Stocks That Could Join the $1,000 Club

[Editor's Note: This analysis of tech stocks to buy originally ran Oct. 30 to Michael A. Robinson's Strategic Tech Investor readers. You can get Robinson's tech investment columns for free; just sign up at the bottom of this page to start profiting today.]

In the July 26 Strategic Tech Investor, we explained why we believed that search-giant Google Inc. (Nasdaq: GOOG) was a "must-own" stock.

Using the five rules we created to identify the biggest-potential stocks, we told you how the Mountain View, Calif.-based tech innovator was continuing to position itself as a company that will continue to create wealth for its stockholders.

Not long after, several folks wrote in to say that Google's $885 share price made the stock too pricey for them to own.

We countered with the same response we always make to such comments: On a given amount of cash, a 30%, 50%, or 80% return will net the same profit - no matter if that cash is invested in a $50 stock or a $550 stock.

And, with Google, we're already on our way: The share price has already advanced 15%, meaning that $885 stock is already trading north of $1,000 a share, and closed Monday at $1,015.

Sometimes, you'll find, the stocks that appear the most expensive actually turn out to be the cheapest at the time you buy them.

That got us thinking ... and prompted us to ask this question: What other companies are destined to join the "Thousand-Dollar Club?"

Stocks to Buy: High Prices = High Profits

Google isn't the only member of the "Thousand-Dollar Club" right now.

There's also Priceline.com Inc. (Nasdaq: PCLN), the Web-based travel firm known for its campy-but-awesome ads featuring campy-but-awesome actor William Shatner. Priceline's shares were recently trading at $1,060.

Both GOOG and PCLN have been terrific performers. Over the past two years, Google has surged 73%, while Priceline has soared 105%. Over the past five years, GOOG is up 187% with Priceline up an astounding 1,925%.

Those stunning returns have positively dwarfed the 39% and 80% gains of the Standard & Poor's 500 Index during those same two- and five-year periods.

Let me tell you ... I've been a financial strategist and columnist for years and years. And whenever I or one of my colleagues would talk about gains of this magnitude, the response we invariably would get would be something akin to: "That's great ... now tell me about the next stock that's going to give me gains like that."

We hear you.

And we're responding.

Employing the five wealth-creating rules we use to identify tech plays for our STI readers - and the "Black Box" system that we employ in our Radical Technology Profits advisory service - we set out to identify a short list of stocks that could generate the prolonged, towering gains that will "mint" new members of the "Thousand-Dollar Club."

We eliminated any companies that pose what we refer to as "wildcard risks" - downside potential that could derail the required rally.

As a result of this exercise, we identified five companies that are in the right types of businesses, that possess the remarkable strategic models, and that have the potential to execute - putting them on a course that should one day lead to membership in the exclusive "Thousand-Dollar Club."

I even "handicapped" the candidates, giving you odds on each of the five candidates. (I relied on some "techniques" that I picked up playing the ponies and at the Blackjack tables ... it's a story that I'll get around to sharing with you one of these days.)

So let's start with the best candidates, and work our way back from there. For each stock, we present the odds of that stock getting to $1,000 a share, the ticker and the current share price right at the start of each recommendation.

We conclude each profile with the "investment case" that induced us to choose that stock.

So let's take a look...

And we'll start with my favorite social-media stock.

(Even Money), LinkedIn Corp. (NYSE: LNKD), recent price: $240 a share: This is by far the most successful "social" networking site out there. I use the term loosely because it really has become something of a business e-commerce site focused on executive recruiting.

That's why users are willing to sign up for the paid version. With a market cap of $27 billion, LNKD's share price reached $240 after enjoying a two-year run that added 160%. It recently grew quarterly earnings by 33%.

(2-1), Amazon.com Inc. (Nasdaq: AMZN), recent price $332: CEO Jeff Bezos seems determined to take control of Internet shopping. He invests heavily in back-end technology such as robotic handlers. He also purchases promising firms like shoe e-tailer Zappos.com.

All this has added up to a huge increase in Amazon's reach and in the breadth of the businesses the company is involved in. Margins remain thin, but those should improve once Bezos can leverage all those investments. Amazon has experienced a sales-growth rate of 33% over the past three years, and the company is predicted to report triple-digit earnings gains this year. That's why we're so confident that Amazon will be soon joining the exclusive "Thousand-Dollar Club."

(3-1), Netflix Inc. (Nasdaq: NFLX), recent price $330 a share: I can't tell you how many times in recent years I've watched pundits, hedge-fund guys, or sell-side players eulogize this leader in video streaming. But it's the eulogizer who always gets buried.

You see, Netflix continues to keep moving up higher - it has actually advanced 450% in the past year. It has a $19 billion market cap and now has some pundits writing about it as America's "next TV network." That's quite a turnaround from the eulogies we had been reading.

(4-1), Apple Inc. (Nasdaq: AAPL), recent price $530 a share: In a recent issue of STI, we said we believed that Apple could easily double from where it was trading. And we told you that activist investor Carl Icahn - who has taken a $1.5 billion stake in the company - would be one of the catalysts.

As it turns out, Icahn's estimate of Apple's upside potential perfectly matches mine. He's pushing company CEO Tim Cook to launch an immediate $150 billion stock buyback and told Apple's top honcho "if you if you execute this buyback as proposed, [in three years] we expect the share price to appreciate to $1,250."

We think Apple could join the "Thousand-Dollar Club" even sooner than that.

(5-1), MasterCard Inc. (NYSE: MA), recent price $729 a share: Most folks view MasterCard as a credit-card or financial-services firm.

It's not.

At its heart, MasterCard is a high-tech firm; in fact, the company is one of the biggest users of high-tech that you'll find. It has an expertise in digital-payments processing for consumers, retailers, banks, government agencies, and more. And it uses technology to deliver that expertise to those customers.

Over the last two years, MasterCard's stock has rocketed 108% - 2.7 times the performance of the S&P 500. With a market cap of $87 billion, the stock has a 37% profit margin and a return on stockholders' equity (ROE) of 45%.

Putting It Together

One of the great things about predictions like these is that you don't need them to come completely true to benefit in a big way.

By that, I mean that even if the stocks get part way to the $1,000 goal we've identified, you're still going to have some nice winners in your pocket.

And we believe that the forces at work with each stock make that a very likely scenario.

In short, this money will be put to good use, and your portfolio will be a big beneficiary.

And so will you.

These are the kinds of meaningful gains that we look for here for you - the gains that Strategic Tech Investor was created to help you pursue.

Rest assured: We'll keep tabs on these stocks, and on the accompanying gains that we are predicting.

Our search won't end there, however.

We'll continue to look for more.

For more from Michael on tech stocks to buy, check out I Just Got Another "Strong Buy" Signal...