Home Markets Below-the-Radar Stocks Is Where the Smart Money’s Going

Below-the-Radar Stocks Is Where the Smart Money’s Going

1832
0
SHARE

Buy low, sell high, the age-old, proven, formula to maximize the money you make on investment works can take forever to pay off.

That’s why we prefer maximal, faster, rewards that come from “buy low at the right time” investing instead.

These three stocks are already attracting quiet accumulation from smart-money flows, and they all look ready to deliver gains in 2018 that are going to pile up faster than anything Facebook promises.

Not a one of them is a household name. Yet. But we see them all on the ultimate list of 2018’s best stocks:

Oxford Industries (NYSE: OXM)

Teal and orange shirts with palm trees, pink and green dresses with flowers—it’s the look of the rich on vacation, and Tommy Bahama and Lily Pulitzer own it. That’s why Atlanta, Georgia’s, own Oxford Industries outclasses the pack in the clothing business. New York, LA, and London aren’t keeping up. It’s true 2018 hasn’t been a particularly good year for the industry, but while others struggle, Oxford continues to earn net profits 100% higher than the industry average according to S&P Global Markets analysts. Same goes for its cash flow from sales, and its return on capital beats the industry by 74%. Analysts expect next year’s earnings to jump 25% from 2018.

It seems that Oxford has everything going right for investors who want to take a look-in now. Thanks to an earnings miss last quarter, the stock is at a nice price now. Some of that was weather, some of it calendar, and all of it fleeting. Because Oxford’s sales prominence is right back on track. Best of all, the company owns 166 Tommy Bahama stores. And like Lily Pulitzer, they are strongly concentrated in places where the moneyed class with time to browse shop between lunch and pre-dinner martinis. That adds a margin of safety most retail brands don’t possess. In addition to its flagship Tommy and Lilly brands, Oxford licenses other strong lines including Kenneth Cole, Geoffrey Beene, and Cole Hahn. It also designs and markets the value-priced Billy London brand and the very hip, fast-selling Strong Suit menswear brand carried at stores like Nordstrom and Saks.

Square, Inc. (NYSE: SQ).

This stock has a special feature that keeps the timid and not-so-bold investors at bay for now. It has already doubled in the past year. But passing it up while it’s on such strong momentum would likely prove a big mistake. Like walking away from Facebook when it was a wildly successful $60 stock and missing its rise to a $200 stock in the next three years. That’s the kind of potential we see here. Square is on the square, and it’s truly on the move.

Square is a credit card payment operator that has recently expanded its services. That’s why the burst of life this year, because the new services portend enormous growth potential. Sales in 2019 should be 40% higher than this year. That’s an impressive feat for a company that already holds a strong position in its industry. But it comes with even better news. Because certain fixed costs are already covered, increases of that size are like pouring rocket fuel on earnings. Next year’s earnings should be 76% higher than this year’s. And in 2020 the trend should continue to deliver a 187% increase over this year’s expected earnings.

With mega-companies like Visa and MasterCard in this space, how did Square horn in and put itself on a firm footing for growth like this? It found a niche. At the time of its 2015 IPO, Square was focused on small customers, processing micropayments. Now, according to Credit Suisse, since its 2015 IPO SQ’s product suite has expanded dramatically and now “includes various vertically-focused POS software offerings (most recently in the restaurant space), a marketplace for third-party applications, specialized hardware products, and a growing list of ancillary services such as gift cards, invoicing, CRM solutions, analytics, and payroll. Additionally, the April acquisition of web-developer platform Weebly provides SQ with an omni-commerce capability and an installed base of 625k paying subscribers. In addition to this robust merchant platform, the consumer side of the SQ platform is also expanding. Built around Cash App, consumer products and services include P2P, bill pay, a Bitcoin wallet, a linked debit card and customer-offers.”

The stock is showing strong momentum—as it should because the company is definitely expanding, increasing earnings, and making its mark. There’s a short under-the-radar moment here today while investors ponder the stock’s recent gains and volume has calmed down.

Flex Ltd. (NASDAQ: FLEX)

Flex is the kind of stock you aren’t likely to hear about over drinks at the bar. It’s a contract manufacturer for electronic components. Its clients are other manufacturers. And its competitors are other companies in the business like Jabil Circuits, Hon Hai Precision Industries, Sanmina and IPG Photonics. They’re not barstool chitchat fodder, either.

FLEX makes printed circuit boards and flexible circuits. It offers other companies a whole range of services such as systems assembly and manufacturing, logistics, after-sales services, design, engineering, and original design manufacturing.

That’s the boring part. The excitement lies in FLEX’s dominant position in an industry that has just begun a substantial turnaround. Electronics manufacturing suffered a downturn in 2016 and 2017. It appears that 2018 is the comeback year, but the hordes of investors are still sitting on the sidelines.

That makes FLEX a classic buy-low candidate. Even though, thanks to a large drop in June, the stock now sits more than 20% off its 52-week high, momentum is building. Money flow into the stock is strongly positive on increasing volume. This is a sign of the smart money taking advantage. Rank and file investors aren’t aboard yet, but on a $15 stock probably headed to $25 in the next year, you have to be glad they’re off sunbathing somewhere.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of invictusnews.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. Invicutus News and the writer have no position in any of the stocks mentioned. To read our full disclosure, please go to:disclosure policy