Tom Yeung here with your Sunday Digest.
Last fall, InvestorPlace Senior Analyst Eric Fry made the call:
It was time to sell… sell… sell the first wave of AI stocks.
In Fry’s Investment Report, his flagship stock-picking service, that meant getting out of:
- Oracle Corp. (ORCL) for a 27% gain
- Advanced Micro Devices Inc. (AMD) for a 110% gain
And in Leverage, his options trading service, that meant taking partial or remaining gains on:
- Coupang Inc. (CPNG) calls for a 100% gain
- Teradyne Inc. (TER) calls for a 600% gain
- Corning Inc. (GLW) calls for a 1,000% gain
The timing was spot-on. Since then, we’ve seen shares of hundreds of AI-related stocks get crushed. Companies that were once considered AI leaders, like Salesforce Inc. (CRM) and Intuit Inc. (INTU), are down roughly a third. Even the mighty AMD and ORCL have seen their valuations fall back to Earth as the early bottlenecks of the AI Revolution come unstuck. Oracle now trades at half of its peak prices.
Oracle stock
At its core, the former gatekeepers of AI technologies are quickly seeing their dominance vanish… some from supply chains catching up, and others due to AI itself. If two CNBC reporters could use AI to build a clone of project management firm Monday.com Ltd. (MNDY), what’s stopping all of us from replacing other software firms? Building new database management software? Designing new chip architectures?
That’s triggered a mad rush into “HALO” stocks, short for high assets, low obsolescence companies.
Railways… utilities… miners… not to mention oil and gas stocks.
Now, I must emphasize that most of these HALO picks will underperform over the long term. They’re mostly low-returning, zero-growth companies that offer little beyond quarterly dividends. They’re supposed to be dull… which means their returns are too.
But here’s the thing: Eric has spent decades identifying these exact types of future-proof companies that trade at enormous discounts… and then rise 100%… 500%… 1,000% or more. Many are exotic companies that trade across the globe, hiding beyond Wall Street’s sights. I know the concept might give you pause. Who wants to own the over-the-counter stocks of an Australian gold company or a South African platinum miner?
Well, Eric’s subscribers were certainly happy when he recently sold those Westgold Resources Ltd. (WGXRF) sharesfor 1,014% gains and Impala Platinum Holdings Ltd. (IMPUY) shares for 310% profits.
And on Wednesday at 1 p.m. ET, Eric will expand on this idea in a free online presentation he’s calling FutureProof 2026.
In it, he will outline how a new wave of overlooked companies will replace the first wave of AI darlings… and how they will help protect your portfolio from what an AI-powered future might bring.
You can click here to reserve your seat.
Now, allow me to illustrate how simple these investment ideas can be with two prime examples…
The Second-Order Fertilizer Winner
The Middle East isn’t just an energy hub… it’s a major supplier of nitrogen-based fertilizers too.
In fact, the Persian Gulf region produces so much of these nutrients that it’s responsible for up to 40% of all global exports – making it even more dominant in nitrogen-based fertilizers than in oil and gas.
Conflict in the Middle East has since sent prices of nitrogen-based fertilizers skyrocketing. Urea prices are up around 55% from the start of the year and will likely keep climbing as the spring planting season gets underway.
The most direct beneficiaries have already seen the news reflected in share prices. CF Industries Holdings Inc. (CF) has surged more than 45% since the start of the year, while Nutrien Ltd. (NTR) is up 20%. These American companies are major nitrogen-based fertilizer makers and compete most directly with Middle Eastern imports.
However, one fertilizer company has only started to rally:
The Mosaic Co. (MOS).
This Tampa-based firm is North America’s largest producer of potassium- and phosphorous-based fertilizers potash and phosphate. In fact, it produces roughly 12% and 10% of the global output of these two nutrients.
Now, these two fertilizers are not nitrogen-based, like the types the Gulf states export. So, the stock has barely risen since January.
Think of fertilizers like a three-legged stool. Each type represents a different leg, and you need all three to produce a stable crop. It’s why you’ll often see the “N-P-K” (nitrogen-phosphate-potassium) acronym on fertilizer bottles, and why fertilizing a lawn without soil testing first is a recipe for disaster.
In theory, these three nutrients are not interchangeable.
However, different crops need different amounts of N-P-K. Corn requires more nitrogen, while soybeans rely on far less. So, high prices for one type of nutrient can often cause shifts in what farmers plant.
That’s why shares of Mosaic should rise from current levels. Farmers are very sensitive to price inputs, and rising nitrogen fertilizer prices will trigger a stampede into crops like soybeans. One researcher at the University of Arkansas’ System Division of Agriculture is already predicting 3.5 million acres of soybeans this year – a level not seen since 2017. (Soy uses far more potash than corn.)
