Uncovering the next big thing in the stock markets can be akin to finding hidden treasure in the desert. Beyond the household names and Wall Street giants, diamonds are under the sand, poised for exponential growth and remarkable returns. The article explores the stock market’s gems, seven under-the-radar stocks quietly positioning themselves for a meteoric rise.
From tech trailblazers harnessing AI to energy companies revolutionizing their strategies, these companies strategically navigate their industries, innovate at the forefront, and capitalize on unique opportunities.
They may not yet be on every investor’s radar, but their potential is undeniable. These are the under-the-radar stocks that savvy investors should keep a close eye on.
Cogent (CCOI)
Cogent (NASDAQ:CCOI) is strategically positioned to realize substantial long-term benefits from its recent acquisition of the Sprint Wireline Business from T-Mobile (NASDAQ:TMUS). Expanding Cogent’s network infrastructure is one of the most significant advantages of the acquisition. The addition of 18,905 route miles of owned intercity fiber and 1,257 route miles of owned metropolitan fiber has substantially increased the company’s network reach.
Fundamentally, the acquisition brought Cogent an array of new customers, including several Fortune 500 companies. These enterprise-level customers, known for their substantial budgets and intricate network requirements, diversify Cogent’s customer portfolio. This diversification mitigates risk by reducing reliance on any single customer. This makes it one of those under-the-radar stocks.
The extended footprint empowers Cogent to deliver high-speed and reliable internet connectivity to a broader geographic area, encompassing more businesses and consumers. Therefore, as demand for bandwidth continues to surge globally, Cogent’s enlarged network positions it as a key player in meeting this escalating demand, fostering rapid growth prospects.
Northern Oil and Gas (NOG)
Northern Oil and Gas’s (NYSE:NOG) investment cycle is strategically shifting to “harvest mode.”
By front-loading approximately 60% of its capital spending in H1 2023, the company is poised to maximize free cash flow in H2. This transition enhances its ability to return value to shareholders.
Northern Oil and Gas’s focus on operational excellence is evident through its impressive production growth and cost-effective operations. For instance, in Q2 2023, NOG achieved a remarkable 25% YoY increase in average daily production.
Furthermore, Northern Oil and Gas’s efforts to optimize development programs, enhance capital efficiency, and improve returns have resulted in favorable well performance and higher productivity. By working closely with its operating partners, the company has reduced well costs, with average well costs down 6% on an absolute basis and 9% normalized for lateral length.
Thus, its robust growth and efficiency demonstrate the company’s ability to expand its operational footprint. It’s also one of those under-the-radar stocks investors should consider buying in October.
Oddity Tech (ODD)
Oddity Tech (NASDAQ:ODD) attributes a significant portion of its growth potential to its technology-based platform. The company has invested heavily in technology, with its tech team representing over 40% of its talent. This investment has resulted in three primary areas of technological strength: AI, computer vision, and biotech.
Oddity Tech employs AI and machine learning models across various use cases, including marketing, product recommendations, and user experience optimization. The data-driven approach enhances user satisfaction, leading to high repeat rates and strong profitability.
Additionally, the company’s acquisition of Voyage81 has bolstered its computer vision capabilities, allowing it to expand its capabilities with less data rapidly. Computer vision technology is crucial in product matching and enhancing the user experience. Similarly, Oddity Tech’s investment in biotechnology, mainly through acquiring Revela, enables the development of science-backed products.
On the other hand, Oddity Tech is dominant in the online channel, a segment still holding significant untapped potential. As of Q3 2023, online sales account for approximately 25% of the total market, but this figure is expected to rise to 50% in the coming years.
Roblox (RBLX)
Roblox’s (NYSE:RBLX) international growth is a testament to its global appeal. Key geographies such as Germany, Korea, Brazil, India, and Japan have experienced significant YoY growth in daily active users (DAUs), with Japan witnessing a remarkable 107% growth. Also, the introduction of Semantic Search, which improves search functionality, has increased global click-through rates.
