You’re likely hearing about how we’re entering a new era of labor productivity.
It’s been a hot topic of discussion among economists and investors. It’s one of the leading reasons the economy just might avoid a recession while inflation falls.
And it’s one of the stock market trends that drove indexes to a record high last Friday.
We all know productivity means doing more with less. On Wall Street, that translates to companies generating more output (revenue) with fewer inputs (costs).
In other words, making more profit without hiring a ton of people (and in some cases with fewer).
Saying those words to investors is like giving honey to a bear. It creates all kinds of warm and fuzzy feelings.
That drives stock prices higher. It’s beautiful ... if you’re invested in shares of companies benefiting from a productivity boom.
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A productivity boom led by technological innovation is why economist Ed Yardeni recently assigned a 60% probability (his base case) to a “Roaring 2020s” scenario for the economy.
In this scenario, investors do “very well,” according to Yardeni.
Bottom line: if you’re looking for one of the most powerful stock market trends right now, look no further than technologies that are helping to boost worker productivity.
Behind the Trend: How Today’s Biggest Companies Boost Productivity
One of the ways companies increase productivity and get more out of their workforce – not to mention the partners they work with – is by using technology to teach new skills.
This technology is often called a Learning Management System (LMS).
An LMS can be a win-win.
The organization does better. Workers position themselves to earn more money.
They also sleep better knowing they’re unlikely to get replaced by the robots and faceless AI programs tapping their stagnant co-workers on the shoulder.
The rub is that teaching new skills isn’t always that easy.
In addition to requiring some motivation and sticktoitiveness on the part of the learner, a good LMS requires pretty advanced underlying technology.
It needs to be continuously learning itself, without workers spending a ton of time feeding in information that soon becomes obsolete. Otherwise, it’s just teaching outdated content.
Basically, the same thing that’s in those discarded textbooks at the recycling center.
This is where technologies like artificial intelligence (AI) come in. AI is helping modern learning software capture organizational knowledge and turn it into new content and learning methods.
That’s helping to boost productivity in some of the biggest companies out there.
In short, if you’re interested in technologies helping to fuel productivity take a look at companies with cutting-edge Learning Management Systems.
My Favorite LMS Stock Right Now
We’re all familiar with Samsung, the massive South Korean conglomerate.
Not long ago the company wanted to give in-store salespeople a learning tool that would act like a social platform.
It had to work on mobile devices. The idea is that it would help them keep in touch, tap into current product information, and host learner-generated content.
Not mind-blowing stuff, but super helpful for customer-facing workers who need highly relevant and timely information on the products they’re selling.
The company implemented an LMS solution from a company I recently recommended to Cabot Small-Cap Confidential subscribers.
And Samsung isn’t alone. This company also counts massive companies Amazon Web Services, Thomson Reuters (TRI) and Zoom (ZM) as customers.
I just added this stock to our portfolio and it’s already showing gains. At a super high level, it sells enterprise software on a cloud subscription model – like Microsoft Office.
The company has a market cap under $2 billion, is growing revenue north of 20% and throws off a ton of cash relative to its size.
Moreover, I rarely see this stock in the media, despite impressive growth and achievements.
I think that’s about to change.
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