This is the fifth in a series of trend-spotting tips from Hilary Kramer's newly-released book, Ahead of the Curve.
In order to effectively spot trends, be a news junkie. This might be the most obvious tip in my book, but it is amazing how few people do it and how it can help get you ahead of the curve. Read the papers, listen to the radio, watch TV reports, and log onto bloggers that you respect. I'm not just talking about paying attention to the financial sections. The headlines from any section of the daily paper can uncover clues to trends in the making and companies that could turn hot and make you money.
For a simple example: it is unlikely you missed the news of the recent tragic bridge collapse in Minnesota. News reports on the collapse put a spotlight on the crumbling infrastructure problem in the U.S. If you follow the news on the radio, the TV, the papers and blogs, you've probably also noticed somewhere that the U.S. government in the next decade will dedicate more than $1.3 trillion of upgrades necessary to improve its infrastructure. Put two and two together, and you see how this infrastructure improvement will become a growing trend.
Using this trend, look to a company like TRC Companies Inc. TRC Companies Inc. (NYSE:TRR) to prosper. TRC's expertise lies services vital to infrastructure building and maintenance: Engineering, construction, remediation services, risk management, and pollution control. Its clients are the big guns: Government agencies, hospitals, banks, industrial properties and the likes. TRC has been known, additionally, for buying, and redeveloping, environmentally-contaminated real estate properties.
When I blogged about this company in early September, TRC was trading at $10.90 and it has rattled around this price since then. The headlines about infrastructure, and the strength of this company, tell me that this a bargain stock. The company was just beginning its three-year, costly turnaround strategy focused on improving the company's systems. Its plan should pay off by 2009. This is a stock that I think can hit $30 in the next several years.
Type of Stock: A player in infrastructure and engineering, TRC seems under investor's radar right now, and this is bound to change. I'm very bullish on TRC.
Price Target: TRC (the symbol is TRR) is a stock that has been hit in the downturn of the market, and it is a bargain at $10.99. I've maintained that we could see this hit the $20 within two years, and I hold strong on this.
Disclosure: author is long TRC.