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3 Under the Radar Growth Stocks to Add to Your Watchlist

Technology is not the only sector that has seen high growth this year. Certain non-technology companies, like Five Below (FIVE), Fiverr (FVRR), and Crocs (CROX), have performed well despite the coronavirus pandemic’s disruptions. However, their growth stories have gone relatively unnoticed by investors so far. So, it could be wise to add these stocks to your watchlist now for an investment decision in the near term.

Technology stocks have dominated the attention of most investors this year because of their enormous growth. This grown has been driven in large measure by changing consumer and business behavior amid the COVID-19 pandemic. However, there are some non-technology stocks that have also experienced high growth this year and over a longer period. Many of these stocks have been overlooked by investors this year because of the tech boom's near-monopolized the market’s attention.

These companies have unique services and solution to offer and have not been significantly impacted by the pandemic. They have carved niches for themselves in highly competitive industries and have experienced high periods of growth in the recent past.

Five Below, Inc. (FIVE), Fiverr International (FVRR), and Crocs, Inc. (CROX) are three companies whose growth stories have gone relatively unnoticed. These companies have recorded growth in revenues and EBITDA and have performed well as measured by other growth metrics. Despite generating decent gains this year, the shares of these companies still have plenty of upside left we believe.

Five Below, Inc. (FIVE)

FIVE is a specialty retailer that offers a range of products for teen and pre-teen market. The company sells products priced at a $5 or below. FIVE has gained 22.6% so far this year.

FIVE recently partnered with Instacart to offer same-day delivery services to customers in selected cities in the United States. The company is also collaborating with 2019 Fortnite World Champion to launch a new product line consisting of seven gaming products. The Fortnite World Cups is an annual esports competition based on the video game Fortnite.

FIVE’s revenue has grown at a CAGR of 18.4% over the last five years. The company’s EBITDA has grown at a CAGR of 5.9% over the last three years.

FIVE is expected to see a revenue growth of 20.1% for the quarter ended January 31, 2021 and 4.5% in 2021. The company’s EPS is estimated to grow 3.6% for the quarter ended January 31, 2021 and at a rate of 16.1% per annum over the next five years.

How does FIVE stack up for the POWR Ratings?

A for Trade Grade

A for Buy & Hold Grade

B for Peer Grade

A for Overall POWR Rating

The stock is also ranked #2 of 37 stocks in the Specialty Retailers industry.

Fiverr International (FVRR)

FVRR operates an online freelancing platform that connects buyers and sellers. The company’s platform allows freelancers to connect with buyers in a variety of verticals, such as graphic designing, digital marketing, translation, legal, and more. FVRR’s stock has risen 850.5% year-to-date.

FVRR recently expanded its service to Latin American countries, including Brazil and Mexico. The company has also launched Fiverr Business, which is a subscription-based service that helps users manage and collaborate with teams of freelancers.

FVRR’s revenue has grown at a CAGR of 66.1% year-over-year. FVRR’s revenue is estimated to increase 83.2% for the quarter ended December 31, 2020 and 37.5% in 2021. The company’s EPS is expected to rise 250% for the quarter ended December 31, 2020 and 77.1% per year over the next five years.

FVRR’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank.

Crocs, Inc. (CROX)

CROX is involved in the designing, manufacture, and marketing of specialty footwear. The company retails sandals, sneakers, flats, boots, and mules. CROX’s stock price has increased 54.6% year-to-date.

CROX recently launched a new product line called Reviva that features five slippers built for comfort and revitalization. The company has also launched a new line of platform-based footwear under the name of Clog.

CROX’s revenue has grown at a CAGR of 2.6% over the last five years. Its EBITDA has grown at a CAGR of 57.1% over the last three years.

CROX’s revenue is expected to grow 25.9% for the quarter ended December 31, 2020 and 14.3% in 2021. The company’s EPS growth is expected to be 14% in 2021 and 10% per annum over the next five years.

It is no surprise that AVGO has a “Strong Buy” in our POWR Ratings systems, with a grade of “A” in Trade Grade, Buy & Hold Grade, and Peer Grade. In the 66-stock Fashion & Luxury industry, AVGO is ranked #9.

Want More Great Investing Ideas?

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FIVE shares were trading at $156.63 per share on Wednesday morning, down $0.07 (-0.04%). Year-to-date, FIVE has gained 22.50%, versus a 16.77% rise in the benchmark S&P 500 index during the same period.



About the Author: Aaryaman Aashind

Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.

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