3 Off-the-Beaten-Path Stocks Poised for Substantial Growth
As horror film fans know, there’s safety in numbers but robust profitability may be more closer to the domain of uncommon stocks to buy for growth. Don’t get me wrong – if you find yourself facing the market equivalent of a hockey-mask-wearing villain, you should probably consider the tried-and-true strength-in-numbers narrative. However, if you want to be the star of the show, you can’t play it too safe.
In a nutshell, when too many people bet on the same horse, a higher probability exists that the outcome may disappoint. Or to use another example, consider a theoretical matchup between the San Francisco 49ers and the New England Patriots. Everyone would bet for the Niners, which is why bookies won’t give you a straight-up wager. The same goes for niche stocks.
In exchange for the unpredictable nature of uncommon stocks to buy for growth, should your bet pay off, it will likely do so quite handsomely. However, if you go with the surefire wager, you’d have to put in a lot of money to get the same reward.
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Make sense? Good. Here are the niche stocks that enjoy robust upside potential.
Ouster (OUST)
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What it is: A technology firm specializing in digital lidar sensors, Ouster (NYSE:OUST) offers an enticing idea among uncommon stocks to buy for growth. That’s because there’s nothing uncommon about the underlying lidar industry, which offers the potential for undergirding advanced innovations such as autonomous driving platforms. However, OUST only carries a market capitalization of $239.3 million, making it a lesser-known high-risk, high-reward asset.
Relevance: Again, we’re talking about an enterprise that doesn’t get as much airtime as the usual suspects in the technology space. When you think about autonomous driving, you might consider Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). Still, keep in mind that Ouster only needs to grab a relatively small piece of the global lidar pie, which featured a valuation of $1.81 billion last year, to potentially be relevant.
Pros: Simply, you’re looking at a projected compound annual growth rate (CAGR) of 9.8% from last year to 2030 for the global lidar sector. Also, analysts rate OUST a moderate buy with a $9 price target, implying 53% upside.
Cons: Like any innovative sector, Ouster suffers from volatility risks. Specifically, other lidar-related niche stocks have stunk following initial enthusiasm.
TPI Composites (TPIC)
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What it is: A U.S. based industrial manufacturer, TPI Composites (NASDAQ:TPIC) focuses on advanced composite solutions for various applications including aerospace. Per its website, the lightweight and durable materials that TPI produces aligns well with infrastructure developers. For example, the company has built over 90,000 wind blades for renewable energy turbine systems.
Relevance: More than likely, you probably haven’t heard of TPIC as it’s one of the uncommon stocks to buy for growth. At the moment, the company carries a market cap of just under $88 million. That places TPIC well into micro-cap territory. However, because it offers critical products to emerging industries such as renewable energy infrastructures, investors can better trust TPI compared to many other speculative enterprises.
Pros: Because of its ultra-low market value, if TPIC hits its upside target, gamblers would be off to the races. Notably, analysts peg shares as a moderate buy with a $4.93 price target. That calls for upside potential of nearly 139%.
Cons: Volatility, volatility, volatility. Since the start of the year, TPIC cratered 79%.
Verastem (VSTM)
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What it is: A biotechnology firm, Verastem (NASDAQ:VSTM) specializes in targeted cancer therapies. More to the point, Verastem focuses on RAS-pathway-driven cancers, which are highly aggressive and often recur. Sadly, patients rarely experience optimal outcomes and that’s where Verastem comes in. A huge unmet need exists, which could make VSTM one of the holistically positive niche stocks.
Relevance: Obviously, the broader field of oncology commands significant attention due to the impact to the human condition. However, Verastem ranks among the uncommon stocks to buy for growth because it aims to provide hope in an otherwise hopeless situation. Further, Roots Analysis states that RAS-targeting therapies may grow at an annualized rate of over 50% till 2031. If so, that would symbolize possible massive upside for VSTM.
Pros: While the company is speculative with only a market cap of $181 million, Verastem attracts analysts’ attention. Right now, VSTM commands a unanimous strong buy view with a $27.92 average price target. That implies over 289% upside potential.
Cons: The advanced biotech field carries tremendous volatility risks. As evidence, VSTM hemorrhaged more than 85% of equity value over the past five years.
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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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