Call them secret stocks or hidden gems. While the media tends to trumpet the same stocks repeatedly, plenty of stocks get almost zero notice. And, often they are crushing the broader market and helping to make their shareholders wealthy.
Investors need to explore these securities and add them to their portfolios if they hope to achieve long-term growth. This may require looking off the beaten path and tuning out the noise on TV and online message boards. Growth stocks are ripe for the picking, so let’s take a look at three such picks poised for massive growth.
Constellation Software (CSU)
Maybe its because the company’s founder and president Mark Leonard is a enigma who keeps a low profile. Or maybe its because the company doesn’t hold earnings calls with analysts and shareholders. Whatever the reason, Toronto-based Constellation Software (TSE:CSU) appears set for massive growth in coming years.
In fact, Constellation Software is already a powerhouse growth stock. CSU stock has gained nearly 60% in the past 12 months and is currently trading at an all-time high. Over the last five years, the share price has risen 284%. And, the stock has grown a staggering 1,473% in the past decade. Constellation Software focuses on buying software companies that have strong management teams, consistent earnings, and a track record of growing profits.
The business model and stock performance has drawn comparisons to Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), another holding company with a similar approach. CSU has been upgraded by numerous analysts, including RBC Capital Markets (NYSE:RY). It raised its price target on the CSU shares to $3,900 from $3,400 and maintained a buy equivalent rating. Constellation’s stock has never split. However, rumors are circulating that it could finally do so later this year.
Super Micro Computer (SMCI)
Perhaps it’s because it is a mid-cap stock that trades on the Russell 2000 index, but Super Micro Computer (NASDAQ:SMCI) is definitely an overlooked security.
Consider that SMCI stock has gained 327% in the last year and is up nearly 2,200% in the past five years. With these kinds of returns, you’d think analysts would be pounding the table on Super Micro Computer.
The red hot run in SMCI stock is due to an agreement with Nvidia (NASDAQ:NVDA) to produce artificial intelligence (AI) servers for the chipmaker. In business since 1993, high-performance servers for the technology industry is Super Micro Computer’s bread and butter. And business is expected to boom in coming years as demand for AI servers grows significantly. Owing to the rising demand, SMCI’s recent earnings prints have toppled Wall Street forecasts.
Salesforce (CRM)
It may not be the most overlooked growth stock on the market. After all, cloud-computing giant Salesforce (NYSE:CRM) has gained 80% in the last 12 months and was the top performer in the Dow Jones Industrial Average in 2023.
Yet, CRM stock has not gotten the same amount of attention as other tech stocks, especially those that are part of the Magnificent Seven. However, expectations continue to run high for Salesforce and its stock.
Analysts at Baird investment firm just upgraded CRM stock to a buy from hold and lifted their price target on the shares to $300 from $240, implying 11% upside from current levels. Baird credited its upgrade to improving profit margins at Salesforce and the fact that the stock’s valuation is at historic lows. CRM stock jumped 10% higher after the company issued Q3 results in November that beat Wall Street forecasts. Additionally, the company is buying back $10 billion of its own stock.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
