Stay Ahead of the Crowd by Buying These 2 Stocks Before Everyone Else

In order to achieve market-beating returns, you may have to find opportunities in areas where the bulk of the market isn’t looking.

| More on:
data analyze research

Image source: Getty Images

Many stocks tend to fly under the radar of the broader market. They may be new or financially uncertain, making investors wary. But even if the reasons most investors ignore a stock are legitimate, that doesn’t mean they don’t have long-term value.

Many under-the-radar stocks have the potential to break out big, and if you bet on them when they are being ignored by the rest of the market, you may be able to capitalize on the full bullish trend.

These may not be like the steady, low-volatility stocks you might be comfortable with, and you have to develop a healthy risk appetite to invest in them. But the reward may be proportionally attractive.

A materials stock

The first thing you should know about Ivanhoe Electric (TSX:IE) is that the name is misleading. It’s a mineral exploration and development company based in the U.S. that applies cutting-edge technologies for the discovery of metals and minerals associated with electrical transmission and storage.

It leverages a proprietary technology called Typhoon, which the company markets as one of the most accurate Geophysical survey technologies currently in existence. It allows for the detection of water, oil, and minerals with traces of conductive metals as deep as 1.5 kilometres under the surface, which may often be missed by conventional surveys.

This proprietary technology can be instrumental for a range of mining and exploration companies, including battery metal extraction companies. The company has access to a wide range of exploration projects in the United States. The business model and especially the technology make it an intriguing business that might still be flying under the radar, because it’s new.

The stock has only started trading on the TSX in June 2022 and, so far, has risen about 64.5%. Assuming it keeps growing at this pace, it can easily help you double your capital in a couple of years.

An investment management company

Sprott (TSX:SII) is a name you would have come across if you invest in or are interested in precious metal exchange-traded funds (ETFs) and other funds. The company was originally rooted in precious metal funds and still has several precious metal bullion funds, ETFs, and equity funds in its portfolio. But the company has expanded its offerings to include energy transition metals like uranium and focuses on battery metals like lithium.

The precious metal focus, especially the gold funds it manages, can be a fluctuating entity. The demand for gold-related investments has risen in almost all shaky markets, but the energy-related funds and investment vehicles might experience a bullish long-term phase.

The world is already going through a major energy transformation, and if Sprott can leverage it, the stock may offer much more than the 71% it did in the last five years. The dividends at a 2.59% yield are another reason to consider this company.

Foolish takeaway

The two stocks may be on the verge of a breakout and enter a bull market phase, especially if big money starts moving in. If you buy now when the stocks are still mostly undetected, you can ride the potential bullish phase from the beginning. But the opposite is also true, and you may have to hold a stagnant or weakening stock for quite a while before it goes up or you decide to cut your losses.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Target. Stand out from the crowd
Dividend Stocks

RRSP Pension: 2 Dividend Stocks to Buy on the Latest Dip

These high-yield TSX stocks look cheap right now for RRSP investors.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Safe and Sound Stocks for Canadians: My Top 5 Choices

Five safe stocks to buy on a market pullback.

Read more »

5G chip
Dividend Stocks

8.86% Dividend Yield! I’m Buying This TSX Stock and Holding it for Decades

The TSX is a gold mine of lucrative dividend stocks trading near their multi-year low. An 8.86% dividend yield is…

Read more »

green power renewable energy
Dividend Stocks

Brookfield Infrastructure vs. Brookfield Renewable: Which Brookfield Stock is a Better Buy?

Both Brookfield Infrastructure (TSX:BIPC) and Brookfield Renewable (TSX:BEPC) are dividend income earners trading at a discount, but which stock is…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

Cash Kings: 3 TSX Stocks That Pay Monthly

These Canadian stocks reward their shareholders with regular monthly dividends and a high yield.

Read more »

Happy retirement
Retirement

3 Stocks Retirees Should Absolutely Love

Retirees aiming for a solid mix of capital gains and dividend returns should consider these three stocks.

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Passive Income: Top TSX Dividend Stocks to Buy for 7% and 8% Yields

These top TSX dividend stocks look undervalued and now offer high yields for investors seeking passive income.

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

TFSA 101: Earn $500 Per Month Tax-Free

Here's how a covered-call ETF plus a TFSA can help you create a lucrative monthly passive-income stream.

Read more »