Notably, the international expansion aligns with Roblox’s vision of becoming a platform for all ages. The 13-and-over cohort, which is five times larger than the under-13 cohort, is growing at an impressive rate. The ’17 through ’24 cohort also shows strong growth in DAUs and engaged hours. This broad appeal across age groups positions Roblox as a long-term entertainment platform.
On the other hand, Roblox’s developer ecosystem is a vital component of its growth potential. Developers are expected to earn $800 million in 2023, with DevEx payouts reaching $165 million in Q2, a 16% YoY increase. This ecosystem supports various content creators, from top earners making millions to smaller developers earning a sustainable income. Therefore, the diversity strengthens Roblox’s ecosystem and fosters innovation. All in all, it’s one of those under-the-radar stocks to consider.
Crowdstrike (CRWD)
CrowdStrike (NASDAQ:CRWD) is a leading cybersecurity company that has garnered significant attention recently due to its remarkable growth and impact in the cybersecurity industry. While many companies claim to have vast datasets, CrowdStrike distinguishes itself by emphasizing the quality of its data over its sheer quantity.
The company has spent a decade accumulating and annotating threat data, providing a valuable resource for generative AI. This annotated data aids in training algorithms, enhancing their threat detection and prevention efficacy. As a result, this data moat differentiates CrowdStrike from competitors who may have large datasets but need more annotation and context.
Furthermore, CrowdStrike’s early adoption of AI in its cybersecurity approach demonstrates its commitment to staying ahead. The combination of extensive, well-annotated data and AI expertise empowers CrowdStrike to continually improve its threat detection and response capabilities.
Finally, CrowdStrike’s cloud business has experienced substantial growth. Nearly $300 million in annual recurring revenue (ARR) is attributed to modules deployed in the public cloud. This expansion is driven by a mix of factors, including the increased adoption of cloud technology, the need for cloud security, and the versatility of CrowdStrike’s offerings.
UiPath (PATH)
UiPath (NYSE:PATH) is a global Robotic Process Automation (RPA) leader. Its potential hinges on its ability to continuously expand and diversify its customer base. With approximately 10,890 customers (Q2 2024), UiPath has achieved a strong presence in the automation market. The company’s commitment to serving various industries and geographies is evident in its client roster.
Additionally, UiPath is quickly introducing generative AI features thanks to many developers knowledgeable about AI applications. For instance, its new OpenAI connector enables companies to use ChatGPT and associated models to pre-write customer support responses.
Notably, UiPath has successfully onboarded new clients, highlighting UiPath’s ability to win over diverse industries, further strengthening its long-term growth potential. Equally significant is the growth in customers with substantial ARR figures. The number of customers with $1 million or more in ARR, a critical metric for assessing high-value relationships, increased by over 30% YoY to 254. Therefore, this indicates that UiPath is attracting large enterprises and deepening its engagement with them over time.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) is a company with a promising future. It is driven by its fundamental strengths in the field of robotic-assisted surgery. One of the most critical indicators of Intuitive Surgical’s long-term potential is its procedure growth.
In Q2 2023, the company reported an impressive 22% growth in procedures, reflecting the increasing adoption of Intuitive Surgical’s robotic systems by healthcare facilities and surgeons worldwide.
Breaking this down further, the company experiences specific areas of strength. It includes general surgery and gynecology for benign conditions, particularly in the US. General surgery, including cholecystectomy and hernia repair, is a growth leader. Also, the growth in colon and rectal procedures is another encouraging sign.
Looking forward, Intuitive Surgical’s growth is not limited to the US. For instance, in Q2, the company saw a recovery in China and continued strength in Japan, Germany, and the UK. China, in particular, is a critical market, and Intuitive Surgical’s ability to grow in this market demonstrates its adaptability. This makes it one of those under-the-radar stocks to buy.
On the date of publication, Yiannis Zourmpanos did not hold (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.