Under the Radar: Exploring Untapped Potential in Overlooked Stocks

As a rule, I pay almost no attention to Wall Street analysts. I do not give much of a whoop about their opinion of a stock. Most of my biggest winners have been underfollowed or not followed by mainstream Wall Street firms. Much of the research produced for individual investors by the big Wall Street firms is more marketing than research. There are a few boutique analysts that specialize in things like banking and real estate that I read regularly, but it’s more to look for inside baseball information I may have missed and take advantage of their access to the C-suite.

What I do pay attention to are earnings surprises and revisions. When analysts revise earnings estimates upward, it’s like waving a green flag to investors. Positive revisions often signal that a company’s fundamentals are improving and that management is executing well. This can set the stage for strong stock performance, especially for patient, value-focused investors who know how to spot opportunities early.

Market sentiment plays a big role here. A positive revision often sparks optimism, driving buying activity. This momentum can push the stock price higher as more investors jump on board. Institutions, in particular, pay close attention to these revisions, and their large-scale buying can amplify the effect.

Valuation is another key factor. Higher earnings expectations make stocks look cheaper on a price-to-earnings basis, even if the price hasn’t moved yet. That’s an open invitation for investors to re-rate the stock higher. Over time, consistent upward revisions can create a narrative of reliability and growth, attracting long-term capital and putting a solid floor under the stock price.

Smart investors know to dig deeper when they see positive revisions. Look for companies with strong balance sheets, good management, and a history of exceeding expectations. Those are the ones that can turn a simple revision into substantial long-term gains. As always, patience and discipline win the race.

I am even a bigger fan of earnings surprises that happen with almost no one watching. When a company with little analyst coverage delivers a positive earnings surprise, it’s like a hidden gem finally getting noticed. These stocks often fly under the radar, and that lack of attention creates inefficiency. The market scrambles to catch up when good news hits, and the stock can take off like a rocket.

With fewer eyes on the company, there’s less information baked into the price. A strong earnings beat forces investors to reassess quickly, and the resulting buying frenzy can send shares soaring. For smaller or mid-cap names, this can also attract institutional investors who previously ignored the stock, fueling the fire.

When I sat down this week to run the list of underfollowed companies that have the key combination of positive surprise and upward revisions from the few analysts paying attention, a few names caught my eye as under-the-radar candidates for outsized gains.

Gambling.com Group Limited GAMB is a powerhouse in performance marketing, laser-focused on the online gambling industry. With a portfolio of top-tier websites like “Gambling.com” and “Bookies.com,” the company connects players with online casinos and sportsbooks, driving customer acquisition for operators in regulated markets.

The company has posted three consecutive positive earnings surprises, and the few analysts who follow it have been rushing to raise estimates. Institutions are starting to notice, and the stock has been gaining momentum in the last few weeks.

LiveRamp Holdings RAMP operates at the crossroads of data and marketing, carving out a niche in the rapidly growing world of data connectivity and identity resolution. Based in San Francisco, the company is essentially a high-tech bridge builder, helping businesses turn disconnected data into actionable insights while staying firmly committed to privacy and security.

LiveRamp is essentially a toll booth operator in the data economy. The more businesses lean on data to drive marketing, sales, and operations, the more valuable LiveRamp becomes.

The tailwinds here are strong. The shift to a privacy-first internet plays right into LiveRamp’s hands, and as more businesses look for ways to unlock value from their data without running afoul of regulators, demand for its solutions should continue to grow.

Only a handful of analysts are paying attention, and even they are underestimating the potential growth. LiveRamp has exceeded analyst expectations for four quarters in a row, and analysts have recently raised their estimates for this year and next. Institutions are starting to notice, and their buying has given the stock some upward momentum in the last few months.

Another company that caught my eye was about as far off Wall Street’s radar as possible. Only three analysts follow Eurosea Ltd. ESEA, and the last time one wrote a comment was in June. However, they have raised their estimates for both this year and next after Eurosea posted back-to-back positive earnings surprises.

Euroseas Ltd. is a niche operator in the global container shipping market. It focuses on the smaller, regional routes that the big players can’t or won’t serve. Based in Greece, Euroseas has carved out a solid position by specializing in feeder and intermediate container vessels.

Euroseas isn’t flashy, but it’s effective. It’s a pure play on the regional and feeder markets in container shipping, areas that are often overlooked but critically important to the global trade ecosystem. With its flexible business model and experienced management, it’s the kind of company that knows how to ride the waves of a cyclical industry and come out ahead.

At the current price, the stock is trading well below the value of its ships and yields more than 6%. If the company continues to exceed expectations and the institutions begin accumulating the stock, Euroseas could have substantial upside.