There are plenty of underappreciated stocks on the market.
Look at Viking Therapeutics (NASDAQ:VKTX), for example.
When I first highlighted VKTX on June 22, 2023, it traded at just $22 a share. At the time, it was nearing Phase 2 trials, with Phase 1 already showing the VK2735 triggered feelings of fullness in the body, which can help lead to weight loss.
Still, even with that news, the stock was unappreciated. Today, though, as its story and the weight loss treatment boom have become far more popular, VKTX now trades at $63.81 after testing a high of almost $100.
Even now, as we wait for further trial results, the stock is still being underappreciated. This time after it reported favorable Phase 2 results. However, I don’t believe it’ll stay underappreciated for much longer.
I still believe it could push well above $100 a share long term. While VKTX is a great stock to buy and hold, here are other unappreciated stocks to consider.
NewLake Capital Partners (NLCP)
With the cannabis story heating up, real estate investment trusts like NewLake Capital Partners (OTCMKTS:NLCP) are still considered one of the top underappreciated stocks.
With a yield of 8.55%, the REIT owns a portfolio of 31 properties comprised of 14 cultivation facilities and 17 dispensaries. It’s also seeing impressive earnings. In its first quarter, funds from operations (FFO) came in at 50 cents, beating estimates by four cents. Revenue of $12.6 million, up by 10.5% year over year beat by $620,000.
President and CEO Anthony Coniglio also added, “Looking forward, the cannabis industry has much to be excited about following the proposal to reschedule cannabis from Schedule I to Schedule 3, an increase in meaningful dialogue among congressional leaders, and medical to adult-use conversion in Ohio and the Adult-use ballot in Florida.”
With key votes in Florida nearing, and the upcoming presidential election, I’d use the recent pullback in NLCP as a buy opportunity. Plus, while we wait for the cannabis REIT to see higher highs, we can just collect its 8.55% yield.
Digital Realty Trust (DLR)
Another underappreciated REIT to consider is Digital Realty Trust (NYSE:DLR).
With a yield of 3.45%, DLR data centers are essential for our digital world, especially with the rapid growth of artificial intelligence.
Remember, everything that happens online depends on data centers. They operate 24/7 ensuring the continuous operation of essential digital services all over the world. They make it possible for us to interact and do business through our smartphones and computers.
Better, according to Goldman Sachs, data center demand is expected to rise at a 15% CAGR between now and 2030.
Jones Lang LaSalle CEO Christian Ulbrich says there’s soaring demand for data centers with AI. “It’s the hottest asset class at the moment,” he said in a Bloomberg Television interview. “When you believe in AI, the demand for data centers will only go up.”
From its current price of $141.40, I’d like to see the DLR stock race back to $150 initially.
SoundHound AI (SOUN)
At just $4.70 with heavyweight investors behind it, SoundHound AI (NASDAQ:SOUN) is another one of the top underappreciated stocks to buy and hold.
This is the company that provides voice control and audio analytics software to automakers, drive-through restaurants, and other businesses with phone-based menu systems.
Better, one of its biggest investors is Nvidia (NASDAQ:NVDA), which invested about $3.7 million in the company. Even the investment arm of SoftBank (OTCMKTS:SFTBY) invested $2.3 million in the stock. Those investments are on the small side, but it says a lot that industry giants are jumping into the underappreciated name.
Plus, analysts at Wedbush just said SOUN’s latest earnings put its AI momentum “front and center.” The firm added that SOUN is “well-positioned” to capitalize on AI. It also has an outperform rating on the stock, with a price target of $9 a share.
From its current price of $4.70, I’d like to see it initially retest $10.25 last seen in March.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
