Low-Profile Stocks for High Returns

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 Autoliv to Nuance Communications. 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 fewer active recommendations on CAPS, despite having double-digit revenue growth potential next year.

Source: Yahoo! Finance, Motley Fool CAPS.

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
The other day, President Obama endorsed the FCC's plan to provide 500 megahertz of additional broadband spectrum for use by wireless devices like mobile phones and laptops. Although it would double the available bandwidth, it's no sure thing since it also endorses the view that the FCC has the right to regulate broadband. Congress might object to its fiefdom being encroached on.

Yet if it does go through, and with smartphone technology continuing to advance, the need for more capacity per user grows with it. It's why all wireless carriers are expanding their networks by turning to wireless backhaul (that's simply connecting one network to another). MetroPCS (NYSE: PCS), for example, signed on with FiberTower, a leading backhaul specialist, to provide the support needed for the coming launch of its 4G LTE wireless broadband service.

AT&T (NYSE: T) is FiberTower's biggest customer, providing 39% of 2009 revenues, and with the successful introduction of the new iPhone 4 it will be sure to benefit from spectrum expansion. The lift in demand such developments would bring FiberTower's way had CAPS member breman seeing growth: "goin to da moon!!!! demand!! demand!!!! demand!!!!"

Rev those engines
It's easy to get caught up in the fervor of cancer treatment developments, as CAPS member Stageplayer does when he suggests tiny Micromet "may be on the verge of a possible cure for cancer." Its technology for shrinking tumors does indeed hold potential, but I'm not willing to buy into any claims of "cures" just yet.

Still, sanofi-aventis thinks enough of Micromet that it has partnered with it as one possible avenue for developing oncology candidates. Sanofi's also paired up with Regeneron Pharmaceuticals and Exelixis (Nasdaq: EXEL), and is pursuing solo projects.

There's enough excitement in Micromet's field to attractive investors like CAPS member BioFutures, who earlier this year expressed optimism at the biotech's future:

The encouraging MT-103 data presented at ASH in December 2009, which was highlighted in the "Best of ASH" session, suggests that a randomized trial of MT-103 in B-ALL looks to be very promising in terms of probability of success. Micromet has shown strong momentum since bottoming late October 2009. With the recent public offering raising $75 million, Micromet is in great shape financially and should see continued wind behind its sails. I see Micromet as a future leader with the enormous potential of their BiTE technology poised to dominate the antibody therapeutics sector.

For now, though, we'll hold off on calling it a cure.

Open spaces
QuickLogic is one of those companies you've probably never heard of, but it forms some of the building blocks of the technology you've come to appreciate. It's a semiconductor manufacturer that builds chips based on customer-specified standards, and though Honeywell accounted for 10% of revenues last year, it's apparently found a home in the designs of some marquee-brand USB modem makers, too. That may end up shrinking Honeywell's percentage contribution.

CAPS member youngblood58 sees QuickLogic as "All part of the smart devices revolution," and with the growth of wireless capabilities in mobile handheld devices, the need for customization based on specific OEM needs ought to help the chip maker prosper.

Keep a high profile
Sign up today for the completely free Motley Fool CAPS service, and tell us whether these low-profile stocks are on their way to higher returns. There you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.