200-plus money managers pay thousands to see which stocks are on Jim Osman's buy list. He details 2 he sees doubling, and one that has at least 50% left to soar.

  • When Jim Osman — the founder of The Edge Group — is searching for his next big-winning stock, he keeps quality, catalysts, and growth at the forefront of his attention.
  • Today, Osman's three stock picks are underpinned by a proven "back to the future"-type mindset that he details below. 
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"Growth is the new value investing."

That's what Jim Osman, the founder of The Edge Group, said when asked how he's dissecting today's prevailing market landscape. 

"I'm a value investor at heart, but it just is dead," he said. "And it just hasn't worked for years."

He continued: "Any savvy investor is not going to sing the same narrative."

When the market tides shift, so does Osman. That's why he's putting the crosshairs on companies that are focusing on what counts: technology and change. 

Osman notes that astute investors have been rewarded for putting technology and special situations at the forefront of their methodology this year. And he expects that trend to continue.

But just because Osman has technology at the forefront of his focus, doesn't mean he's ready to blindly scoop up shares of high-flying, richly-valued companies — Etsy, Peloton, and DocuSign are a few that he mentions — that have had huge run-ups. His approach is more subtle.

He uses the phrase "back to the future" as a succinct descriptor of his thinking. Put differently, Osman's on the lookout for companies incorporating an element of new technology into their business that the market hasn't appropriately accounted for. And that's leading him to believe a rally in price is on the doorstep.

In Osman's mind, these back-to-the-future-esque stocks are leveraging their past to create a fruitful future. For his 200-plus clients who have a total of $400 billion under management and each pay a minimum of $1,000 a month for his research, that's good news.

Here's what he found. 

1. Harley Davidson (HOG) 

When it comes to Harley Davidson, Osman's bullishness boils down to a few key facets.

  • "The Rewire" turnaround initiative, designed to cut company's costs and improve operations
  • A new CEO who's buying swaths of stock and is known for turning around disparaged companies 
  • A newfound focus on digital marketing
  • An appeal to a younger audience via electric bikes and customizable, personalized accessories 

"We believe it could be a double back to the $60 highs," he said. "We see a catalyst with the restructuring, and we also see a CEO getting involved in being part of the turnaround by buying shares."

2. Siemens Energy (ENR GR)

"Siemens is one where it recently, three weeks ago, announced the separation of its gas and power segment," he said. "And what's interesting about this is, there's this big move to renewables."

Osman says that the separation of these businesses is mutually beneficial, and should allow both entities to focus more keenly on operations and development. What's more, Osman notes a massive order backlog that should provide a continuous stream of cash flows for the years ahead.

"Global energy markets are seeing strategic overhauls, and due to the increased awareness and the negative implications of climate change, there is an increase in demand for methodically changing power generation toward low-carbon energy sources," he said. "Therefore, there is a strong demand for global players like SGRE who design, develop, manufacture, and install wind turbines for various wind conditions, both onshore and offshore."

At a minimum, in the next one to three years, Osman expects the stock to double.

3. Verint Systems (VRNT) 

Last, but certainly not least, Osman notes another spinoff situation that should unlock hidden shareholder value.

"The Spinoff is intended to be tax-free to shareholders and will see the Parent retain its Customer Engagement Solutions segment, while the Spinoff will consist of the Cyber Intelligence Solutions business (accounting for approximately 35% of total FY20 revenues)," he said. "Post Spinoff, the Parent (VRNT, ex-Spin), likely to fill the huge valuation gap of more than 55% (presently valued at EV/Revenue of 3.4x Vs. peer average 7.7x on FY22E)."

Osman says this separation should propel the stock "another 50% at least" from current levels, and allow both companies to focus further on their distinct operations.

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