As I mentioned last week, as part of our research process for our online platform, billionairesportfolio.com, we look for investment ideas using a series of simple, yet powerful, screens.
The goal is to identify stocks where the potential reward greatly outweighs the risk. Finding stocks with asymmetrical risk/reward is at the core of activist investing — it’s a characteristic represented in every one of our picks in our premium research service, the Billionaire’s Portfolio. If you want to find yourself on the right side of big winners, if you want to own the stocks that show up on the news at night after doubling or tripling on the day, you need to focus on this risk/reward relationship in your stock selection.
Among the many screens we run through our research process, we like finding stocks that are trading at a huge discount to analyst consensus price targets. These are stocks that have consensus analyst price targets well above their current share price, that have strong sentiment and Wall Street sponsorship. That can prove to uncover deep value investment opportunities. In using this screen, we tend to “back into” finding the presence of a an influential investors, already involved in the stock.
Now, given the backdrop I’ve described, the following five stocks have recently hit our radar as high potential, deep value candidates. These stocks have an average analyst price target that is at least 100% higher than its current share price.
1) Emcore Corporation (EMKR) has a current share price $4.29. The consensus analyst target price is $8.63. That gives us a “street projected return” of 101%.
2) Global Geophysical Services (GGS) has a current share price $2.55. The consensus analyst target price is $5.57. That gives us a “street projected return” of 122%.
3) Uni-Pixel Inc. (UNXL) has a current share price $18.12. The consensus analyst target price is $45.26 That gives us a “street projected return” of 150%.
4) Virnetx Holding (VHX) has a current share price $19.74. The consensus analyst target price is $46.67. That gives us a “street projected return” of 136%.
5)Wi-Lan Inc. (WILN) has a current share price of $3.26. The consensus analyst target price is $6.57. That gives us a “street projected return” of 101%.
This gives us a great starting point to identify stocks that may be deeply undervalued, with the potential to be the next big winner that dominates financial news headlines.
President of The Billionaires Portfolio