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 Buffalo Wild Wings 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 less than 100 active recommendations on CAPS, despite earning analysts' estimates of double-digit long-term growth:

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
Mobile satellite voice and data services provider Globalstar might soar to heavenly heights as its products gain a foothold. Its technology allows real-time location updates, along with emergency notification capabilities. Last month, mapmaker DeLorme ordered 15,000 of its SPOT Satellite Communicators, with the goal of combining the technology and its handheld GPS device. Globalstar also promises to allow message sharing with social networking sites like Facebook and Twitter.

CAPS member a2gsg argues that Globalstar makes a better bet than rivals ICO Global (Nasdaq: ICOG) and Iridium (Nasdaq: IRDM), although many industry players have been hurt by financial woes:

but this illustrious industry segment is just soooooooooo out of favor at the moment and still has HUGE over hang ... from its and iridiums and ICO's previous (chapter 11'd) incarnations, it's why it trades at what it does and is a significant steal at this price -- if you can just let the shares sit for the next 12 to 18 to 24 [months] as [Globalstar's] next generation constellation gets launched and becomes operational and let Mr. Market take recognition...

A scary ride
If its clinical trials stay on track, Nymox Pharmaceutical won't be hidden much longer. Although it has a significant R&D pipeline, the biopharmaceutical's best hope lies with its novel treatment for benign prostatic hyperplasia, NX-1207, which is in pivotal phase 3 trials. Thus far, the results have been positive, but as any biotech investor knows, these late-stage trials don't always work out like they're supposed to.

GenVec recently saw its stock plummet, after its promising pancreatic cancer treatment TNFerade failed to live up to the hype. Antigenics (Nasdaq: AGEN) has been trying to prove the efficacy of a cancer therapy several years after it failed to meet its end point in a phase 3 trial.

Highly rated CAPS All-Star member TSIF said last year that Nymox investors should benefit in the long run for their faith in its treatment:

Like my green thumb, those buying at $7.07 will come out ahead, if they hold, and Nymox progresses further into the FDA cycle. If proven safe and effective, then those willing to incur the risk by getting in early stand the most to gain. Best of luck to Nymox long holders. I expect to turn this pick green in the future, but lower starting price would have been nicer!

Divine inspiration
To develop into a real production company, Zion Oil & Gas will need a serious leap of faith. Zion is no oil sands driller, like Suncor Energy (NYSE: SU), which needed to wait until it became economically feasible to extract oil from an otherwise difficult location to make it to the big time. Zion has nearly a decade of experience of exploring for oil in Israel, but it still has no revenue or operating income to show for it.

Its vision is based on Biblical references to oil and natural gas existing in certain territories. But until it can prove that these resources do exist in sufficient quantities there, investors might want to focus instead on the "going concern" notice its auditor regularly files with the financial reports.

While johnsom3 believes "the science is proving the Scriptures," doubter dubblebubbler says people also believe that "pro-wrestling isn't fake."

Zion doesn't have an enviable track record, but 62% of CAPS members rating the exploration company believe it will outperform the market. Head on over to the Zion Oil & Gas CAPS page and divine your own opinion on its future.

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.