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Well, Google hit another all-time high this week, up more than 800% from its IPO less than 10 years ago. That’s the sort of stuff investors dream about. 

What has made Google so successful? Well, in the early days, it just did something better. It had a big advantage. Its Internet search algorithm was key. It was faster and more accurate than the other search engines at the time, who have faded into oblivion. Then, Google was smart enough to utilize and exploit its market share, and go off in several different directions, making billions in the process.

As an investor, of course, you should always be on the look out for the next greatest thing, that company that has an advantage, a new angle, a new approach, a better mousetrap. Finding one of these names is your ticket to investment riches, if you hang on long enough.

Alas, though, these types of companies are exceptionally hard to find. Many companies tout the fact that they have an edge, and can suck in lots of investors, but a disappointing few ever live up to their early promises. Let’s take a look at several companies that had an advantage, or claimed to have an advantage, or may still have one (or at least investors are believing they have one).

Smart Technologies (SMA, TSX), went public in 2010 in a flurry of fanfare at US$17 per share. Its “revolutionary” interactive whiteboards were going to change the future of education forever. Its technology is actually pretty cool; my kids use it in their classrooms. However, investors forgot that educational boards are sticklers with money, and the company has never quite lived up to its sales and profit expectations. Its last quarter showed a big decline in sales, not exactly a ‘Google-type” performance. Shares are now $1.40.

Zenyatta Ventures (ZEN on TSX-V). Zenyatta has certainly attracted attention. Its one-year stock return is now above 1,000%. According to company press releases, Zenyatta’s graphite (from the James Bay region) has achieved ‘ultra-high’ purity levels that are ‘truly remarkable’, and its vein-type graphite deposit appears to ‘be one of a kind globally in both size and quality’. Of note, ultra-high purity graphite can sell for up to $30,000 per tonne. Zenyatta continues to test samples at its 100%-owned property. It all sounds exciting, but is still really early in the development of the company. On a market cap of $67 million, it has to be considered very risky still.

Orbite Aluminae Inc. (ORT, TSX) is next up. Its ‘unique patented technology’ is a ‘breakthrough alternative solution’ to make high-purity alumina, and it aims to ‘capture 20% of the world market for high-purity alumina’. Orbite shares were cease-traded for six weeks early last year while regulators questioned its preliminary economic assessment technical report. Last week its stock was subject to a harsh decline that prompted a ‘nothing to report’ press release. This one is not for the faint of heart, and we would say the jury is still out on it.

Looking for the next greatest thing is fraught with risks, because even the slight appearance of potential greatness causes stock prices to soar. Remember Timminco? It had a revolutionary process for metallurgical poly silicon. Its stock soared from pennies to $35; it is now bankrupt, and it still gives me nightmares years later. BioExx Specialty Proteins (BXI on TSX) is another that captured great attention a few years ago, soaring close to $3 per share in 2010. Now, it is $0.09 per share and trying to conserve its cash.

Still, it just takes one stock to change your portfolio forever. We sincerely doubt one of the stocks mentioned above is going to be the next Google, so we will have to keep looking.

Peter Hodson, CFA