1 Stock That Offers Explosive Potential Gains

The key to finding a stock that offers explosive potential gains is finding a company that has an enormous growth opportunity ahead and a highly profitable future. It can potentially help if it is highly doubted among the investment community. Up until the last couple months, audio streaming giant Spotify (NYSE: SPOT) fit this description perfectly.

Despite Spotify's leading market position, rapid growth, and huge addressable market, the investment community largely doubted the company's prospects, primarily because of its reliance on major music labels and its highly variable cost structure due to music royalty payments.

But Spotify was investing heavily in podcasting, which is intended to provide it with substantial advertising revenue. Since podcasting content is a fixed cost, much like producing Stranger Things is a fixed cost for Netflix, the incremental ad impressions Spotify sells are extremely profitable. With Spotify acquiring Bill Simmons' The Ringer, and reaching exclusive podcast deals with Joe Rogan's Joe Rogan Experience podcast, Kim Kardashian, and AT&T's DC Comics universe, investors are beginning to realize Spotify is likely to be far more profitable than previously thought.

Source Fool.com