There's a supercomputer at the University of Tennessee that can predict the future. Sort of.
"Nautilus" scans tens of millions of news articles and archives from around the planet in search of emotive words -- words such as "angry," "tense," and "concerned." Words that convey emotions rather than facts.
The computer then plots and cross-references these words geographically to identify areas where changes in sentiment are taking place.
Remember the Arab Spring in early 2011? Nautilus had it pegged. Remember Abbottabad? Osama Bin Laden's final location was well within a 125-mile radius identified by Nautilus.
The problem was that scientists realized these things only in retrospect, after they went back to take a look at what the computer had been finding. Nautilus isn't yet sophisticated enough to send out alerts.
That sounds a lot like Andy Obermueller's job description.
You see, Andy is the chief strategist for StreetAuthority's Game-Changing Stocks advisory. In his quest to find The Next Big Thing -- and thereby help his readers make money from investing in it before the crowd -- Andy pores through mounds of publications on a daily basis to calculate what's coming.
The key difference between Andy and Nautilus? Much to the delight of his readers, Andy sends out alerts.
Last February, for instance, Andy alerted his Game-Changing Stocks readers to an Israeli company that makes a completely robotic surgical system for spinal operations.
Here's what Andy told his readers about Mazor Robotics (OTC: MZRTF):
Mazor caught my eye for a couple of reasons. First, it is the only company with FDA approval for robotic spinal procedures, which means that it functionally owns the market. Second, the size of the opportunity is significant -- about twice that of hip replacements, which is a $7 billion business in its own right. But there are dozens of players in that space. Here, there is only one.
Mazor's robots use 3-D image models and then use teeny tools to work very close to the spine. This often involves repairing bones using screws. The trouble with many spinal surgeries is that there is a 1-in-10 chance that the screw will be misplaced. When dealing with an area as sensitive as the spine, those are not good odds. Mazor's Renaissance system improves accuracy by more than 70%.
Most important, though, these amazingly precise robotic instruments decrease the need for re-operations by HALF. That is very important, because under new Medicare rules, if a patient is readmitted for the same reason within a certain length of time, the hospital must eat the cost of the second surgery.
To date, Mazor robots have a 100% safety record. In no documented case have they caused permanent nerve damage. That is particularly impressive given that the company's case volume has grown by more than 500% in the past four quarters alone.
In the six and a half months since Andy made that recommendation, Mazor's shares have risen 158%, or 21 times the gain in the S&P 500 during the same period. (Note: On May 28, Mazor's shares began trading as American depositary receipts (ADRs) on Nasdaq under the ticker symbol MZOR. Each ADS represents two ordinary shares of the company.)
In June 2012 Andy alerted his readers to opportunities he saw in a special type of entity known as a business development company, or BDC.
BDCs are publicly traded firms that invest in small, upcoming businesses in the hope that their stakes in those businesses will increase in value as those businesses grow. Like Andy, BDCs try to find The Next Big Thing and invest in it before anyone else.
BDCs are similar to venture capital or private equity funds in that they provide investors with a way to invest in small companies and participate in the sale of those investments. While venture capital and private equity funds are often closed to all but wealthy investors, BDCs allow anyone who purchases a share to participate.
Another advantage of BDCs: Many provide rich dividends, not necessarily because they want to but because they are legally obligated to. Like a partnership or a trust, the entity itself is not subject to income taxes. Instead, income is passed directly to shareholders and is taxed at their ordinary income rate rather than the dividend rate.
One of the BDCs that Andy recommended at the time was Triangle Capital (NYSE: TCAP), an investor in enterprises ranging from restaurants to health-care companies. In ranking this BDC as one of the "best of the best," Andy described Triangle as a "strong player with a diverse mix of defensive investments that pays out a lot of cash and has a long-term history of strong capital gains."
Triangle recently declared a quarterly dividend of $0.54 a share, which translates into a yield of 7.4% at recent share prices. Triangle's shares have posted a 58% gain in the 14 months since Andy wrote about the BDC, nearly triple the return of the broader market.