Unless you buy right after a crash, you’ll likely have to wait years – or even a decade – to make 100% or more on an investment.

That’s OK, for the majority of your money. Building a fortune takes time… And folks who offer you ways to get rich quick are likely trying to get rich quick themselves, at your expense.

But you can safely boost your returns with the occasional, out-of-the-park home run.

Your profits on a stock that returns hundreds of percent could pay for a summer vacation… a new car… or maybe even a new house.

So we’re going to show you one of the best ways to identify businesses with massive growth potential… and stocks that can triple your money or more.

Today, we’ll take you through our three-step process for zeroing in on these investments. And tomorrow, we’ll show you some examples of this powerful strategy in action.

Let’s get started…

Our three-step process starts with a game-changing industry trend…

Think about the products, technologies, or services that make life more convenient and enjoyable. The more people that use them, the better.

The growing trends of today will likely morph into the trends of the future…

To see how this works, think about smartphones. When Apple (AAPL) introduced the iPhone in 2007, few people understood the impact it would have. But you didn’t need to understand it to know that it was growing in popularity. And if you used one back then, you likely had a sense that the game had changed.

The number of businesses that boomed – and are booming – on the back of this single, transformative technology is immense. And folks who invested in the trend have had dozens of opportunities to make incredible profits.

Once you come up with a game-changing industry trend, look for small- to medium-sized, rapidly growing businesses that take part in or support the trend.

Small businesses often have advantages over larger competitors. For one thing, it’s easier for smaller businesses to grow rapidly…

For example, let’s say you are considering Company X and Company Y for a potential investment. Company X is a $5 billion company that earns $1 billion in annual sales. Company Y is a $50 billion company that earns $5 billion in annual sales. Both companies are in the widget business, which has a total size of $100 billion.

Company X could double in size – to $10 billion – by taking market share from its competitors. But Company Y would have to take over the entire market to double its size. That’s a lot less likely.

Stocks that rocket higher often do so because of fantastic growth. That’s why you want to look for the smaller players in a big trend.

As a guideline, look for companies that have a market value of no more than $10 billion. And they should be growing their sales and/or earnings by at least 20% per year, on average, for at least two years.

Lastly, it’s important to only buy companies that are in a strong financial position. These companies have staying power, even if they hit speed bumps along the way.

Specifically, you want to find a business that has more cash than debt (or ideally, a company with no debt).

It’s common for small companies to use debt to expand their businesses. But when the company uses an excessive amount of debt – far more than its cash on hand – small troubles quickly turn into big troubles.

If the industry or overall market turns lower, debt and interest payments don’t disappear. But less money may be coming in. This can lead smaller, less-established businesses with too much debt to go bankrupt. If they have enough cash, though, they can weather the storm.

Even without an industry or market downturn, large interest payments drain cash that businesses need to operate. That’s why it’s important to find companies with more cash than debt.

This rule will eliminate most of the firms you consider… But it will leave you with the best potential investments.

To recap, look for game-changing industry trends… smaller, rapidly growing businesses that participate in these trends… and companies that are in a strong financial position. This three-step process will give you a great shot at finding your next big winner.

Tomorrow, we’ll show you some examples of how this strategy has worked in action. Until then…

Good investing,

Ben Morris and Drew McConnell

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Source: Daily Wealth