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The recent market decline has created more opportunities for investors to pick high-quality, little-known stocks. That includes blue-chip stocks that have lost value since the start of the year. It is true that companies that are not in the limelight are riskier than larger companies. Still, the value of little-known stocks cannot be ignored as the market recovers over time.
In addition, a key problem with well-known stocks is that large institutional investors are actively buying. Institutional investors also have the liquidity to keep piling on failing stocks and reap the rewards later. This is why investing in little-known stocks can be very rewarding as they are likely not on the radar of institutional investors.
The low profiles of lesser-known stocks can be a huge advantage in the current market conditions. However, it is important to do your due diligence before betting on such stocks. You wouldn’t want to catch the falling knife, which is probably what many investors are doing right now. Keep these little-known stocks in mind as you explore your options.
Premier Financial (PFC)
Premier Financial (NASDAQ:PFC) is a regional bank headquartered in Ohio that operates close to 12 loan offices and 74 branches across the United States. Although the company has had to adjust to an environment of rising interest rates, its long-term case remains intact as its stock is poised for strong gains going forward.
It is imperative for regional banks like PFC to have higher loan balances on their books. Loans and deposits grew healthy in the second quarter, grew to $494.1 million, up 35.7% from the second quarter last year. In addition, commercial mortgages performed exceptionally well, while residential loans also grew by 37.8%. Overall, despite the interest rate shock, demand for loans remained strong.
With more funds to lend to consumers, the bank will be able to lend at much higher interest rates in the second half of 2023. Moreover, an investment in PFC shares gives wonderful returns dividend yield over 4.42%which is hard to let go of at this point.
CarParts.com (NASDAQ:PRTS) is an e-commerce platform specializing in aftermarket auto parts and accessories in the US and the Philippines. His commitment to innovation, financial discipline and customer service has helped him post incredible numbers over the past few quarters. Of course, its business is under pressure from current inflationary pressures, but overall it has navigated the headwinds well.
Published PRTS record revenue of $176.2 million in the second quarter, which is 12% more than the previous year. He represented 10th exactly a quarter of double-digit revenue growth, with adjusted EBITDA of $8.3 million. The company’s management remains committed to improving operations and a more customer-oriented approach to business.
Therefore, the company’s long-term outlook remains favorable. Its ability to grow during these difficult times is heartening and a testament to its exceptional long-term position. Furthermore, its stock trades at just 0.47x sales in 12 monthsmore than 25% lower than the 5-year average.
PubMatic (NASDAQ:PUBM) is a successful sell-side advertising company that, despite strong performance, is missing the radar. Over the years, he has built an impeccable financial profile that provides investors with strong returns. It increased sales in the second quarter by an incredible 27% from the period of the previous year to 63 million dollars, well ahead of analysts’ estimates of $60.7 million.
Additionally, the numbers came in well ahead of management’s guidance of $60 million to $62 million, which is a great start given the challenging macroeconomic conditions. Although he was forced to lower his full-year outlook, he still expects it to significantly beat analysts’ estimates.
As publishers grow revenue from PubMatic and attract more customer spend, it allows the platform to improve using the wealth of data coming in. The platform’s performance and access to the audience and inventory of leading publishers strengthen its long-term case.
As of the date of publication, Muslim Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are the subject of InvestorPlace.com Publishing Guidelines.