Buying and holding high-quality stocks is arguably the best way to predictably generate wealth over the long term. But finding the best stocks the world has to offer isn’t always easy — especially if their underlying businesses are not widely followed on Wall Street.
So we asked three Motley Fool contributors to each identify a promising stock that isn’t on Wall Street’s radar. Read on to learn why they like China Literature (SEHK:772), B&G Foods(NYSE:BGS), and Secoo Holding (NASDAQ:SECO).
Curl up with a good (digital) book
Steve Symington (China Literature): You may not have heard of China Literature since its spinoff from Chinese gaming and social media giant Tencent almost exactly a year ago. But with around 7.3 million writers publishing nearly 11 million online literary works on its platform, China Literature already enjoys an enviable network effect driving healthy growth. Revenue in the first half of this year climbed nearly 19%, including 13.3% growth from its core Online Reading segment, and 103.6% growth from IP Operations. The latter — which comprised less than 14% of total sales — showcased China Literature’s knack for lending its enormous written library to the country’s fast-growing number of content-adaptation opportunities in mediums like TV, film, and video games.
But shares also plunged in August after China Literature unveiled a roughly $2.3 billion cash-and-stock deal to acquire leading Chinese TV, web series, and film producer New Classics Media. The acquisition just closed at the end of October, ushering in a new era for China Literature in which the company will be able to directly benefit from the adapted fruits of its content library.
For astute investors willing to buy shares of China Literature — which trades on the Hong Kong Stock Exchange — before those benefits materialize, I think it could offer enviable gains in the coming years…
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