If you ask an investor to define their version of Nirvana, my guess is the response would include something along the lines of "finding the next 10-fold winner".
That's because every long-term investor is assumedly in the market to make money, and rightly so, because what's not to love about picking the next a2 Milk Company Ltd (Australia) (ASX: A2M) or Bellamy's Australia Ltd (ASX: BAL) before it becomes a 'ten-bagger'.
Finding the next big winner can be difficult, given investors have a choice from 2,164 companies on the ASX alone. However, the signs of greatness can be clear from the outset, and I believe I might just have found the next market darling.
Can you guess the stock?
The company I've selected has a proven history of year-on-year profit growth averaging a compound annual growth rate (CAGR) of over 25% since listing in 2006. Management has consistently increased dividends for the last 10 years and announced a robust international expansion strategy to drive growth.
On the back of a recent acquisition, I believe this star stock is poised for another great year ahead.
Have you figured out which one I'm talking about?
(I'll give you a hint – it's not a resource company like BHP Billiton Limited (ASX: BHP) or an Australian bank – meaning you can rule out Commonwealth Bank of Australia (ASX: CBA) immediately).
Clue # 1
The stock I'm thinking of is not an everyday name (just yet). Investors that have followed this company will recognise its brands from a mile away, but to the uninitiated eye, the company is not as ubiquitous as Medibank Private Ltd (ASX: MPL), or Woolworths Limited (ASX: WOW).
In fact, the company doesn't even feature in the S&P/ASX 100 Index (ASX: XTO), which means it's smaller than Australia's 100th largest company (valued at $1.7 billion) in Sirtex Medical Limited (ASX: SRX).
Clue # 2
The company has a vertically integrated operating model like Flight Centre Travel Group Limited (ASX: FLT), and is capital light like Cover-More Group Ltd (ASX: CVO) and Mantra Group Ltd (ASX: MTR).
However, its business has nothing to do with travel and tourism which takes Ardent Leisure Group (ASX: AAD), Corporate Travel Management Ltd (ASX: CTD) and Webjet Limited (ASX: WEB) out of the mix.
Clue # 3
Here's a big clue. The stock I have in mind is in the food retail industry, serving pizza and coffee by the truckload.
Whilst you could be forgiven for thinking it is Domino's Pizza Enterprises Ltd (ASX: DMP), you'd be wrong because this stock trades on a much more humble price-earnings of 17x and offers a tasty growing yield of 4% (fully franked).
Foolish takeaway
In case you haven't guessed it yet, the stock I'm rating as a current buy is fast-growing pizza, café and bakery conglomerate Retail Food Group Limited (ASX: RFG).
Whilst I'm by no means saying it will see 1,000% returns from current prices, Retail Food's strong track record and exciting growth prospects makes for great promise if management successfully executes on strategy. Watch this space.
