While acquiring little-known stocks can be a scary proposition, you should also realize that going with the predictable also has its risks. Fundamentally, anytime you enter the capital markets, you’re taking risks. True, investors can modulate how much exposure to danger they incur. Nevertheless, there’s no such thing as zero risk.
Moreover, going with the established companies – as opposed to hidden gems stocks – carries with it opportunity risk. In this case, by going with the rest of the crowd, you might lose out on the possibility of achieving significant returns. Look, I bet that there are plenty of folks right now who wish they would have gotten into cryptocurrencies back in the middle of last decade. Now, they have to wonder, what if?
To be 100% clear, buying undiscovered stocks can easily go awry. However, by taking calculated risks, investors could potentially accrue massive if not lifechanging returns over time. On that note, below are compelling growth stocks to consider.
Little-Known Stocks: Ebix (EBIX)
A word-salad monstrosity among little-known stocks, Ebix (NASDAQ:EBIX) is a leading international supplier of on-demand software and e-commerce services to the insurance, financial, healthcare, and e-learning industries. Still, investors can easily forgive the convoluted description of its business because of the underlying performance. Since the beginning of this year, EBIX gained nearly 39%. Over the past one-year period, it shot up over 59%.
Much of the enthusiasm centers on the operational component of Ebix’s financials. Specifically, the company’s three-year revenue growth rate on a per-share basis clocks in at 21.6%. This stat outpaces 76.69% of companies listed in the software industry. Also, it features a trailing-year net margin of 5.22%, above 64.8% of the competition.
As well, EBIX makes a strong case for hidden gem stocks because of its value proposition. The market prices shares at a trailing multiple of 15.85, ranking better than 72.28% of the field. Finally, analysts peg EBIX as a moderate buy with a price target of $29.75, implying over 10% growth.
Little-Known Stocks: Andersons (ANDE)
An American agribusiness enterprise, Andersons (NASDAQ:ANDE) conducts business in the commodity trading, ethanol, plant nutrient, and rail sectors. While a seemingly boring entity, Andersons benefits from core necessities. Plus, geopolitical flashpoints put a massive spotlight on the global food supply chain. As a result, ANDE gained almost 35% since the start of the year, ranking among the top little-known stocks.
On a financial note, both investors and speculators likely focus on Andersons’ top line. Notably, it prints a three-year revenue growth rate of 27.7%, above 92.66% of its peers. Also, its EBITDA growth rate over the same period comes in at 22.4%, above 78.57%. Further, the company’s Piotroski F-Score hits 7 out of 9, indicating decent operational efficiency.
As well, ANDE trades at a price-earnings-growth ratio of only 0.6 times. In contrast, the underlying sector features a median PEG ratio of 1.26 times. Lastly, analysts peg ANDE as a unanimous strong buy. Their average price target lands at $53.33, implying nearly 17% upside potential.
Little-Known Stocks: iHuman (IH)
Billed as a leading childhood “edutainment” company, China-based iHuman (NYSE:IH) is committed to transforming learning into a fun journey for every child. Per its corporate profile, iHuman provides children with unique, interactive, and entertaining learning experiences. The Company’s comprehensive suite of innovative and high-quality products and services caters to the educational needs of kids at school and at home.
Since the beginning of this year, IH gained nearly 17% of its equity value. In the trailing year, it moved up almost 27%. On a financial note, speculators look toward its operational stats. Specifically, its three-year revenue growth rate stands at a mercurial 56%, above 97.77% of the field. Also, its free cash flow (FCF) growth rate during the same frame impresses at 56.1%.
Nevertheless, IH trades at a trailing-12-month sales multiple of 1.09, ranked lower than 67.48% of its rivals. Thus, it’s one of the little-known stocks to focus on. To finish out, Citi’s Michelle Fang pegs IH a buy with a $3.80 price target, implying 27% upside. If you seek potentially viable undiscovered stocks, iHuman could be interesting.
