Gaze Into the Crystal Ball

 | Jan 16, 2013 | 10:00 AM EST
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As I did a year ago, I happen to be attending an investor conference that's highlighting a number of interesting private companies. Of course, privates are not actionable today, but the best way to figure out what is coming down the pike -- both in the economy in general and as a public stock investor -- is to listen to presentations by private companies. Not only can you learn about new trends in technology, medical devices or consumer products, you can sometimes get good intelligence from comparisons to your public-stock holdings.

In the tradition of good investors who always scan far and wide to understand their world, here are a few companies that caught my attention.

Koko Fitness is leveraging the capabilities of high technology to improve personal health. The company has developed software that acts as a virtual trainer, designing, monitoring and adjusting a strength and cardio-based workout routine to improve lean muscle mass. (More lean muscle mass improves your metabolism, helping weight loss.)

The software is built into the exercise equipment manufactured by the company. Koko Fitness jump-started the business by franchising health clubs called Koko Fitclubs, but future growth will be in company-owned units and atypical locations such as corporate gyms and hotels. The company is five years old, and it grew from just five units in 2009 to 130 in 2012 -- an impressive growth rate. The company envisions up to 2,000 units in the U.S. Unit economics are very attractive, with mature run rate revenue of around $380,000 and EBITDA margins around 35%.

Yurbuds is revolutionizing the earphone market for athletes by offering ergonomically designed earphones that will stay tightly but comfortably lodged in your ear despite motion, sweat ... you name it. The earphones are protected by patents, and the company is expanding its distribution rapidly. The earphones are now carried in more than 12,000 retail locations, including major chains such as Wal-Mart, Best Buy and even the Apple Store. Yurbuds did $24 million in revenue in 2012, up from $10 million in 2011, and it sees growth to near $50 million this year as distribution expands to 19,000 "doors" this year.

Home-Made Pizza is improving the category pioneered by Papa Murphy's, bringing a very high-quality product to the take-and-bake segment. Home-Made is still small, with only 23 units in the Chicago area, so there is significant room for growth. Take-and-bake meets that need for people who want something better than grocery store frozen pizza but aren't in the mood for the time and cost of going out. Papa Murphy established the market, but now the issue is premium product. Home-Made is pioneering this approach, and it could have room for years of growth in Chicago alone, never mind other geographies.

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