that any given part should cost twice as much simply because it was going into a Cadillac instead of a Buick or Oldsmobile.

Indeed, under Dreystadt’s leadership, the division changed its entire modus operandi, with unflinching attention paid to the smallest detail. Dreystadt’s Cadillac produced a super-premium automobile whose costs were no greater than a Chevrolet. Sales soared as costs fell, Cadillac did extremely well, Dreystadt earned accolades and General Motors showed a profit every year of the Depression.

That’s a great story — a great American story.

It’s also surprisingly relevant today.

Leading American companies are doing now what Dreystadt did 80 years ago — creating products and services so compelling that even the most careful budgeters are willing to spend money on them. And if a company can persuade a country that is out of work and out of cash to pony up for its offerings, then it’s a strong candidate for true Game-Changer status.

You see, as Chief Investment Strategist for StreetAuthority’s Game-Changing Stocks newsletter, I’m constantly on the look for innovation. I’m looking for what’s new. What’s “must have.” And what still has room to grow and thus continue to drive profits and share prices higher.

The fact is, there are a lot of Nick Dreystadts in this country.

They have a lot of good ideas and even a few truly great ones. Fueled by a passion for their calling, an unfettered entrepreneurial drive and an intense competitive instinct, they aren’t even remotely worried about the economy. Instead, they are laser-focused only on the better mousetraps they are perfecting that will bring the world to their doorsteps — with its wallet open.

My job is to find these great ideas and figure out how to profit from them before they hit mainstream media and the feeding frenzy begins.

That’s when the lion’s share of the profits are pocketed.

To prove my point, let’s take a look back at a group of stocks I told my Game-Changing Stocks readers about in August 2010. I don’t have to remind you that during this time, things in the overall market were looking uncertain. Growth was anemic, and worries were building about the economy’s ability to adequately recover from the depths of the financial crisis.

It was in this climate that I told readers about recent legislation that added incentives for hospitals and medical professionals to begin using health-care software to keep medical records electronically.

The healthcare sector was woefully behind others in joining the electronic era, and many experts identified this as one factor contributing to rising healthcare costs. If healthcare professionals could join the 21st century by keeping electronic records, it could lead to better communication between doctor’s offices and hospitals, better outcomes for patients, and help to lower costs for the overall system in the long run.

I hypothesized that this legislation would lead to big business for healthcare software players. Even in an uncertain economic environment, I knew this was a game-changing development that could make a lot of money for savvy investors who got in early. Nearly four years later, that’s exactly how things panned out.

Let’s take a look at three of my recommendations from that August 2010 issue.

The first was AthenaHealth (Nasdaq: ATHN). At the time, this company had a market cap of less than $1 billion — a relatively small company in the digital records business. Since that recommendation, AthenaHealth has returned 494%.

The second of these recommendations was Cerner (Nasdaq: CERN), which I called my “pure play” on the healthcare software market. This stock was trading with a lower P/E than Apple (Nasdaq: AAPL) at the time. Since being featured in Game-Changing Stocks, Cerner has returned 177%.

The third medical software recommendation was McKesson (NYSE: MCK), which was largely involved in pharmaceutical distribution at the time. But it was also doing business in the software arena. Since that recommendation, McKesson has returned 174%.

Now, keep in mind that since I recommended these three companies, shares of the S&P have risen 69%, and that’s nothing to laugh at. But these game-changers have transformed portfolios. This evidence proves what I have been saying for years… that only myopic investors worry about the short-term and let it keep them from investing in great businesses that will do well over the long run.

I don’t say all of this to simply pat myself on the back. Rather, my goal is to explain that just like Nick Dreystadt with Cadillac, true game-changing ideas can profit just as well in times of economic uncertainty as they can during periods of prosperity.

The picks I mentioned above are still game-changers. They’re still worth investing in today. But keep in mind, the big gains have already been made. That’s because savvy investors ignored the uncertain climate back in 2010 and saw a game-changing opportunity and bought in early.

The good news is that the next game-changer is always around the corner. In fact, I’ve recently been telling my Game-Changing Stocks readers about five brand new game-changers with triple-digit upside. These companies have the potential to upend the “Big Three” Detroit automakers… “kill the gasoline engine”… even usher in a “2nd Industrial Revolution” and deliver 3,900% growth over the next 11 years. To learn more about these companies and access their names and ticker symbols, simply read this report.