One of the most fascinating things to consider about the stock market is that there are endless opportunities to discover new businesses that are making an impact in the world. While there’s always a place for blue-chip stocks and well-known names in your portfolio, it’s also important to understand that sometimes the less crowded trades offer the most upside.
Hunting down companies that have a chance to grow and add value to the world with a unique or groundbreaking business model is part of the fun of investing. With that said, finding the next big thing is easier said than done, especially with the sheer amount of options that are available to choose from these days.
The good news is that there are plenty of resources out there to help you find attractive new investment options. For example, we’ve put together a list of the 3 best stocks to buy that you’ve probably never heard of.
While these stocks are somewhat under the radar, for now, there’s enough to like about their business strategy and recent price action to warrant buying them.
Who knows, they might just become some of the hottest companies in the market in the coming years. Let’s take a deeper look below.
1. Tradeweb Markets
First up is a company that is a leader in building and operating electronic marketplaces for rates, credit, equities, and money markets. It feels like more investors should be talking about Tradeweb Markets Inc., (NASDAQ:TW) as it offers institutional, wholesale, and retail market participants a huge global network that allows them to benefit from better price discovery, order execution, and trade workflows.
With over 2,500 clients connected to the company’s network, some of the world’s largest investors rely on Tradeweb’s proprietary technology to handle their biggest transactions. It’s exciting to think about how financial markets will transform over the years given the possibility for even better execution and new financial instruments. What’s great about this company is that it offers investors a chance to evolve along with the market.
Tradeweb should continue to benefit from secular trends such as the increasing popularity of ETFs, more electronification in markets, and growing global debt pools. Investors should also be interested in the fact that Tradeweb is constantly using its data to improve the execution of its network and create new opportunities with data products.
The company saw its gross revenue in 2020 increase by 15.1% year-over-year to $892.7 million, marking Tradeweb’s 21st consecutive year of record revenues. The company also reported a record average daily volume of $897.9 billion in Q4, confirming that market activity is higher than ever.
2. Progyny
The ability to have children is one of the most beautiful parts of the human experience. Unfortunately, infertility is on the rise these days and many couples are being deprived of this gift. That’s a big reason why a company like Progyny Inc., (NASDAQ:PGNY) should be on your radar.
It’s a fertility benefits company that specializes in fertility and family building benefits solutions in the United States. The company’s fertility solutions ensure that employers receive the most value from their fertility benefit by helping members and physicians get the most effective treatment possible right from the start.
The challenges of fertility can be complex and emotionally trying, which is why Progyny’s business model and values stand out.
More and more of the top companies are looking to add fertility coverage, and it’s easy to imagine a future in which it becomes standard for all employers to offer this type of benefit. That could mean big things for Progyny going forward, as the company already counts massive companies like Microsoft (NASDAQ:MSFT), Paypal, Google (NASDAQ:GOOGL), and Unilever (NYSE:UL) among its clients.
With 54% year-over-year revenue growth in Q4 and Adjusted EBITDA that more than tripled, it’s clear that Progyny is an underrated healthcare stock that could become a household name in the future.
3. Fortinet
Fortinet Inc., (NASDAQ:FTNT) is a cybersecurity company that often gets overlooked in favor of other more popular names in the industry, like, Crowdstrike (NASDAQ:CRWD) and Okta (NASDAQ:OKTA).
However, given this company’s rapid growth and the stock’s recent strong price action, there’s reason to believe it’s the best cybersecurity company to own in 2021. Fortinet sells broad, automated, and integrated cybersecurity solutions to small and midsize businesses, enterprises, and government entities. The company has a nice combination of products that offer network firewalls that protect a physical location and next-gen services that protect the cloud.
Fortinet’s products are becoming increasingly more popular among small and medium-sized businesses that are looking for a single product that can offer multiple security services, and there’s plenty of room for growth given that cybersecurity threats aren’t going away anytime soon.
The company’s revenue in 2020 grew by 20% year-over-year to $2.59 billion and its free cash flow grew by 21% year-over-year to reach $907.8 million. Fortinet stock is up over 28% year-to-date and has been one of the strongest software performers throughout the recent tech correction.