Emerging dominant firms

I ran across an article at 24/7 Wall St predicting 7 emerging, American, monopolies. I don't necessarily think they are all monopolies; neither do I think they are worth investing in right now. However, it may be worth thinking about these companies and consider investing in them during a stock market crash or a hard sell-off.

Here are the companies they list along with some of author's comment. My thoughts are in square brackets in green:

• Netflix (NFLX): "Netflix is expected to have more than 19 million subscribers at the end of 2010. Its growth may explode in the coming years Back in April, Trefis Research predicted that it would eventually reach as many as 47 million subscribers. That represents 39% of US households with DVD players. Where Netflix wins is with its library of more than 20,000 titles and its flexible business model that accommodates streaming or DVD by mail." [Mail-order movie rental company poised to dominate the online movie rental market. This company has a legitimate shot at becoming a dominant player but it is still a long way off. It needs to develop strong relations with content providers for it to maintain a leading position.]
• Lululemon Athletica (LULU): [This is a yoga-oriented clothing retailer. Of all the monopolies-in-the-making, this is the one with the lowest probability of surviving. It's very difficult to say whether the trend towards yoga is a fad or something that is a generational trend. I'm not familiar with clothing/shopping so I'm not sure about its brand strength either.]
• Sirius XM (SIRI): "...a monopoly in satellite radio, yet it represents a tiny part of the radio business. Radio was roughly $20 billion business a decade ago. A BIA/Kelsey report earlier this year forecasted that 2009 revenue was $13.7 billion and 2010 revenue would be about $13.9 billion. SIRIUS XM is expected to have 2010 revenues of $2.83 billion and nearly $3.1 billion in 2011 revenues." [This is definitely a monopoly, or at a minimum oligopoly, but its profitability is big question mark. Maintaining satellites is very expensive so I doubt it will ever be a high ROE business. I am also not sure if we are seeing the beginning of a long-term decline in radio listernership.]
• American Water Works (AWK): "...Is the company a true monopoly in the United States? No. It does have a virtual monopoly is in its markets where it operates. There is competition in many markets for electricity, but that is not the case for water. The company is the largest public U.S. water and waste water utility. It has 16 million customers in 35 states and two Canadian provinces. Companies need the approval of regulators to hike rates. Still, how many water utilities can exist in a single geographic location? As far as the future, American Water Works can grow by acquiring adjacent water utilities. It just so happens that American Water is the best of the best. With a $4.3 billion market cap, it is the largest by market cap of its water utility brethren." [Problem with companies like these is that profit is capped by regulators. The type of businesses investors should be looking for are unregulated businesses with monopoly-like characteristics. I'm not saying water utilities are bad investments but it's not the type of monopoly I would be interested in.]
• Fair Isaac (FICO): "Fair Issac is the developer of the industry-standard FICO score..." [Credit reporter used heavily for consumer lending (at least that's my understanding of it). This is a candidate for a monopoly-type company worth owning. I'm not sure how much permanent damage has been done from the real estate bust but chances are this company's services will remain near the top of the pack.]
• Molycorp (MCP): [One of the few rare earth mining firms. As far as I'm concerned, this is driven by pure hype with weak understanding of long term economics by anyone. Mining rare earth elements is a poor business and that's why there are practically no mining companies around. To make matters worse, the upside is likely capped since the market size can never be big (it's sort of like how a platinum mining company is unlikely to ever have a market cap of $100 billion.)]
• Monsanto (MON): "The world’s largest seed company produces around 90% of the world’s genetically engineered seeds. Outsiders and smaller players are the ones that consider Monsanto to be a monopoly Having the stock ticker “MON” had nothing to do with “Monopoly.”" [Controversial company, especially if you don't like genetically-modified foods, but it is a definite candidate to an oligopoly. I like Monsanto, as well as Syngenta (SYT), in the long run. They have great potential to become key players in agriculture. The problem, though, is that they are (likely) overvalued now.]