How To Win The Hot-Dog Investment Contest 

Plus…

On July 4, 2021, Joey Chestnut ate 76 hot dogs in 10 minutes.

It was during Nathan’s Famous Fourth Of July hot-dog-eating contest in Coney Island, New York. Eating that many hot dogs is difficult to imagine. It hurts just thinking about it. But it’s not the most astounding thing that’s ever happened with Nathan’s hot dogs. What those hot dogs have done for investors is even more incredible.

Since 2002, Nathan’s Famous (NATH) has delivered a staggering total return of over 5,500% – that’s 17% a year, year-after-year.

That dwarfs the returns of even the “hottest” tech stocks. The Invesco QQQ Trust (QQQ) – which tracks the Nasdaq-100 and is stuffed with the likes of Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) – has “only” returned about 1,150% over the same period, or roughly 10.6% annually. Even over the last decade, when tech has seemingly outperformed everything, hot dogs win. Nathan’s total returns are over 200%, beating QQQ’s 180% gain.

How did crappy hot dogs beat the most iconic, fastest growing, most important businesses in the world?

Nathan’s business model is the Mona Lisa of the single most important concept in equity investing: the unmatched power of capital efficient businesses. These are businesses like Domino’s Pizza (DPZ) and The Hershey Company (HSY) and McDonald’s (MCD) that, through a mix of product characteristics and business models, don’t have to invest heavily in their own businesses to foster growth.

These businesses don’t burn through billions on R&D labs, or invest in data centers or moonshot acquisitions. As a result, far more of their annual earnings can be spent directly rewarding shareholders. With high-margin products, these businesses can spend a huge percentage of their revenues paying dividends and buying back shares, providing a steady return for investors that doesn’t require visionary management.

Founded in 1916 by Polish immigrant Nathan Handwerker, Nathan’s started as a humble hot dog stand in Coney Island, selling dogs for a nickel. Today though, Nathan’s Famous doesn’t sell hot dogs at all. It doesn’t make them either. There are no factories or restaurants. Nathan’s simply licenses its brand, recipes, and trademarks to third parties, like Smithfield Foods (SFD).

In fiscal 2025, Nathan’s licensing revenue hit $130 million. And how much did the company have to spend on capital investments to produce this revenue? Virtually zero. Less than 1% of sales.

Nathan’s partners handle all the heavy lifting. They take care of manufacturing, distribution, and retail (think supermarkets, ballparks, franchises). All Nathan’s does is collect fees – high-margin cash – with zero inventory risk or heavy equipment.

As a result, Nathan’s can convert about 15% of its revenue directly into free cash flow. That leaves management with one simple decision to make each year: pay a cash dividend or buy back shares.

Since 2002, Nathan’s has paid $45 in dividends and repurchased 50% of its shares! Result? Earnings per share have compounded at 15% annually, far outstripping revenue growth of 5% to 7%. That’s how an average business – like selling hot dogs – can transform into an incredible wealth-building machine.

Investors tend to chase growth and glamour. But capital efficiency and great capital allocation will beat growth and glamour over an investment lifetime. If you’re investing to build lasting wealth, these are the businesses you need most.

Here are a few more great examples:

Investing in low-risk, low-volatility, high-quality, capital efficient businesses – like these – is a wonderful alternative to fixed income (bonds) during inflationary periods.

If you’re retired or close to retirement and your advisor is urging you to consider moving more of your assets into bonds, consider these kinds of stocks (when they’re trading at good prices) as an alternative. They can provide protection against inflation without any meaningful increase in risk.

Tell me what you think: [email protected]

Good investing,

Porter Stansberry
Stevenson, Maryland

Days from now, we could see the market’s biggest move of the year. That’s the newest prediction from the man who warned about the 2025 crash three months before it unfolded. According to his disturbing January 28 evidence, you have just days to prepare for an event that could sweep the market and open the most lucrative trading opportunity in two decades. Click here to learn more, including two free recommendations.

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We do not, however, make any representations about their investment ideas, nor will we warrant them as equal to our own.

Porter & Co. also may disagree with the ideas presented by our sponsors but we understand there’s more than one way to skin a cat. With that said, you can check out what they’re predicting by clicking here.

1. Silver hits a major milestone. Silver traded above $100 per ounce for the first time in history today – and is now up more than 230% in the last year, and an incredible 100% in the last two months alone. While sentiment in precious metals is becoming a bit frothy today, the rally could have further to run… When adjusting for the government’s official inflation figures, silver would need to trade above $200 per ounce to make a new all-time high… and when adjusting for money-supply (“M2”) growth, that previous record rises to more than $700 per ounce.

