A Unique Hypergrowth Stock That Could Actually Soar if Interest Rates Keep Rising By Luke Lango and the InvestorPlace Research Staff Rapidly rising yields on the long-end of the Treasury curve are spooking markets… and killing hypergrowth stocks. But you have to ask yourself: Why are long-term yields rising? In part, because the economic outlook is improving, since the U.S. is presently administering over a million Covid-19 vaccinations per day, which lays the groundwork for a big economic reopening at some point later this year. In other words, rising rates are killing the stock market… but they're also indicative of the market's increased confidence that the world is going to revert back to "normal" in the foreseeable future. That's why rising rates aren't killing all stocks. Instead, stocks levered to a big economic reopening in 2021 have actually soared over the past two weeks. Ready to go back to indoor dining? Cheesecake Factory (CAKE) stock is up 20% over the past five days. Can't wait to travel again? Carnival (CCL) stock is up more than 15% over the past five days. Miss the movies? AMC (AMC) is up about 70% in the past five days. Does that mean it's time to buy "reopening stocks"? Maybe. But here's the problem with these trades: They are transitory. Cheesecake Factory, Carnival, AMC – these companies don't have great long-term growth outlooks. So, investors will buy them up big so long as reopening euphoria dominates sentiment. Then, they'll dump them, and the stocks will become dead money again. If only there were a long-term growth stock that was also levered to the reopening, and which could rally both while rates are rising today and once reopening euphoria fades tomorrow… There is! And it just so happens to be a hypergrowth small-cap stock that could soar 1,000%. In today's edition of The Daily 10X, we will tell you all about this unique stock… and show you why it may be one of the best stocks to buy today while rising rates are hurting most other hypergrowth stocks. The Unrivaled Leader in School Bus Electrification Ready for your kids to go back to school? According to the yield curve, that's going to happen very soon… because long-term yields are rising on increased optimism that the world will "reopen" smoothly and soon, which means your kids could be back in school in the not-too-distant future. There are a lot of economic implications as a result of children returning to school. Here's one of the biggest ones: An unprecedented wave of electric school bus orders. There are about 590,000 school buses in operation in the U.S. and Canada today, that collectively transport about 26 million kids to school on a daily basis. Most of these buses – over 99% – are built on either diesel, propane, or natural gas engines. Only 0.6% are electric. But U.S. President Joe Biden has made the fight against climate change one of his biggest mandates. As part of his climate action plan, Biden promises to electrify all of America's fleet vehicles – starting with, you guessed it, school buses. Specifically, Biden wants all 500,000 school buses in the U.S. to be electric school buses within the next five years. That means schools will have to collectively order about 498,000 electric school buses over the next five years. Of course, when schools aren't open, school districts don't order new buses. Schools aren't open right now. So, school districts aren't ordering all those electric buses. But if the yield curve is right, schools should reopen at some point in 2021. When they do, that's when all those electric bus orders will flow in… That implies a surge in business volume for a small, $700 million electric school bus manufacturer by the name of Blue Bird (BLBD). Blue Bird is not a new company. They've been around for the past few decades. During that time, the company has turned into the leading school bus maker in America, with over 150,000 buses in operation. Over the past decade, the company has consistently controlled about 35% of the U.S. school bus market. It's been a slow-and-steady business that has been consistently profitable, but nothing to write home about… Until now. Over the past few years, Blue Bird has developed an electric bus. Technologically, this electric bus isn't too different from other electric buses in the market. But Blue Bird – as a company that has been making school buses for decades – has: - A proven safety profile, which is big, because we are talking about vehicles that transport kids on a daily basis. Safety is number one here.
- An already established manufacturing capacity, which is also big, since school districts need to electrify hundreds of thousands of buses in just five years.
- An expansive network of school district partnerships, which means that Blue Bird doesn't have to spend much on marketing and can therefore reduce the selling prices of its buses.
Blue Bird has leveraged these unique advantages to turn into the number one electric bus maker in America. As stated earlier, the company controls about 35% of the overall U.S. school bus market. But in electric buses, Blue Bird commands 63% market share. Will that market share come down over the next few years? Maybe, as other bus makers develop electric solutions. Will it come down by that much? Probably not, because Blue Bird's safety, manufacturing, and partnership advantages are durable. To that end, we see Blue Bird maintaining its head-and-shoulders lead in electric buses over the next few years, as every school bus in America is forced to go electric, implying enormous growth potential for this small-cap company in the coming years… And it all starts right now – as yields rise and the U.S. economy inches to a big reopening. So, if you're looking for a unique hypergrowth stock that could still outperform even in the face of rising rates, you may want to consider taking a position in Blue Bird stock today… Small-cap stocks that can rise 10X over the long run are often volatile. If you are interested in this stock, buy it like a pro by setting strict limit prices. Learn more about how to use limit orders here. | Key Company Details | | Company Name | Blue Bird Corporation | | Ticker Symbol | BLBD | | Yesterday's Close | $26.49 | | Current Market Value | $718 Million | | Annual Revenue | $856 Million | | Catalyst | Electric Vehicle (EV) Megatrend |
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