When it comes to growth-investing, trend spotters like to get in early on a theme that is just getting started. However, lucrative opportunities can also be found in themes that are coming to an end.

 

#-ad_banner-#A key long-term theme in the U.S. economy that has peaked and is in retreat: full-time employment.

 

The historical contract of traditional employment, which provided workers with a specific job description, set compensation and greater job security (or at least the perception of it) is no longer the obvious choice — for business owners and workers alike. Indeed, since the recession, this employment model has been on its way out.

 

Tepid economic growth has led employers to grow more cautious when it comes to new hires. The rising cost of healthcare benefits, along with other forms of overhead, has led many firms to turn to independent contractors — self-employed freelancers who work from home or onsite full- or part-time as needed, often on a per-project basis.

 

Independent contractors can be more cost-effective for many reasons. Employers don’t have to share in their payroll taxes, buy benefits for them or provide them with other perks, like paid vacation and sick time. And contractors often work for less money.

 

As a result, the freelance headcount is exploding. Currently, a third of U.S. workers — 53 million people — are self-employed, reports the Freelancer’s Union, a nonprofit contractor advocacy group. What’s more, the freelance workforce is projected to rise by 6% annually to 71 million during the next five years.

 

To profit from this trend, investors should consider investing in Intuit, Inc. (Nasdaq: INTU), the leading provider of do-it-yourself income tax software through its well-known TurboTax brand, which has 29 million users. Intuit’s stock nearly tripled in the past five years, far outpacing the S&P 500’s roughly 90% gain during that period.

 

 

 

Look for share price upside to continue as the ranks of the self-employed continue to swell. The trend is especially favorable for Intuit’s small business segment, which has been riding the self-employment wave for some time and now generates half the firm’s $4.5 billion in annual sales.

 

This segment has been boosting revenues at a low-to-mid-teens growth rate on rising demand for self-employment-related products and services, particularly QuickBooks. Because of a reputation for being comprehensive, easy to use and well-supported, QuickBooks remains by far the most popular enterprise management and accounting software among small businesses.

 

To be sure, QuickBooks will face more competition from cloud-based alternatives in the years ahead. However, it’s likely to maintain market leadership through unrivaled brand strength and its own recent move to the cloud via QuickBooks Online, where growth potential is tremendous.

 

At this point, small business penetration is only about 2% in the United States, but a cloud-based platform should facilitate cross-selling of other services like invoicing and payment processing, according to Morningstar analysts.

 

Recent performance for QuickBooks Online has been impressive. In the third and fourth quarters of 2014, subscriptions jumped 36% and 40%, respectively. Intuit finished the year with 683,000 QuickBooks Online subscribers, suggesting the number of users could quickly approach the traditional offline QuickBooks user base of roughly one million.

 

Intuit’s other major segment, the consumer division, generates 37% of total revenues, primarily with TurboTax. The segment controls 61% of the do-it-yourself online tax return market, making it fairly mature. But it’s still capable of steady, mid-single-digit expansion despite slow growth in the overall U.S. taxpayer base. The reason: the number of e-filers is still rising each year and, as the market leader, Intuit is attracting the most new customers as the switch to digital tax returns marches on.

 

The outperformance of cloud services and steady growth of TurboTax were key factors in Intuit’s 8% overall revenue growth in 2014.

 

Things could soon get a bit rocky, though. Both management and analysts are projecting a significant downshift in performance this year — about a 4% drop in revenues and 29% decline in earnings — because Intuit is transitioning from a licensing fee-based structure to a subscription model. Initially, this is expected to cause a sharp decline in large up-front licensing fees which, in turn, will be a drag on sales and profits.

 

But not for too long. The transition should be completed by year end, and management projects a return to double-digit top- and bottom-line growth in 2016.

 

Risks To Consider: Intuit caused itself unnecessary public embarrassment recently when it announced changes to its desktop tax return software that would force about one million users to buy more expensive versions this year. Although the firm quickly made multiple apologies, pledged to reverse the changes next year and offered compensation for the added cost this year, it may have permanently lost some loyal customers to H&R Block, Inc. (NYSE: HRB) and other competitors.

 

Action To Take –> Although unfortunate, Intuit’s PR nightmare isn’t fatal. While some customers may switch to competitors, the incident will likely blow over and the number of defectors probably won’t be large enough to put much of a dent in Intuit’s massive share of the DIY tax return market.

 

What’s more likely: Intuit will keep dominating in tax returns and profit handily from the massive shift toward self-employment.

 

With steadily growing earnings, and a constant price-to-earnings (P/E) ratio, I look for this stock to more than double over the next five years.

 

Sometimes the little ideas are the big game changers — something like a shift to contract employees. My colleague Andy Obermueller devotes his time to identifying game-changing trends and the companies that should benefit from this. This has led readers to investments that went on to gain triple-digits. He recently compiled a list of what he believes are the next great trends called “The Hottest Investment Opportunities For 2015.” For more information on the game-changing idea that could move the markets and change the world, click here.