Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. Getting in before Wall Street discovers them -- or rediscovers them -- means you can stake a claim before they start taking off.
Here we check out companies with minimal analyst coverage at best and then pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS' top ratings but hasn't yet caught analysts' attention could be your next home run investment.
|
Stock |
CAPS Rating (out of 5) |
Wall Street Picks |
Wall Street Bullish Sentiment |
Estimated EPS Growth Next Year |
|---|---|---|---|---|
| NXP Semiconductors (Nasdaq: NXPI) | ***** | 5 | 80% | 58% |
| STAAR Surgical (Nasdaq: STAA) | ***** | 5 | 100% | 78% |
Source: Motley Fool CAPS.
Remember, without much analyst support, you'll have to do more digging on your own to see whether these stocks deserve a spot in your portfolio, so don't just buy or sell them based solely on their appearance here.
Hiding in plain sight
Near-field communications, or NFC, is a technology that allows communication over very short distances -- typically just a few centimeters. Using a smartphone, a user can touch the phone to an NFC tag and immediately be connected to a website, dial a phone number, or launch an app to show information such as business details or points of interest.
Now it's showing up in tablets, too. NXP Semiconductor, the leading NFC chip specialist, announced that Google's (Nasdaq: GOOG) new Nexus 7 tablet will include NFC capability. The Android tablet will be running on the latest 4.1 Jelly Bean release that fully incorporates NXP's PN65 NFC solution. The Nexus 7, with a 7-inch screen, isn't designed to be an "iPad killer," but it could be a "Kindle Fire killer." The NFC capabilities included in the tablet will give Amazon.com (Nasdaq: AMZN) a run for the money at the low end of the tablet pool.
While Motorola's Xoom tablet will also probably feature the new OS, it will undoubtedly make its way to others soon after the mid-July release date. And it will be widely available on smartphone handsets, too, though one would imagine Google's own branded phones and some Samsung models will feature it before anyone else.
This proliferation of NXP's technology will obviously help the semiconductor specialist, but it will help advance the technology in general as well. As more people become comfortable with its capabilities, there should be a boomlet that pushes NXP even higher. As CAPS member pyroslayer points out, "If NFC continues to expand globally, NXP is in a great position to maintain and expand its status as a leader."
I've already rated NXP to outperform the market on CAPS, but let me know in the comments box below or on the NXP Semiconductors CAPS page how much further you think it can go, and then add the chipmaker to the Fool's free, personalized stock-tracking service to stay on top of developments in the NFC arena.
Hung up on growth
Minimally invasive ophthalmic-products manufacturer STAAR Surgical has its eye on bigger prizes after reporting quarterly results in May that saw revenues jump 4%, with sales of its implantable lens soaring 25% from last year. Problem is, those revenue results and its profit picture came in below analyst expectations.
STAAR's Visian Implantable Collamer Lens treatment is an alternative to LASIK surgery, one that corrects myopia. But unlike the better-known rival treatment, ICL is reversible. A "collamer" lens is surgically inserted into the eye, and because it's a proprietary, advanced lens material made from collagen, it is 100% compatible with the body.
The most troubling aspect is that while most of STAAR's revenues have always come from overseas markets, U.S. sales continue to fall, dropping sequentially and annually each and every quarter for the past three years.
It may be just a matter of getting the word out to more potential patients, so it's launched a new global consumer awareness initiative for its Visian product. Japan, which is STAAR's largest market, will be getting special attention. But corrective eye surgery continues to be a competitive market, with Abbott Laboratories (NYSE: ABT) and Bausch & Lomb being larger rivals.
I do happen to think it is a matter of gaining greater visibility, and I rated it to outperform the broad market indexes on CAPS more than a year ago. Thus far it's a winning CAPScall for me. Let me know on the STAAR Surgical CAPS page or in the comments below what will make this company turn around, and then add it to your Watchlist to be alerted if any changes to its potential come forward.
Swing for the fences
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