Hidden Gems: 3 Market Underdogs to Buy at Rock-Bottom Prices

Underdogs stocks carry almost universal appeal. It’s one thing to go with the rest of the crowd. It’s quite another to take your time to find some diamonds in the rough that could yield considerable returns.

Basically, these hidden gems represent the universal desire to pioneer a particular accomplishment. For example, we all remember who first stepped foot on the moon. We don’t really discuss who was the last person to do it, as monumental of a triumph that it is.

Now, that’s not to say that you can’t extract profitability by chasing the flavors of the week. However, you might see some exceptional rewards with these underdogs stocks.

Exact Sciences (EXAS)

A molecular diagnostics company, Exact Sciences (NASDAQ:EXAS) specializes in the detection of early stage cancers. Per its public profile, Exact launched Cologuard in 2014. It’s the first stool DNA test for colorectal cancer. Since then, the company has grown its product portfolio to encompass other screening and precision oncological tests for other types of cancer.

Given that early detection is vital to facilitate the highest probability of successfully addressing the disease, Exact offers a very relevant business. However, it’s one of the underdog stocks at the moment. Since the start of this year, EXAS slipped 22%. Over the trailing one-year period, it has gone nowhere, losing about 8%.

Despite the ugly print, analysts remain overwhelmingly bullish on EXAS stock, rating it a consensus strong buy. Among 15 expert voices, the worst rating comes in as a hold. Overall, the average price target stands at $89.77, implying 56% upside potential. Further, the most optimistic target reaches up to $115, which is nearly double the current market value.

Perrigo (PRGO)

A manufacturer of private-label over-the-counter pharmaceuticals, Perrigo (NYSE:PRGO) plays an important role in the broader healthcare industry. However, it presently sits among the underdogs stocks and I must say for not entirely undeserved reasons. As MarketWatch pointed out, PRGO recently suffered a dramatic fall as management stated that the overhaul of its infant-formula manufacturing facilities will weigh on earnings this year.

Per the leadership team, Perrigo must adapt its facilities to the evolving regulatory landscape. Further, the company is investing in enhanced cleaning and sanitation protocols, as well as environmental-monitoring and quality-assurance programs at the plants. Adding to the pressure, Perrigo is also planning to cut hundreds of jobs.

While it’s an ugly situation, the speculative argument is straightforward: we’re betting that the worst of the disclosures have been priced into PRGO stock.

Adding to that speculation, analysts peg shares a unanimous strong buy with a $41.67 average price target. That comes out to an upside potential of nearly 59%.

Pan American Silver (PAAS)

As a precious metals miner – specifically representing one of the world’s largest producers of silver – Pan American Silver (NYSE:PAAS) offers significant relevancies. Sure, it can potentially act as an indirect inflation hedge based on broader interest in precious metals. However, as society integrates advanced industries such as electric vehicles, silver should rise in demand due to its conductive properties.

However, PAAS is currently relegated to one of the underdog stocks. Since the beginning of January, shares have lost 22% of market value. In the past 52 weeks, they fell 19%. Nevertheless, analysts expect continued growth in the mining enterprise. For the current fiscal year, they anticipate revenue to reach $2.56 billion. At the end of fiscal 2025, sales may hit $2.68 billion.

Not surprisingly, Wall Street experts rate Pan American a consensus strong buy. The average price target lands at $19.67, implying almost 59% upside potential. Further, the high-side target goes up to $28, which projects growth of nearly 126%.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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