During a five-minute lull in my weekend activities, I picked up the latest issue of Inc. Magazine and couldn’t help but notice a headline on the cover touting the “best businesses to start now.”

Although the magazine is primarily for entrepreneurs, not investors, I immediately flipped to page 34 to read the article. Why?

Because if now is a good time to start and own a particular business, it must be a good time to invest in such a business, too.

[ad#Google Adsense 336×280-IA]With that in mind, I whittled the Inc.’s list of four sectors down to the two most compelling.

And over the next two days, I’m going to reveal why and how you should position your portfolio to profit from them.

So let’s get to it…

Bet Big on Mobile and Social Gamers

Longtime readers are probably tired of my relentless emphasis of the enormity of the mobile revolution. But they can deal.

As I said again on May 25, “The exploding use of mobile devices promises to be the fastest-growing, and possibly biggest, technological trend ever.”

As such, it’s literally creating new multi-billion-dollar sectors out of thin air. And mobile and social gaming happens to be one of the fastest growing…

There are already 101 million mobile gamers in the United States. And they’re not out for cheap (or free) thrills, either.

As Inc.’s John McDermott writes, “This industry, which barely existed five years ago, is expected to generate about $4.5 billion in sales [in 2012].”

What’s more, over the next five years, the industry is expected to balloon to $16 billion, according to ABI Research.

I’d say that going from $0 to $16 billion in a decade qualifies as fast growth, wouldn’t you? So what’s the best way to play it?

Well, the obvious and popular choice is social gaming juggernaut, Zynga (Nasdaq:ZNGA). But it’s the wrong choice.

Sure, it boasts the most sales from social gaming ($1.14 billion in 2011). However, Zynga relies almost entirely on Facebook (Nasdaq: FB) to generate revenue. (In the last quarter, Facebook accounted for 92% of Zynga’s sales.)

In other words, as Facebook goes, so goes Zynga. And as you’re well aware, I don’t have very high expectations for Facebook (see here).

Instead, I recommend playing the mobile and social gaming boom via Glu Mobile (Nasdaq: GLUU).

The $275 million market cap company is a leading developer of games for smartphone and tablet devices. Unlike Zynga, its games can be played on a wide range of platforms, including iOS, Android, Windows Phone, Google Chrome and Mac OS X.

Don’t let Glu’s small market cap fool you, though. It’s hardly a newcomer. The company’s been developing games for a solid decade. And it continues to land deals with technology heavyweights, including chip giant, NVIDIA Corp. (Nasdaq:NVDA).

There’s no denying that the company’s operating in the sweet spot of the sector for growth, either. In the last quarter, sales for its games on smartphones increased 192% year-over-year to $17.4 million.

Management also raised guidance, a clear sign of stronger growth to come.

No debt, sizable insider interest (21.3% of outstanding shares) and the potential for a takeover following Electronic Arts’ (Nasdaq: EA) $750 million purchase of PopCap Games last year, round out the investment case.

Bottom line: If now is high time to be an entrepreneur in the mobile and social gaming sector, it stands to reason that it’s high time to be an investor in the sector, too. In my opinion, Glu Mobile represents a compelling bet.

And don’t forget that tomorrow I’ll be sharing another high-growth sector poised for big profits. I’ll also reveal an under-the-radar way to invest in it for maximum gains. It’s a company with a truly game-changing technology destined to become a household name on Wall Street. So keep an eye on your inbox.

Ahead of the tape,

Louis Basenese

[ad#jack p.s.]

Source: Wall Street Daily