The Stealth Wealth Portfolio: 3 Stocks Flying Under the Radar
Certain stocks seem to get all the attention in the media and online message boards. Amazon (NASDAQ:AMZN) and GameStop (NYSE:GME) anyone?
This is a shame because in reality, hundreds of stocks quietly outperform the market on a consistent basis without getting much analyst mention. The reasons for the oversight are many.
The media and online peanut galleries tend to focus on large cap stocks, companies that are household names, and shares that are widely held. Also, stocks with unusual and big price movements tend to attract the spotlight. Smaller stocks of Steady Eddie companies whose share prices rise consistently over time tend to largely fly under the radar or get drowned out by the noise.
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And yet, it is worth it for investors to find these compounders. Let’s look at the stealth wealth portfolio including three stocks of consistency and value.
U-Haul Holding Co. (UHAL)
Source: Sundry Photography / Shutterstock.com
Just how unnoticed is U-Haul Holding Co. (NYSE:UHAL)? Only one analyst offers a price target on the stock.
This is a bit surprising given that U-Haul is a well-known national brand. In business continuously for nearly 80 years, it has annual revenues over $4.5 billion. However, the lack of attention on Wall Street hasn’t seemed to hurt UHAL stock. Over the past 12 months, the share price has gained 16%, and it is up 105% over the last five years. The stock has more than tripled since 2014.
While U-Haul’s do-it-yourself moving business isn’t high-tech or sexy, the company dominates the industry in the U.S. and Canada with 23,000 locations and nearly 200,000 rental trucks. It’s the type of business that could do extremely well as interest rates come down and the economy strengthens. Also, UHAL, which continues to be run by the founding Shoen family, is expanding in the self-storage business.
Barron’s magazine named UHAL one of its top picks for 2024, noting the attractive valuation. And analysts say the company would make a great acquisition target for Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B).
Thomson Reuters (TRI)
Source: Shutterstock
Thomson Reuters (NYSE:TRI) is a media company worthy of some headlines. It’s true that newspapers around the world continue to close due to lack of advertising and subscription revenue. But, TRI’s newswire service is becoming increasingly necessary and dominant around the world.
As a result, the company continues to issue strong earnings reports, and its stock is trading near an all-time high. All while flying largely under the radar of the financial press of which it is a part.
Further, the stock is up 20% over the last 12 months and has gained nearly 200% in the past five years. In November, the company reported a third-quarter profit that topped analysts’ forecasts. Thomson Reuters announced earnings per share (EPS) of 82 cents, well above analysts’ forecasts of 71 cents. Revenue grew 1% in Q3 to $1.59 billion, which was slightly below consensus forecasts of $1.61 billion.
Yet, revenue in the company’s news division rose 3% driven by growth in digital advertising. Additionally, Thomson Reuters announced plans to spend $10 billion to bolster its artificial intelligence (AI) capabilities.
Deckers Outdoor (DECK)
Source: shutterstock.com/Piotr Swat
Move over Nike (NYSE:NKE), there’s a new running shoe king in town. Deckers Outdoor (NYSE:DECK) continues to run hot due to exceptional earnings driven by sales of its increasingly popular Hoka running shoes.
In the last 12 months, DECK stock has risen 73%, bringing its five year gains to 452%. Compare that performance to the stock of Nike, down 12% in the last year and up only 40% since 2019. And yet, Deckers Outdoor continues to fly under the radar.
The stealthy outperformance of DECK stock comes as the company, which also makes Teva sandals and Ugg boots, issues stellar quarterly earnings. The company reported Q3 EPS of $6.82, which was well ahead of the $4.40 forecast on Wall Street. Revenue in the quarter rose 25% year over year (YOY) to $1.09 billion, which topped the consensus estimate of $960.62 million. Also, Deckers report that its direct-to-consumer (DTC) sales grew 38.8% to $331.7 million, while its wholesale sales rose 19.4% during Q3.
This is a best-in-class shoe company that has also quietly become a major growth security despite being a stock flying under the radar.
On the date of publication, Joel Baglole held a long position in DECK. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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