One of the reasons why independent stock research is a good idea instead of just following stock news is that not all great stocks get the spotlight they deserve. Several hidden gems, many with well-established performance potential, slip through the cracks. If you want to give your portfolio an edge, it might be a good idea to track such stocks and, when the time and price are right, add them to your portfolio.
A capital market company
Partners Value Investments (TSXV:PVF.UN), with its market capitalization of $5.1 billion, is one of the largest securities currently trading on the junior exchange. It’s an investment partnership with most of its capital invested in Brookfield Asset Management, in which the company has a 9% stake. The company is also exploring other investment options.
While not a rapid grower, PVF is growing at a decent pace, at least for the last five years. The market crash was rough for the company, and the stock fell over 40% at its worst, but it started recovering at a powerful pace and has grown almost 59% in the last 12 months alone. The five-year CAGR of 20% can add a decent bit of growth to your portfolio.
A drilling company
Mineral drilling and drilling for water is a niche market, and France-based Foraco International (TSX:FAR) is the third-largest player in this market. The company offers routine mining services (for both water and mineral extraction) as well as case-specific solutions and has undertaken projects in 22 countries across the globe. The company has an impressive drilling fleet.
The company peaked right after the Great Recession, and, in the course of fewer than four years, the stock grew well over 1,300%. After its decline from its 2012 peak, the stock fell below $1 per share, and it couldn’t break through this threshold till 2021. In the last 12 months, the stock has grown almost 290%, and it’s still moderately overpriced. If the company is gearing up for a growth phase like 2008-2012, now might be a perfect time to buy it.
A new software company
Topicus (TSXV:TOI) is a Toronto-based software company that has only just started trading on the junior exchange (Feb. 2021) and has already grown 100% from its inception. It emerged when Constellation Software bought a Netherland-based vertical software provider by the name of Topicus and spun it out (along with another operating group).
This gives Topicus a powerful pedigree. The company recently announced its second-quarter results, and it’s already moving in the right direction. It saw a 54% revenue growth and a substantial increase in net income. The company also completed a few acquisitions, and they have been absorbed into the fold, unlike Total Specific Solutions, formerly a business group of Constellation that exists as one of the companies inside the Topicus group.
While none of the three companies offer dividends, all three companies offer decent capital appreciation potential. If they keep growing at their current pace, they can contribute a lot to the overall growth of your portfolio. You might consider buying them now or wait till they become undervalued stocks and are trading at a more attractive price.