Underdog tech stocks noticed as huge potential top performers in 2016
Tech investors always root for the category performers and tend to leave startups with no room for development. However, 2016 advances to new financial strategies as more tech investors take notice of underdog stocks with huge potential for growth.
Successful investing, according to a long time investor’s blog, is about forcing oneself to do the smart thing and that is overcoming emotions. While everyone’s favorite investment strategy is to stay with the crowd favorites, taking chances with underdog stocks might be a good idea. The logic is to buy stocks at a low price and sell them high when these stocks are up.
The same logic became evident in a Motley Fool article about two months ago. It read that companies which have the odds against them prove that compelling investment opportunities await them. The multimedia-financial company followed several least favorite stocks in the first part of 2016 and it included Fitbit (NYSE:FIT).
To some, the company may not be considered an underdog since it dominates the wearables and fitness tracker markets and also enjoyed a 30 percent market share in 2015. Nevertheless, the MF source included Fitbit in the list when it looked at the stock’s long-term market potential. Though fitness trackers started out big in the previous years, technical innovations and advancement such as smart watches have slowly dominated the market. However, the company continues to add new features and functionalities while its mobile platform operators are also working to improve on its performance that no one dares to think of.
Intel is also included in global asset management firm, GAM Holdings AG, 2016 tech stock underdogs to watch. According to the GAM source, this year is the best time to look at Intel again which suffered a decline in PC sales over the last couple of years. Furthermore, the growth of Data Center Group or cloud computing will compensate for slow PC sales. The company’s relatively cheap valuation and 3 percent dividend yield, as well as the developing cloud technology, will become the propeller for investors to take a look at this company again.
Mobile tech innovator 5BARz International, Inc. (OTCQB: BARZ) joins the list of tech stock underdogs with the potential for growth and expansion. The Wall Street Journal pointed out the company’s 46.26 percent short interest decrease from a total of 42, 800 short interest shares down to 23,000 this month. Even if the company was reported to have declined by 40.86 percent since October 2015, the future looks good in terms of expansion. The company which developed a critical piece of carrier grade technology that enhances weak indoor mobile signal has been accelerating on capital raising and business developments. According to the company release, 5BARz has recently topped a private placement completed by the company with an equity investment of $1.1 million.
“Following the recent series of orders received by the Company from Tier 1 cellular network operators in India, these funds provide a critical element for the expansion of our business and production capability in a market with 981 million cellular phone subscribers. Our management team in India is focused on achieving rapid penetration into this marketplace,” said 5BARz International CEO, Daniel Bland.
Late last year, TheStreet took note of Western Digital (WDC) as one of the tech underdog stocks with one-year price targets. According to the article, the company that makes hard drives is poised to expand its offerings when it announced the acquisition of SanDisk (SNDK). True enough, the acquisition took place in March 2016 as WDC shareholders approved a $16 billion deal to acquire SanDisk. The move will likely lift off investor fears on WD’s 43 percent year-to-date price drop and that SanDisk deal will make WD a broad supplier of data-storage components, according to the Street source.
Stock investment has very unpredictable ups and downs, just as the companies in this list. Since tech innovations can add value to a plummeting tech stock, companies are wise enough to take note of this and bring their game by leveraging on performance and product innovations.