Over the last several months, we’ve dealt with absolute chaos in the markets.
The coronavirus, inflation, fears of Fed action, depressing economic outlooks, you name it…
Now, investors want to know what’s going to happen next.
Unfortunately, we can’t tell you that with 100% certainty. But we can point you in the direction of some of the hottest stocks that are flying under the radar. Better, with solid catalysts, bullish insiders, and analyst upgrades, these five stocks could see higher highs in New Year 2022.
Opportunity No. 1 – Standard Lithium (SLI)
The lithium story has been red hot.
With electric vehicle demand, and hopes for a greener future, lithium is seeing substantial demand. Not only are automakers adopting EV models, but countries all around the world want millions of them on the roads over the next few years.
Unfortunately, there’s just not enough lithium supply at the moment for that to happen.
In fact, “There is the quadrupling of demand in just five years and probably a growth of six or seven times over 10 years. So, clearly the industry is not prepared today for that level of demand – the amount of incremental capacity that the industry needs over the next 10 years is at least 1.5 million mt and in terms of capital investment, will probably require $45 billion-$50 billion of investment into new projects or expansions of existing operations,” says S&P Global.
Fortunately, that’s where companies like Standard Lithium (SLI) may be able to help.
At the moment, the company is focused on its 3,140,000 tonne LCE Indicated Resource -150,000-acre joint venture Lanxess Project, located in south Arkansas.
In addition, according to CEO Robert Mintak’s interview with CNBC’s Jim Cramer, its Lanxess Project in Arkansas is well positioned to serve the U.S. EV market, and could help facilitate exports to Europe as well. Also, its project is located in the Smackover brine region of Arkansas – which is known to hold some of the richest lithium resources.
Opportunity No. 2 – Luminar Technologies (LAZR)
Lidar Technologies was off to the races following its IPO in 2020. Unfortunately, the lidar tech stock would spend much of 2021 in the doghouse, as optimism wore off. However, don’t write the stock off just yet. The company is still making progress as top automakers are starting to incorporate lidar technology, or light detection and ranging in their cars.
In addition, the company recently announced that NVIDIA selected Luminar’s lidar sensors for its DRIVE Hyperion autonomous vehicle platform.
In fact, according to a NVIDIA press release, “Our collaboration with Luminar bolsters the DRIVE ecosystem of companies that are focused on building best-in-class technologies for enabling autonomous driving functionalities,” said Gary Hicok, Senior Vice President of Engineering.
Even Volvo just announced it was teaming up with Luminar to test its self-driving car. “With Luminar as standard on every vehicle, (Volvo’s) next SUV has the opportunity to be the safest vehicle ever produced, while also being the first to enable true autonomy and at highway speed,” Luminar CEO Austin Russell said in a recent press release.
Plus, it looks like there are plenty of bulls behind the wheel at the company.
Not only did the company recently announce a $250 million stock buyback, it announced its insiders were buying shares, including CEO Austin Russell, who, according to Barron’s, is encouraged by the company’s momentum and potential for lidar.
Opportunity No. 3 – Digital Turbine (APPS)
Digital Turbine has been one of the most explosive stocks on the market.
After bottoming out around $3.90 in early 2020, the stock ran to a recent high of about $51, where it’s still an interesting opportunity. Especially after inking a strategic partnership with Google, which caught the attention of Roth Capital’s Darren Aftahi.
“APPS will act as one of the lead app discovery platforms for the roughly one billion Android devices across the globe Ignite – AAPS’ app delivery and discovery platform – supports, streamlining APPS’ ability to achieve greater scale and install footprint in which it can begin to introduce more products and services (many of which carry higher revenue per device rates),” said the analyst, as quoted by Tip Ranks.
Even better, the analyst has a buy rating on the stock with a price target of $90 a share.
Analysts at Macquarie upgraded the stock to outperform, as well with a price target of $80, believing the stock trades at an attractive valuation following a pullback.
Earnings haven’t been too shabby either.
For fiscal second quarter 2022, revenue came in at $310.2 million, representing 338% year over year growth. Non-GAAP adjusted EBITDA for the fiscal second quarter of 2022 was $47.9 million, representing growth of 191% as compared to Non-GAAP adjusted EBITDA of $16.5 million in the fiscal second quarter of 2021.
Opportunity No. 4 – Retractable Technologies (RVP)
Retractable manufactures and markets VanishPoint and Patient Safe safety medical products and the EasyPoint needle. The VanishPoint syringe, blood collection, and IV catheter products are designed to prevent needlestick injuries and product reuse by retracting the needle directly from the patient, effectively reducing exposure to the contaminated needle.
That’s essential, especially nowadays.
After all, needlestick injuries can expose healthcare workers to major health risks and diseases such as hepatitis, HIV, and other unnecessary issues.
Plus, according to Nursing World, every year an estimated 384,000 needlestick injuries occur, or more than 1,000 a day. In addition, they noted, “The CDC estimates that between 62 percent and 88 percent of sharp injuries can be prevented by using safer devices.”
Even better, one of the company’s biggest clients is the U.S. government, which accounted for 50.7% and 64.8% of the company’s net sales for the three and nine month periods ending September 2021.
In addition, the company’s operating income came in at $44.1 million for the first nine months of 2021, as compared to $11.8 million year over year.
Opportunity No. 5 – Cohu Inc. (COHU)
Cohu Inc. isn’t your typical semiconductor company. It doesn’t make computer chips. However, it does supply the testing equipment needed for the chip manufacturing process, which is critical given the global chip production shutdowns still plaguing industries. Plus, with chip companies expanding their production capacity, Cohu could see even bigger demand.
Even better, the company recently reported a 49% increase in year over year revenue of $225.1 million. The Board approved a $70 million buyback program. Also, according to the company’s President and CEO, Luis Muller, fiscal 2022 is forecasted to be strong, with record revenue and profitability, along with strong order demand expected.
Plus, analysts love the stock, with DA Davidson’s Thomas Diffely raising the firm’s price target to $55 from $50 with a buy rating. “The analyst cites the company’s updated mid-term target model calling for $1B in revenue and $4.00 per share in earnings power driven by the growth in the Inspection & Metrology market and increased traction in Interface products. Diffely adds that he remains bullish on Cohu given its multiple revenue drivers, margin expansion opportunities, and an attractive valuation,” as noted by TheFly.com.