You don’t become an investing heavyweight by picking the same stocks as everyone else.
To truly rise to the top of the field, you have to find some hidden gems. And it’s even better when those sleeper picks possess the type of latent growth potential that could explode further down the line.
Baillie Gifford— a 110-year-old Scottish investment firm that manages $255 billion — knows this as well as anyone. That’s why it’s so focused on becoming an early investor in companies it sees as having massive upside.
This may seem like an obvious objective, but actually doing it is extremely difficult. That’s why it’s so impressive that Baillie Gifford got in early on many of the stock market’s most dominant names, including Facebook, Alphabet, Netflix, and Alibaba.
There’s also Tesla, the holding for which Baillie Gifford is perhaps best known, since it owns one of the biggest chunks of any institutional investor.
But those are all — for the most part — well-known, name-brand companies. What about the high-upside stocks that fly under the radar, unknown to most?
Don’t worry; Baillie Gifford has you covered. In an exclusive interview with Business Insider, Tom Slater — the firm’s head of US equities who comanages its flagship fund— reveals two sleeper stock picks Baillie Gifford loves.
All quotes below are attributable to Slater, while the descriptions were pulled from company websites.
“It’s a demand-side platform for buying advertising. The premise is that, at some point in the future, all buying of advertising is going to be programmatic. It’s just the economic reality. At the moment, some elements of online base advertising are programmatic, but there are huge swaths of the advertising market that aren’t.”
“These guys have been making real progress in terms of aggregating demand for advertising outside the walled gardens of the internet. It looks increasingly likely that internet-connected television is going to go down this route as well. It won’t follow the traditional deals that were done in the cable industry. That’s a potentially huge market that’s just opening up for them.”
“It’s a Chinese online retail business. The interest in it is, it’s a sort of group shopping premise. The idea is — if I want to buy something through the platform, if I can convince 25 of my friends or neighbors to buy the same product, we’ll all get it for a more attractive price.”
“This is a product aimed at getting the next half a billion Chinese people online. These are people who live in villages and very low-tier cities in China that aren’t shopping on Alibaba, and aren’t familiar with how to use these tools. Having some of these experiences for the first time, doing something with people you’re familiar with, all in search of an attractive price, there’s a real safety-in-numbers effect.”
“It’s the retail that could touch half-a-billion people that you’ve never heard of.”