Investing in industry leaders tends to work well for investors over time. But in any industry, upstart companies may work to build themselves up into a leader over time. Finding those growth plays can lead to great investment opportunities.
That’s true for sectors that have a low barrier for entry, and where a competitor has the ability to create some big differentiation. These companies can likely see years of growth as they compete to become the industry’s largest.
One potential example is Casey’s General Stores (CASY). The convenience store chain is the third-largest. And they’re continuing to expand.
What’s most enticing about the chain is the popularity of its pizza offerings. Casey’s is the fifth-largest pizza chain, and as a convenience store play, it doesn’t have to worry about delivery.
This unique edge and ongoing growth could make shares a winner.
Action to take: Shares are fairly valued at 22 times earnings. But earning growth is rising 15 percent annually, a strong level for the convenience store space. Casey’s also pays a 0.6 percent dividend, and has a history of increasing that payout over time.
For traders, shares are in a long-term uptrend. The May $300 calls, last going for about $9.60, could see mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.