“The person that turns over the most rocks wins the game,” prominent investor Peter Lynch famously said regarding investing.
This basically means that investors need to do a lot of digging and research in order to find quality stocks in which to invest their capital. Clearly, it’s not enough to follow the herd on Wall Street or jump on bandwagons in the marketplace.
With Mr. Lynch’s saying in mind, now is an opportune time to take a position in stocks of sturdy companies, many of which may not be obvious choices. A lot of promising stocks exist on the market’s periphery. Yet, they may get overlooked despite strong catalysts driving their share price higher. That’s too bad, as investors lose out when they don’t turn over these rocks.
Let’s uncover three such stocks with clear upside potential for the future.
Ferrari (RACE)
Italian automaker Ferrari (NYSE:RACE) occupies a unique place among automakers. Many analysts refer to the sports car manufacturer as a “luxury brand.” RACE, known for its distinctive red colored sports cars, certainly charges premium prices for its products.
Also, it boasts a reputation for innovation. Ferrari is in the midst of developing fully electric versions of its sports cars. And, it has even begun accepting cryptocurrency payments from its customers in the U.S. and Europe.
Clients of Ferrari can now buy a luxury sports car that costs more than $200,000 using Bitcoin (BTC-USD), Ethereum (ETH-USD) and USD Coin (USDC-USD). Executives have said they’re accepting crypto payments because they want to “support dealers in better addressing the evolving needs of clients.” They’ve also said that a growing number of customers are young, wealthy crypto investors who want the freedom to use digital currencies.
Moreover, Ferrari is different from other automakers in that many people buy their sports cars as an investment that appreciates in value over time. Notably, RACE stock has gained 30% in the last 12 months.
Texas Instruments (TXN)
Texas Instruments (NASDAQ:TXN) appears to be moving from strength-to-strength right now. The company’s stock is up 17% on the year after the microchip developer raised its forward guidance and reported strong financial results on multiple occasions. Texas Instruments sells foundational microchips that are found in nearly every corner of the economy, from vehicles and industrial components to consumer electronics.
Additionally, TXN is getting a boost from the fact that its microchip manufacturing facilities are based in the U.S. rather than overseas, shielding it from geopolitical turmoil. About 75% of Texas Instruments’ property, plants and equipment are situated inside the U.S. On a recent earnings call, management said they are seeing growing demand for their chips, particularly in the industrial and automotive sectors.
Also, TXN stock pays a decent quarterly dividend of $1.30 per share, giving it a yield of 2.62%.
Cleveland-Cliffs (CLF)
For a buy-the-dip candidate, consider steel manufacturer Cleveland-Cliffs (NYSE:CLF). The company’s stock has struggled lately, having fallen 10% in the last 12 months after its attempt to acquire U.S. Steel Corp. (NYSE:X) failed. However, hope prevails as Cleveland-Cliffs has reached a definitive agreement to acquire Canadian steelmaking rival Stelco Holdings (OTCMKTS:STZHF) for $2.80 billion.
The Stelco Holdings purchase is the latest attempt to grow Cleveland-Cliffs. CLF Chief Executive Officer (CEO) Lourenco Goncalves has built the company from an iron ore miner into one of the top four U.S. steel producers and the largest supplier of steel to the automotive industry. Analysts say the purchase of Stelco Holdings will expand Cleveland-Cliffs’ steelmaking footprint and double its exposure to the flat-rolled steel market.
Also, the Stelco deal is more assured with the support of Stelco’s largest shareholders and the United Steelworkers union. The acquisition is expected to close in this year’s fourth quarter.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.