Like the song says, investors are looking for stocks to love in all the wrong places. They'll pile into the momentum stocks everyone else buys, but ignore lesser-known opportunities for fear of straying from the crowd.
Yet the search for undiscovered jewels has informed many of our Motley Fool Hidden Gems picks, from Blackboard to TransDigm. Overlooked by Wall Street and Main Street, and thus undervalued, these stocks hold the best potential to deliver outsized returns.
The Motley Fool CAPS community knows a bargain when it sees one. Below, you'll find several under-the-radar stocks that brim with promise. These companies have garnered 100 or less active recommendations on CAPS, though the community thinks they still have outsized potential.
Stock |
CAPS Rating
|
No. of Active Picks |
Est. EPS Growth
|
---|---|---|---|
Global X Silver Miners ETF |
**** |
84 |
N/A |
Lear |
*** |
31 |
17% |
Occam Networks |
** |
46 |
15% |
Source: Zacks.com, Motley Fool CAPS; NA = not available.
Naturally, we want you to look a bit closer at these stocks before buying. Maybe investors are staying away from these stocks for a reason so make sure there's nothing seriously wrong with the company before you plug it into your own portfolio.
Under the radar
For the Fool's silver guru Christopher Barker, Silver Wheaton
With 98% of CAPS members expecting the silver ETF to beat the market, and no one on Wall Street keeping an eye on it yet, investors still have time to beat the rush. Let us know on the Global X Silver Mines ETF CAPS page whether you think all that glitters is ... silver!
Rev those engines
Auto-parts supplier Lear came out from under court protection last winter, just in time to see Ford
So if the industry is roaring ahead, then Lear is definitely an auto-parts stock you'd want to own. The big carmakers aren't going anywhere without Lear or Johnson Controls to steer them in the right direction. That probably explains why 90% of the CAPS members who have rated the auto parts supplier believe it will bolt on market-beating returns.
Add Lear to your My Watchlist page, and get all the Foolish news and analysis about this company supplied to you in one convenient place.
End of times
Occam Networks might have been laying low with most investors, and even Wall Street -- only two analysts had picked the stock. But Calix was well aware of it, offering to buy Occam for $171 million. That's a nice 47% premium to the stock's pre-offer trading price.
Occam wasn't the only company working to bring broadband to rural areas. Smaller telecoms like Frontier Communications
tjseattle's only regret about his investment in Occam Networks was that he didn't buy more when he had the chance:
I bought this stock twice durning the past 18 months: Should have bought more!! My return has more than doubled. With the pending buyout and the potenial markets that exsist there is money to be made.
Keep a high profile
We've had three stocks today that hold a lot of promise, but possess equally persuasive arguments against them. That's why you need to look beneath the headlines and press releases, to get a fuller picture of where your money is going.
Check into Motley Fool CAPS and tell us whether these low-profile stocks are on their way to higher returns.