These unique stocks can earn you big returns over the next four years

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Today’s issue in preview:

• These unique stocks can earn you big returns over the next four years

• Four stocks to invest in a booming industry

• This industry offers safe, large, and growing cash yields

• Learn our Top Themes to buy now

These unique stocks can earn you big returns over the next four years

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Want to generate outstanding returns over the next decade?

Buy stocks that will benefit from the Made in America megatrend.

Over the past year, we’ve made this big idea one of our core areas of focus and activity. Money & Megatrends readers in good standing are familiar with the bull case here…

President Donald Trump – along with many business and military leaders – believes that the U.S. has outsourced far too much of its industrial capacity to China over the past 25 years. We outsourced significant portions of our semiconductor, appliance, medicine, weapons, and machinery production. We outsourced the capacity to produce and process critical resources, such as rare earth elements.

The COVID-19 pandemic showed that depending on other countries for critical economic inputs makes the U.S. economy less safe and secure. To put it bluntly, it is very stupid to not make products critical to national security like AI semiconductors within our own borders.

Trump has staked his legacy and reputation on expanding our industrial base… and he’s working with business leaders to invest trillions to pursue this goal. Apple (AAPL), for example, has committed to invest $600 billion in U.S.-based manufacturing over the next four years. Nvidia (NVDA) says it will invest $500 billion in U.S.-based manufacturing over the next four years.

We’ve capitalized on this “Made in America” megatrend with strong returns in robotics, factory automation, and machine component makers such as Cognex (CGNX), Ouster (OUST), and RBC Bearings (RBC). In yesterday’s issue, we added to our coverage of this trend by recommending industrial testing and certification giant UL Solutions (UL).

Today, we add to our list of Made in America beneficiaries by noting that every new AI data center, every addition to the electrical grid, every new factory, every new energy pipeline, and every new power plant consumes a large amount of welding services, welding equipment, and welding supplies. As you’ll see, this fact can be a great thing for your portfolio.

Welding isn’t a glamorous industry. There are no “rock star” CEOs in the welding business like Jensen Huang of Nvidia (NVDA). You’re not going to see any hyperbolic investment newsletter ads about welding stocks.

Welding may not be exciting, but it is a truly “mission critical” part of the American economic machine. If the American economy was a quilt, welds would be the stitches that hold it together.

For example…

In AI data centers, structural steel frames, cooling systems, piping, battery storage systems, and many HVAC components all involve extensive welding.

In electric power generation and transmission, steel transmission towers, substations, transformers, bus structures, steel poles, and many supporting structures are fabricated using welding. Pipelines carrying insulating oil or cooling fluids also require welded joints.

The factories that produce cars, appliances, machinery, semiconductors, and consumer products are built with welded structural steel, and the machinery inside them is often fabricated with welding.

If you’re bullish on American manufacturing, then almost by default you are bullish on the welding industry.

As luck would have it, investing in the leading U.S. welding firms is quite simple. There are just two large public firms that derive the bulk of their revenues from welding equipment, services, and supplies. They are:

ESAB Corp (ESAB) is a $5.4 billion manufacturer of welding and cutting equipment. Its products include welding machines, welding wire, plasma cutting systems, gas-control equipment, and robotic welding cells. About half of the company’s revenue comes from recurring sales of consumable products that customers must continually replace as they weld.

Lincoln Electric Holdings (LECO) is the $13.5 billion world leader of welding equipment and welding consumables. The company supplies manufacturers across industries including automotive, aerospace, shipbuilding, energy, construction, railroads, and heavy equipment. In addition to its welding machines, Lincoln generates significant recurring revenue from consumables such as welding wire, electrodes, and fluxes that customers purchase repeatedly. The company is also a leader in robotic welding and factory automation.

Knowledgeable investors will key in on the “recurring” revenue and “consumables” aspect of these businesses. These are wonderful things for shareholders.

Businesses that produce expensive, complex, and specialized equipment like welders, medical devices, diagnostics machines, jet engines, and industrial water pumps make money not only on initial product sales, they enjoy recurring, high-margin revenue for years into the future by selling specialized maintenance services, replacement parts, and consumable materials the machines constantly use up, burn up, and wear down.

This wonderful business model is often called the “razor and razor blade” model, since razor customers must continually buy “consumable” razor blades that get dulled after repeated use.

Owning such firms gets even better: After a customer buys an expensive, specialized machine, he is usually “locked in” or “married” to its manufacturer. You want to stick with the original manufacturer’s specialized parts and service plans. You don’t want to risk switching to a different firm in pursuit of saving a few bucks. For better or worse, you’re married to the manufacturer… often for 10+ years.

An investor in ESAB and LECO enjoys two powerful financial forces: The Made in America megatrend and the long-term profit-generating power of the “razor and razor blade” business model. We’re bullish on both.

Four stocks to invest in a booming industry

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As we expected, the biotech industry is in a bull market.

On August 18, 2025, I sent a research note to colleagues outlining my bullish view of the biotech sector’s price action. Since then, I’ve written more than a dozen updates on the biotech bull market, as the S&P Biotech ETF (XBI) has outpaced the S&P by an incredible 82% to 17.5%. Over the past month, XBI has surged 25% to reach a new one-year high.

With the biotech industry doing so well, now is a good time to know what the Baker brothers are buying.

Baker Bros. Advisors is one of the world’s most successful biotechnology and life science investment firms. It is managed by brothers Felix and Julian Baker. It’s known for doing thorough research, long-term thinking, and making big, aggressive bets on companies it has high conviction in. For a biotech or health care firm, having Baker Bros. on your shareholder roster is a powerful seal of approval.