2. GE is back. Following the break up of GE into three businesses: GE Aerospace (GE), GE Vernova (GEV), and GE Healthcare (GEHC), the combined value of the shares has soared by more than 500%. As Porter detailed in the December 2025 Complete Investor, spin-offs can unlock a lot of value. In regards to GE Aerospace, it beat earnings expectations today, with earnings per share growing 19% year over year. The shares have become the single largest holding of Chris Hohn’s Children’s Investment Fund Investment Management (TCI), which posted the largest-ever one-year gain ($18.9 billion) by a hedge fund last year.

3. Booz Allen Hamilton rallies on solid earnings. Shares of government contractor Booz Allen Hamilton (BAH), one of our favorite “legal monopolies,” jumped 8% after better-than-expected earnings for its fiscal Q3 2026. The company also raised its fiscal 2026 earnings per share guidance 9%. Despite a contraction in its civil segment due to the government shutdown, Booz’s defense and intelligence segments picked up the slack. With U.S. President Donald Trump recently proposing a 50% increase to the U.S. defense budget, Booz Allen should be among the biggest winners.

Porter first recommended Franco-Nevada (FNV) – our favorite gold royalty company – in Complete Investor in May 2023 and added it as a Best Buy in December 2023… it is up about 70% since our recommendation and 120% as a Best Buy.

Porter Comment: Jody – While we’re extremely optimistic about BWX Technologies (BWXT) and its role in building next-generation nuclear power, we strive to maintain investment discipline at all times. We will only recommend buying securities when we believe they’re attractively priced.

At over $200 per share, BWXT has an enterprise value of over $20 billion – that’s 62x trailing 12-month earnings per share (“EPS”). That’s 50x the market’s expected EPS in 2026. That’s 40x the company’s earnings before taxes, depreciation, and amortization – which as business owners know are real costs.

It’s unlikely that buying shares of BWXT at the current price will produce market-beating returns. So, no, we’re not going to increase our buy price simply because the stock is way, way up.

In regards to other nuclear-development companies, such as NuScale Power (SMR), Oklo (OKLO), and NANO Nuclear Energy (NNE) – these are all pre-commercial-stage businesses. I don’t expect for them to see any deployments before 2030. That means these businesses are a long, long way from what I would consider “investment grade” opportunities. NuScale, for example, lost $380 million last year. Oklo lost $70 million-plus. As you know, these stocks surged dramatically in 2024 and have since seen big drawdowns of more than 50%.

Investors are badly underestimating the competitive position of these new entrants compared to much better financed large industrial businesses like GE Vernova (GEV), Hitachi (HTHIY), Rolls-Royce SMR (RYCEY), and Westinghouse.

However, the opportunity to create safe, reliable distributed nuclear power systems is extremely large. And it’s certainly possible a new entrant will win a large portion of the eventual build out of what are referred to as small modular reactors (“SMR”).

In regards to The Complete Investor, It’s unlikely that I will develop enough conviction around any of the new entrants for several more years. I’ve learned the hard way (several times) that picking emerging technology winners is very difficult. I’m far more in favor of taking the easy wins – like BWXT at 20x earnings, Domino’s Pizza (DPZ) under $300, and The Hershey Company (HSY) at $150 a few months ago. If you watch our Best Buys publication, you’ll see these “layups” appearing month after month in the world’s best businesses. Unlike Olympic skaters, investors don’t get points for difficulty. There are no “called strikes.” You can sit at the plate as long as you want and wait for a fat pitch, right down the middle.

But if you like ultra-high-risk, extremely volatile investments… we have Erez Kalir doing the hardest stuff in finance – picking winners in small-cap growth stocks – in our Tech Frontiers newsletter. Since inception, he’s racked up 70%-plus annualized returns and an incredible win rate. He makes it look easy, but trust me, it isn’t.

Porter Comment: Sandi – Yes, that’s right. That’s what that means. If the U.S. fiscal position continues to deteriorate rapidly and the U.S. Treasury market begins to sell off in a panic, there will be a very significant bear market in securities – stocks and bonds. I also believe there is a significant risk that the U.S. banking system collapses because of soaring losses to the banks’ balance sheets. Bank of America (BAC), for example, is still holding over $100 billion in unrecognized losses on low-yielding (under 2%) mortgage bonds that it bought in the summer of 2020. If the banks fail, that will be a very bad day in the markets.

Please note: The investments in our “Porter & Co. Top Positions” should not be considered current recommendations. These positions are the best performers across our publications – and the securities listed may (or may not) be above the current buy-up-to price. To learn more, visit the current portfolio page of the relevant service, here. To gain access or to learn more about our current portfolios, call our Customer Care team at 888-610-8895 or internationally at +1 443-815-4447.