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3 Not-So-Famous Stocks That Deserve The Spotlight
Popularity is a deceiving thing. People or products that are labeled as well-known or popular are often mistaken for being successful as well. The same theory applies to stocks, but at the end of the day, there is little empirical evidence to suggest that a bevy of headlines translates to superior returns for investors. If anything, it's the other way around as the traditional financial media often enjoys focusing on bearish stories.
The good news is that the stock market isn't high school; in other words, popularity doesn't count. There are plenty of stocks out there that most people haven't heard of, but this doesn't mean these are candidates for shorting. In fact, not being the most popular kids at the party can often lead to solid returns for the right stocks. Let's take a look at a few such names here.
IN PICTURES: Baby Buffett Portfolio: His 6 Best Long-Term Picks
Helen of Troy
When it comes to companies that make stuff like shampoo, deodorant and other personal care items, Colgate-Palmolive (NYSE:CL) and Dow components Johnson & Johnson (NYSE:JNJ) and Procter & Gamble (NYSE:PG) are the headline dominators. But don't overlook Helen of Troy (Nasdaq:HELE). All four stocks are up in the past six months, but Helen of Troy is the leader of the pack by a wide margin.
Helen of Troy recently acquired the Pert and Sure brands from Innovative Brands, a move that will add $65 million to the company's top line. While Helen of Troy shares have nearly doubled in the past year, they trade at a reasonable valuation, about 10 times forward earnings and roughly 1.5 times book value, and that is actually cheaper than all three of the company's larger competitors that we mentioned here.
Hibbett Sports: A Sporty Growth Story?
Like Helen of Troy, Hibbett Sports (Nasdaq:HIBB) has its fair share of bigger competitors like Dick's (NYSE:DKS) and Foot Locker (NYSE:FL) and like Helen of Troy, Hibbett has sharply outperformed its larger rivals over the past six months. Alabama-based Hibbett recently reported sterling fourth-quarter results that saw profits rise by 55% helped by a 13% increase in sales. Hibbett says it expects to earn between $1.12 and $1.30 a share for fiscal 2011 while the consensus estimate is $1.18 a share.
As a regional player in the world of sporting goods and team merchandise, Hibbett got a lift when the New Orleans Saints won the Super Bowl and the University of Alabama won the BCS Championship. At least one analyst thinks Hibbett's fiscal 2011 estimates are on the conservative side and that may mean there is more pop left in this stock. The shares trade at 18 times forward earnings and 4.3 times book value.
Winning the Popularity Contest
Given its robust daily volume, which is over 4.7 million shares, it's hard to say investors haven't taken note of Skyworks Solutions (Nasdaq:SWKS), a maker of semiconductors. Like the other companies we've highlighted here, Skyworks operates in an industry dominated by larger, more noteworthy competitors, but in the past six months, the company has performed in line with the Nasdaq and Intel (Nasdaq:INTC).
The company recently boosted to its fiscal second-quarter earnings guidance, saying it expects to earn 22 cents to 23 cents a share, above the consensus estimate of 21 cents a share. The company also expects revenue of $230 million to $235 million, above the average analyst estimate of $225.7 million. While Skyworks shares are up 100% in the past year, the stock may still be worth a look if the Nasdaq continues to lead the broader market higher.
Can You Pick Just One?
None of the three names we highlighted here offer dividends, so capital appreciation is the name of the game. Each of the three offers a valid, yet different thesis. If defensive issues come back into vogue, then Helen of Troy stands to benefit. If retail stocks ascend, Hibbett is likely to join them. If tech continues to rally, expect Skyworks to do the same. (For more, check out Speed Read SEC Filings For Hot Stock Picks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
The good news is that the stock market isn't high school; in other words, popularity doesn't count. There are plenty of stocks out there that most people haven't heard of, but this doesn't mean these are candidates for shorting. In fact, not being the most popular kids at the party can often lead to solid returns for the right stocks. Let's take a look at a few such names here.
IN PICTURES: Baby Buffett Portfolio: His 6 Best Long-Term Picks
Helen of Troy
When it comes to companies that make stuff like shampoo, deodorant and other personal care items, Colgate-Palmolive (NYSE:CL) and Dow components Johnson & Johnson (NYSE:JNJ) and Procter & Gamble (NYSE:PG) are the headline dominators. But don't overlook Helen of Troy (Nasdaq:HELE). All four stocks are up in the past six months, but Helen of Troy is the leader of the pack by a wide margin.
Helen of Troy recently acquired the Pert and Sure brands from Innovative Brands, a move that will add $65 million to the company's top line. While Helen of Troy shares have nearly doubled in the past year, they trade at a reasonable valuation, about 10 times forward earnings and roughly 1.5 times book value, and that is actually cheaper than all three of the company's larger competitors that we mentioned here.
Hibbett Sports: A Sporty Growth Story?
Like Helen of Troy, Hibbett Sports (Nasdaq:HIBB) has its fair share of bigger competitors like Dick's (NYSE:DKS) and Foot Locker (NYSE:FL) and like Helen of Troy, Hibbett has sharply outperformed its larger rivals over the past six months. Alabama-based Hibbett recently reported sterling fourth-quarter results that saw profits rise by 55% helped by a 13% increase in sales. Hibbett says it expects to earn between $1.12 and $1.30 a share for fiscal 2011 while the consensus estimate is $1.18 a share.
Winning the Popularity Contest
Given its robust daily volume, which is over 4.7 million shares, it's hard to say investors haven't taken note of Skyworks Solutions (Nasdaq:SWKS), a maker of semiconductors. Like the other companies we've highlighted here, Skyworks operates in an industry dominated by larger, more noteworthy competitors, but in the past six months, the company has performed in line with the Nasdaq and Intel (Nasdaq:INTC).
The company recently boosted to its fiscal second-quarter earnings guidance, saying it expects to earn 22 cents to 23 cents a share, above the consensus estimate of 21 cents a share. The company also expects revenue of $230 million to $235 million, above the average analyst estimate of $225.7 million. While Skyworks shares are up 100% in the past year, the stock may still be worth a look if the Nasdaq continues to lead the broader market higher.
Can You Pick Just One?
None of the three names we highlighted here offer dividends, so capital appreciation is the name of the game. Each of the three offers a valid, yet different thesis. If defensive issues come back into vogue, then Helen of Troy stands to benefit. If retail stocks ascend, Hibbett is likely to join them. If tech continues to rally, expect Skyworks to do the same. (For more, check out Speed Read SEC Filings For Hot Stock Picks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Todd Shriber
Todd Shriber was a financial journalist for five years with Bloomberg News and MergerMarket.com, covering a variety of sectors, including energy, financials and technology. He is also a Series 7 license holder and has actively traded equities, forex and options.
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