Large money management firms like Baker Bros. must report their public-market positions to government regulators via “13F filings.” Those filings are made every quarter and are public. 13F filings essentially allow you to look over the shoulder of investors like Baker Bros., which is often useful for spotting trends and good stock ideas.

I promise you that whatever you spend annually on investment research, Baker Bros. spends a lot, lot more. For every stock they buy, it’s very likely that they know the science inside and out. They’ve very likely turned over every stone. Reviewing their new buys is like having a world-class research team working for you for free.

With all this in mind, we researched the firm’s recent stock buys and found four compelling stocks in the biotech/health care industry that have highly compelling long-term outlooks:

Grail (GRAL) is a $3 billion company that is attempting to revolutionize cancer screening through Galleri. It is a blood test that screens for 50+ cancer types before symptoms appear. Multi-cancer early detection is potentially one of the most transformative ideas in modern medicine. If Galleri becomes the standard of care, the addressable market essentially becomes every adult over the age of 40.

Mirum (MIRM) is an $8 billion company specializing in medicines for rare liver diseases and metabolic disorders. Unlike a lot of biotech firms, MIRM already generates real revenue through liver disease treatments, which gives it some stability that clinical stage biotechs do not have. The big upside with MIRM sits with liver disease treatment Volixibat in Phase 3, and hepatitis treatment Brelovitug, which is expected to produce results in the next 12-18 months.

Generate Biomedicines (GENB) is a $2 billion clinical stage “generative biology” company using AI and machine learning to design protein therapeutics. Its pipeline spans clinical and preclinical programs across disease areas and protein modalities, including respiratory disease work such as severe asthma and COPD.

Compass Pathways (CMPS) is a $1.8 billion psychedelic medicine biotech firm. It’s developing COMP360 which is a treatment for treatment-resistant depression (TRD). TRD affects millions of people globally so CMPS having positive Phase 3 data is giving them the potential opportunity to be a first mover in a huge market. The risk is that the FDA has never approved a psychedelic treatment, so the regulatory pathways remain uncertain, as does insurance coverage.

Baker Bros. has spent decades doing deep research and identifying winning biotech investments before the broader market catches on. The four firms above are pursuing different markets but all share the common thread of being backed by one of the smartest, most connected, most informed investment groups in health care. In a biotech bull market, this is valuable information.

This industry offers safe, large, and growing cash yields

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Over the past month, investors have had plenty of volatile situations and markets to keep track of. The Iran War changes from hot to cold almost every day. AI stocks have staged giant swings up and down. Bitcoin has plunged to new one-year lows, threatening Michael Saylor’s widely followed Strategy (MSTR) firm.

Meanwhile, America’s oil and gas pipeline network quietly goes about its business… transporting “liquid gold” and natural gas… powering our economy… and generating steady cash flows.

I again remind you that this is one of the world’s great and lucrative – yet “under the radar” – financial trends.

Avid M&M readers are familiar with our longstanding take on oil and gas pipelines. In early 2024, I saw the industry as the best way to generate substantial passive income from the AI boom. We’ve written over a dozen M&M updates about this trend.

Given AI’s enormous promise, big tech firms Meta (META), Google (GOOG), Amazon (AMZN), OpenAI, and Microsoft (MSFT) are racing to build the world’s best AI models and infrastructure. They’ve already spent more than a trillion dollars. This year, they are on pace to spend over $700 billion on AI infrastructure, with more than $3 trillion expected to follow.

All that AI infrastructure is poised to consume vast amounts of electricity. S&P Global estimates that global electricity demand will increase by nearly 50% by 2040.

I’ve frequently mentioned that AI’s growing power demands are a bullish driver for natural gas, as it is the preferred clean-burning fuel for power plants that support AI data centers. This is why I believe natural gas producers such as EQT (EQT), Antero Resources (AR), Expand Energy Corp. (EXE), and Range Resources (RRC) are compelling long-term stock ideas.

However, all the natural gas in the world isn’t worth much if you can’t transport it to customers.

This is where America’s vast natural gas transportation, processing, and storage industry comes in. An extensive network of pipes crisscrosses America to allow energy companies to transport natural gas from the wellhead to the power plant. If we get an AI-driven boom in natural gas consumption, we get a boom in natural gas transportation by default.

This year, the market has enthusiastically supported our thesis. Blue chip pipeline operators Enterprise Products (EPD) and Kinder Morgan (KMI) have both returned 21% this year. Fellow blue chip operator Energy Transfer (ET) has returned 24%.

These individual stock gains have driven the pipeline operator-focused Alerian MLP ETF (AMLP) to a 17.4% year-to-date gain. Despite AMLP’s big run and shares being near all-time highs, it still yields around 7.5%.

The typical pipeline operator is not your conventional “high-risk, high-reward” AI play. Instead, it’s a boring, predictable business that generates steady cash flows and shareholder distributions.

But the AI megatrend is giving natural gas a boost that will last for years. Plus, the Iran War and its constriction of Middle Eastern energy flows have made U.S. natural gas exports increasingly more valuable to customers in Europe and Asia.

In other words, two megatrends are converging to create a highly favorable environment for U.S. pipeline operators… one that should allow them to continue generating steady income for years. Generating stable cash flows by transporting oil and gas isn’t as exciting as some high-tech industries, it just works… and business is booming.

Market Notes

• Our recommendation to own Agent Supernova beneficiary Cloudflare (NET) is paying off. The stock reached a new all-time high this week.

• Billboard advertising giant Lamar Advertising (LAMR) reached a new all-time high today. This is a very bullish economic signal.

• Our recommendation to get long the biotechnology uptrend continues to be a huge winner. The S&P Biotech ETF (XBI) reached a new all-time high today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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