How to Invest in One of the Smartest Acquisitions of 2014 By Michael A. Robinson

Today I want to show you a company that has just made one of the smartest acquisitions of the year, as its share price climbs to reflect this deal's potential.

The company is among the best in an industry that's often overlooked, but offers incredible profit opportunities for those who know how to invest.

I'm talking about fleet and fuel management.

You see, most 18-wheelers have a fuel capacity of 200 to 300 gallons, and with gas and diesel costing $3.40/gallon and up, long-haul truck drivers are regularly shelling out $1,000 and more to fill up.

And the fleets of business and government vans, box trucks, and cars that clog our streets are spending millions of dollars on gas every day, too.

Tracking and controlling all this is unimaginably complex for the owners of these fleets. Further, the temptation for drivers (or gas station cashiers) to siphon off some of these billions for themselves must be enormous.

Therefore, the profit potential for firms that can help fleet owners cut costs and deter theft is also vast.

One of the best companies in this business is FleetCor Technologies Inc. (NYSE: FLT) - and it just got substantially better thanks to a very strategic acquisition. Investors loved the deal, and FLT stock skyrocketed 9.2% in one day on news of the acquisition - and has revved up another 5% since then.

If you followed my advice when I first recommended FleetCor back in May 2013, then you were there first - and you're sitting on gains of 90%+.

I'm always telling you folks that mergers and acquisitions are some of the best ways to spark a company's growth and its share price... and here's proof.

When I reintroduced you to FleetCorback in March, I told you that this digital-payments company was "making all the right moves."

And that was well before this latest deal. On Aug. 12, FleetCor announced that it had picked up corporate card company Comdata in a $3.45 billion deal. The acquisition puts FleetCor in several new and growing business lines, including healthcare payments and virtual cards.

The Comdata deal dramatically raises FleetCor's heft. It brings in 20,000 customers who make about $54 billion in payments annually with Comdata's products.

However, those virtual cards are the most intriguing part of this deal, and here's why.

Virtual cards are a relatively new and rapidly growing technology. They allow accounts-payable departments to pay their vendors more efficiently, more quickly, and more accurately.

And I think FleetCor will be able to quickly offer Comdata's virtual card services through its already robust trucking and fleet markets. Drivers will be able to leave their wallets on the dashboard while pumping gas or getting their brakes fixed - payments will all be taken care of virtually.

Here's how FleetCor's core business works.

The company provides fuel cards and other payment services that help its customers - mostly trucking companies and fleet owners - track and control costs. FleetCor charges its customers a monthly fee and levies vendors (gas stations, repair shops, etc.) a service charge when those drivers fill up.

This is all about using sophisticated software and advanced algorithms to provide payment security.

What I really like about this company is that it is big in the wealthy and growing energy sector - and it isn't a strictly domestic affair.

FleetCor counts energy companies like ARCO, BP, and Chevron among its major customers - and in 2013 more than 49% of its sales came from outside the United States. Moreover, it has acquired more than 60 companies around the world over the past decade, including ones in Australia, New Zealand, Brazil, and Russia.

And Comdata isn't FleetCor's only recent tech-minded acquisition. The Norcross, Ga.-based firm recently picked up two telematics companies: NexTraq in October and Masternaut in June.

In a way, fleet telematics is sort of like a CB system for the twenty-first century. With telematics, fleet owners can better control costs through real-time vehicle tracking, route optimization, job dispatch, and fuel usage monitoring. And this is all done through GPS, mobile, and satellite technology.

Instead of the "company" talking to drivers via CB, the company now "talks" to the rigs themselves.

Can driverless trucks be far behind? They're already being used in Australia - and tested in Germany and Japan.

Don't expect FleetCor to slow down now. Chairman and CEO Ron Clarke sounded bullish about further growth even after the Comdata pickup - his company's largest acquisition yet.

"We do have some other late-inning deals that we like," he told B2B information site PYMNTS.com following the deal. "So if the deal is right and fits the screen... we'll keep buying things. And to the extent that we feel overleveraged or out of capacity, we'll slow down. But we are still looking at some other deals today."

Knowing not only when to buy but also when to slow down is a sign of good leadership - that slowing down is harder than it looks. Remember my Tech-Wealth System Rule No. 1: Great Companies Have Great Operations.

The biggest part of "great operations" is great leadership. We've got that here. Clarke hails from tech giant General Electric Co. (NYSE: GE). He also was a leader at Automatic Data Processing LLC (Nasdaq: ADP), the computer services company known for its closely watched jobs reports.

And we've got some very nice financials and share-price growth as well.

Trading at roughly $146, FleetCor has a market cap of $12.18 billion and operating margins of 47.4%. It has a 24.6% return on equity (ROE) and a price/earnings (P/E) ratio of 40.9. And last year, it brought in $530.5 million in free cash flow.

Besides the Comdata acquisition, the latest share-price driver is FleetCor's impressive second-quarter earnings report. Driven by organic growth and acquisitions, in the quarter ended June 30, the company reported net revenue of $273.5 million, up 23.8% from the year-ago period. Net income was at $88.5 million, up 21.1%.

With gas prices still high, trucking companies and fleet owners continue to look for ways to control costs and eliminate fraud - so the long-term trends favor FleetCor.

And thanks to impressive earnings-per-share growth - up 32% annually over the past three years - I see the stock rising at least another 15% in two years.

In the meantime, because the stock is so frothy right now and the market so jumpy, here's how to invest in FLT stock for maximum profit.

I recommend you use my "Cowboy Split" strategy here. Pick up half your intended position now, another quarter in October, and the final quarter if there's a market correction.

Folks who bought in back in May 2013 have already been very amply rewarded - and so have those who engaged in March (they've got gains of 30%). FleetCor will continue filling their portfolio's tank - and yours, too - for years to come.

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