Add These Under-The-Radar Stocks To Your Shopping List Now
Given the recent weakness in many of the former market-leading stocks, it might make sense to start focusing on lesser-known names. After all, with so many different companies and sectors to choose from, there’s always a bull market to be found somewhere. It can also really pay off to add shares of a company before it becomes a household name, as getting in before the herd can lead to truly massive gains.
By doing your research and staying ahead of the curve, you can put yourself in a great position to uncover the equity market’s diamonds in the rough. We've done a lot of the heavy lifting for you and compiled an overview of several lesser-known stocks showing relative strength that have bright business prospects going forward.
Here are 3 under-the-radar stocks to buy now:
1. Arista Networks
Most tech and growth-oriented investors understand the upside with companies that offer cloud computing products and services. However, since there are so many different cloud stocks to choose from some of the strongest performers go entirely unnoticed.
Arista Networks (NYSE:ANET) is a good example, as it’s a leading supplier of cloud networking solutions that use software innovations to address the needs of large internet companies, cloud service providers, and enterprise data centers.
In short, Arista offers cutting-edge networking products powered by its proprietary Extensible Operating System software that helps to keep the cloud afloat.
Investors should note that Arista recently delivered strong Q3 earnings including revenue of $748.7 million, up 23.7% year-over-year, and provided an upbeat fourth-quarter outlook that sent shares soaring to new highs.
The fact that the post-earnings gap has not been filled suggests that higher prices are in store for this leading cloud stock. It’s also worth noting that the company recently underwent a four-for-one stock split, which could attract new investors going forward.
Consider adding this under-the-radar cloud play for exposure to next-generation networking changes like 400G and more.
2. BJs Wholesale Club Holdings
Consumer staples stocks are looking more and more attractive after some of the recent moves down in high-flying growth names, and BJs Wholesale Club Holdings (NYSE:BJ) is a lesser-known option in that space that is absolutely worth considering.
The company is a leading warehouse club operating in the eastern United States similar to big-box retailers like Costco (NASDAQ:COST), which means this is a company that investors can rely on to deliver strong sales quarter after quarter.
The membership warehouse business model has been extremely successful in recent years, and with inflation fears dominating the headlines these days it’s easy to envision BJs continuing to outperform in the coming quarters.
BJs generates the majority of its revenue from membership fees, and the company’s stated goal is to consistently deliver 25% or more savings on a basket of manufacturer-branded groceries compared to the company’s supermarket competitors. These savings keep customers coming back for more, which has helped BJs develop a loyal membership base.
The company recently announced that its first-year renewal rates remain at historic levels, while BJs Q3 earnings per diluted share grew by 4.5% year-over-year to reach $0.92. Investors should also note that the company’s digitally-enabled sales growth was 44% in Q3, which tells us that the company’s e-commerce offering is firing on all cylinders.
3. Masco Corporation
Housing stocks have been strong performers this year, and Masco (NYSE:MAS) is probably one of the strongest options you haven’t heard of. It’s one of the world’s leading makers of faucets, coatings, and other consumer brand-name home improvement and building products, which means the company has been thriving during the pandemic as homeowners look for new lodgings or spend big to improve their living spaces.
While it's true that Masco is dealing with some supply chain disruptions and inflation issues, the company has been improving its cost structure and delivering strong quarterly earnings in 2021 that should reassure investors.
In Q3, Masco reported revenue of $2.2 billion, up 11% year-over-year, and reiterated its full-year midpoint EPS guidance of $3.70, which would represent a 19% year-over-year jump.
When you consider how strong the housing market is and how tight the supply has gotten, it’s easy to recognize why Masco is an attractive buy. The stock is currently trading around its all-time highs and a move above $69 would be very constructive.