Primarily focused on hydrocarbon exploration – or the upstream component of the energy value chain – Berry (NASDAQ:BRY) focuses on the conventional, long-lived oil reserves in the San Joaquin basin located in California, according to its corporate profile. Unfortunately, due to the soft energy market right now, BRY hasn’t performed that well, losing about 12% of equity value since the Jan. opener. Still, it’s one of the little-known stocks to consider.
Should society fully normalize the impact of the Covid-19 pandemic, Berry may enjoy an outsized total addressable market. Even right now, BRY carries a three-year revenue growth rate of 20.6%, outflanking 72.22% of its oil and gas peers. In addition, its EBITDA growth rate pings at 38.6%, above 76.7%. Also worth pointing out is that Berry features a trailing-year net margin of 29.64%, which outpaces 80% of its rivals. With a Piotroski F-Score of 7 out of 9, it’s also operationally efficient.
To close, analysts peg BRY as a moderate buy with a $9.50 price target (implying nearly 39% upside). Thus, it’s one of the growth stocks to put on your radar.
One of the riskiest ideas among little-known stocks, TaskUs (NASDAQ:TASK) is a provider of outsourced digital services and next-generation customer experience to innovative and disruptive technology companies. Per its public profile, TaskUs helps its clients represent, protect and grow their brands. However, despite these digital relevancies, TASK fell more than 34%, naturally raising alarms.
Still, for those that don’t mind speculating on so-called undiscovered stocks, TaskUs could be enticing. For example, its three-year revenue growth rate clocks in at 36.3%, outflanking 88.87% of its peers. During the same period, its EBITDA growth rate hit 19.8%, above 67.28% of rivals.
Conspicuously, the market prices TASK at a forward multiple of 8. As a discount to projected earnings, TaskUs ranks better than over 94% of the competition. Turning to Wall Street, analysts peg TASK as a consensus moderate buy with a $16.57 price target (implying over 45% upside). Thus, it’s one of the hidden gem stocks to keep close tabs on.
Catalyst Pharmaceuticals (CPRX)
Based in Coral Gables, Florida, Catalyst Pharmaceuticals (NASDAQ:CPRX) is a commercial-stage biopharmaceutical company focused on developing and commercializing innovative therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases. This includes Lambert-Eaton myasthenic syndrome (LEMS), anti-MuSK antibody-positive myasthenia gravis (MuSK-MG), and other neurological and neuromuscular disorders. Although one of the most relevant names among little-known stocks, the market hasn’t given CPRX a fair shake this year.
Since the January opener, shares stumbled a little more than 25%. However, in all fairness, CPRX did almost double in value over the trailing year. Financially, Catalyst lives true to its name, sparking a three-year revenue growth rate of 25.8%, above 71.9% of its rivals. Also, its EBITDA growth rate clocks in at 45.4%, above 88.16%.
Almost as a bonus, the market prices CPRX at a forward multiple of 11.65. As a discount to projected earnings, Catalyst ranks better than 82.14% of the competition. Looking to the Street, analysts peg CPRX a strong buy. Their average price target lands at $22.40, implying almost 66% upside potential.
Digital Turbine (APPS)
Another risky enterprise among little-known stocks, Digital Turbine (NASDAQ:APPS) simplifies content discovery and delivers relevant content directly to consumer devices. According to its corporate profile, the company’s on-demand media platform powers frictionless app and content discovery, user acquisition and engagement, operational efficiency, and monetization opportunities. While pertinent, the market has other ideas, sending APPS down almost 43% since the Jan. opener.
In the trailing 365 days, APPS slipped nearly 51%, implying that investors can’t get out soon enough. Also, in full disclosure, Gurufocus labels Digital Turbine as a possible value trap. That said, it technically features a three-year revenue growth rate of 61.6%, beating out 94.82% of enterprises in the software industry. Also, its FCF growth rate during the same period is 43.7%, above nearly 84%. Despite its operational strengths, APPS trades at a TTM sales multiple of 1.32. This stat ranks favorably below 66.75% of the competition. On a final note, analysts peg APPS as a moderate buy with a $14.33 price target (implying over 66% upside).
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.