Finding Investment Gems: Eric Fry's Framework for Identifying "Triple-Threat" Stocks

The investment world operates on a simple paradox: the best companies are often hard to find. Most investors know that combining three elements – rapid growth, strong profitability, and attractive valuations – creates exceptional opportunities. Yet markets rarely offer all three in a single package. This is where Eric Fry’s investment methodology becomes valuable. By identifying what separates true opportunities from overpriced hype, investors can avoid value traps and find stocks that genuinely deserve their allocation of capital.

Warren Buffett demonstrated this principle when he purchased Apple Inc. (AAPL) in 2016 at just 11X forward earnings, eventually generating over $120 billion in profits for Berkshire Hathaway. Eric Fry similarly identified this rare combination in copper and gold miner Freeport-McMoRan Inc. (FCX), helping his subscribers capture 1,350% gains in just 11 months during 2021. These “triple-threat” companies – balancing growth, profitability, and value – are the holy grail of equity investing.

The Challenge: Why Most AI Stocks Fall Short

The modern AI stock landscape illustrates why finding these complete packages remains so difficult. Consider Xometry Inc. (XMTR), a marketplace platform using artificial intelligence to connect manufacturers with customers. The company operates a digital exchange where small firms can request quotes for complex parts instantly, while larger customers benefit from bulk order optimization.

From a growth perspective, Xometry delivers. Net profits are projected to swing from negative $2 million to positive $13 million this year, then double twice over the subsequent 24 months. However, the company fails the other two critical tests. On quality and profitability, Xometry has remained unprofitable since going public in 2021, making it unappealing to conservative investors. On valuation, shares trade at 110X forward earnings – more than five times the S&P 500 average – pricing in unrealistic expectations about future performance.

This represents what Eric Fry identifies as the “single threat” pattern: companies that excel in one dimension while faltering in others. Growth alone cannot justify the premium, especially when combined with operational losses and razor-thin margins.

The Partial Solution: Companies That Check Two Boxes

Arm Holdings PLC (ARM), the British chip architecture designer, presents a more compelling case but still falls short of the complete picture. Arm’s dominance is undeniable – its designs power approximately 99% of all smartphone processors globally. The company has pioneered power-efficient chip architecture essential wherever energy conservation matters: mobile devices, Internet of Things (IoT) equipment, autonomous vehicles, and increasingly, data center servers.

This “must-have” positioning translates into extraordinary economics. Arm’s latest v9 architecture imposes a 5% royalty on final product value atop regular licensing fees. When Apple sells an iPhone 16 Pro for $1,199, Arm captures 5% of that premium price rather than the $485 manufacturing cost. The company generates returns on invested capital exceeding 40%.

Arm’s pivot toward AI accelerators has unlocked genuine growth opportunities. Industry analysts project 25% average profit expansion over the next three years, propelled by demand for power-efficient AI computing across consumer and enterprise segments.

Yet Arm exemplifies what Eric Fry would classify as a “double threat” – meeting two of the three criteria but missing the crucial third. The company trades at 61X forward earnings despite its more modest growth profile compared to pure-play AI firms. This valuation exceeds Nvidia (NVDA) by a considerable margin. The market’s sensitivity to guidance became apparent when Arm shares dropped 12% following an earnings beat, simply because management projected “only” 12% quarterly sales growth to $1.05 billion. For investors seeking reasonable entry points, Arm’s premium pricing remains prohibitive.

The Complete Package: What Triple-Threat Investing Looks Like

Corning Inc. (GLW), a current holding within Eric Fry’s Fry’s Investment Report, demonstrates how exceptional opportunities emerge when all three criteria align. The upstate New York manufacturer has dominated advanced materials since 1851, inventing Pyrex in 1915, pioneering low-loss fiber optic cables in 1970, and creating the iPhone’s “Gorilla Glass” in 2007.

Today, Corning stands at the intersection of legacy excellence and future opportunity. The company leads in LCD panels, smartphone screens, fiber optic infrastructure, and specialized displays. Perhaps most importantly, Corning manufactures the high-performance fiber optic cables essential to AI data center operations – allowing servers to transmit greater data volumes across compact physical spaces. This connectivity segment has emerged as one of the company’s most powerful growth drivers.

The profitability story is equally compelling. Corning has delivered positive operating earnings for two consecutive decades, weathering multiple recessions without losses. Return on equity is projected to surge to 17% this year – approaching double the broader market average. Meanwhile, shares trade at 19X forward earnings, sitting below the S&P 500’s 20.2X multiple. This is genuine value in a quality business.

Skeptics rightfully question whether such a combination can exist without hidden flaws. Recent headwinds do present real challenges: the company supplies major television manufacturers now facing substantial export tariffs to the United States, while federal broadband expansion funding faces potential cuts. These concerns contributed to a 15% decline since the beginning of 2026.

Yet closer analysis reveals why the market has overcorrected. Approximately 90% of Corning’s U.S. revenues derive from domestically manufactured products, while 80% of China-based sales originate from local production. The direct tariff impact is estimated around $15 million – immaterial relative to projected pretax profits of $2.8 billion this year. Additionally, Corning is developing the first entirely U.S.-manufactured solar module supply chain, potentially helping solar manufacturers circumvent tariff proposals that could reach 3,500%.

Eric Fry’s Hidden Gem: The Semiconductor Play

While Corning’s data center connectivity products represent a meaningful exposure to AI infrastructure buildout, Eric Fry has identified another opportunity positioned directly at the epicenter of artificial intelligence advancement. This company competes head-to-head with industry giant Nvidia in an intensely competitive, notoriously cyclical sector. Precisely these characteristics have triggered persistent investor selling despite the company’s superior operational performance and fortress-like balance sheet.

The core business is accelerating, particularly the emerging data center division. This segment expanded dramatically year-over-year, with revenues nearly doubling while now representing half of total company revenue. Notably, Nvidia nearly became an acquisition target for this very company during the early 2000s, underscoring the technical capabilities and strategic foresight involved.

As a major supplier of cutting-edge semiconductor solutions, the company has successfully transitioned into various artificial intelligence technology applications with exceptional profitability. The current valuation has become increasingly attractive relative to the execution being delivered.

Eric Fry’s methodology – seeking companies that simultaneously achieve rapid expansion, operational excellence, and reasonable valuations – transcends market cycles and sentiment swings. By focusing on these fundamentals rather than chasing popular narratives, investors position themselves for both downside protection and meaningful upside capture across full economic cycles.