We’re also fast approaching the start of the U.S. planting season. So, even if nitrogen-based fertilizers are allowed past the Hormuz Strait within the next several weeks, many American farmers will have already locked in their potash and phosphate demand for the whole year.
Most importantly, Mosaic is a perfect example of a future-proof company hiding in plain sight.
Few people besides farmers think about potash or who makes it. Even fewer previously considered how AI-resistant fertilizer companies are. Yet vertically integrated fertilizer makers will be almost impossible for AI to replace. Companies must mine minerals out of the ground, process them, and then sell them through international distribution networks. And no matter how smart AI gets, we all still need to eat.
MOS likely has a 2X upside from here.
Future-Proofing Your Liquor Cabinet
The second pick is an Australian company that, like single malt whiskeys, only gets better with time.
I mean this in the literal sense.
Lark Distilling Co. (LRK.AX) is a Tasmania-based spirits firm that specializes in high-end libations. Its flagship blended malt whisky, the Symphony No. 1, has won “Australia’s Best” at the World Whiskies Awards for four consecutive years. Meanwhile, its single malts, like the $200 Classic Cask, are highly rated and routinely earn gold medals at international competitions.
Shares trade on the Australian Securities Exchange, out of Wall Street’s sights.
Now, there are three things to know about Lark.
The first is its recent history. The company overexpanded in the years leading up to the Covid-19 pandemic and overestimated demand from China. Revenues fell by a third between 2022 and 2024 after post-pandemic spending began to dry up. That sent shares from a high of 5.44 Australian dollars to below 1.00 AUD, where it continues to trade today. Lark’s CEO also resigned during this period after a shocking video showed him using illicit drugs. That left the firm leaderless for over a year during this crucial time.
The second is its turnaround. In 2023, Sash Sharma took over as CEO, and the business began to stabilize under him and a new chief financial officer. The company expanded its retail footprint at Australian airports, onboarded new export partners, added distributor partnerships across Asia, and consolidated its production to a single site. The company reported a 2% sales growth in fiscal 2025 and is on track to notch an 8% growth rate this year. Analysts expect growth to accelerate to 28% next year as new distribution channels come online.
The third is valuation. Like most firms, Lark records the value of its inventories at cost (or net realizable value if that’s lower). But unlike everyone else, Lark’s inventories become more valuable with time. All else equal, a 15-year single-malt is worth more than a 10-year version, and so on.
Allow me to do some math. Currently, Lark has 2.5 million liters of whiskey under maturation in its whiskey bank, with a balance sheet value of AUD$57.2 million at cost. Once you add cash, equipment, and receivables, and then deduct debt and depreciation, Lark is worth a tangible book value of roughly AUD$8 million at cost.
Here’s where a mismatch exists. At today’s stock prices, Lark Distilling’s market capitalization is just AUD$74 million, which is less than the AUD$84 million I just mentioned. So, you’re buying a company for a double-digit discount to tangible assets.
Even better, we know that Lark’s whiskey bank is worth more than AUD$57.2 million. (To give you a sense, that’s just $8 per 500-milliliter bottle.) The company sells its 500ml single-malt bottles for at least $200, so inventory values are a magnitude higher than what’s on the books.
That makes Lark a potential 4X company if it’s bought out, or a 10-bagger if it manages to complete its turnaround and regain profitability. Until AI figures out how to age whiskeys faster than Mother Nature can, Lark will remain a relatively future-proof company with plenty of hidden “liquid” assets.
Looking Further Afield
International markets sometimes offer strangely incredible deals. Over a thousand companies outside America trade at negative enterprise value, meaning they could theoretically buy back every share and still have money left over for shareholders.
In fairness, many of these picks will end up going nowhere. International and frontier markets can be notoriously difficult to navigate, and companies in these markets are often horrendously managed. Even Lark Distilling may fail to turn its multimillion-dollar whiskey bank into a profitable business.
But some will turn small stakes into minor fortunes.
That’s why I encourage you to sign up for Eric’s FutureProof 2026 event, scheduled for next Wednesday, March 18, at 1 p.m. ET. During that free broadcast, he will outline exactly what early AI investors got right… how they earned their millions… and what the next wave of investors should be looking at right now.
Eric will also share the names and tickers of 15 companies already beginning to benefit from AI’s emerging bottlenecks. If history is any guide, the next Nvidia-style winner may come from the companies solving AI’s newest constraints.
Reserve your spot here.
Until next week,
Thomas Yeung, CFA
Market Analyst, InvestorPlace
