Small Cap Stocks: Three Oversold Opportunities to Own

December 4, 2018, By fierceinvestor,
Pot Stock Millionaire V2

If you really want to become a better investor then you need to be looking at where the smart money is heading.  You need to understand what is truly driving the markets and how you can take advantage of these moves as – and before – they hit the mainstream.

That’s how the long-term wealth can be found.

In fact, we’ve uncovered three stocks that should have a place in your portfolio immediately.

Small Cap Bargain No. 1—Laredo Petroleum (LPI)

Laredo Petroleum, Inc. is an independent energy company with headquarters in Tulsa, Oklahoma. Laredo’s business strategy is focused on the acquisition, exploration and development of oil and natural gas properties and the gathering of oil and liquids-rich natural gas from such properties, primarily in the Permian Basin of West Texas.

It just recently authorized a $200 million repurchase program.

“At current market prices, this program will enable the Company to repurchase approximately 10% of our outstanding shares at, what we believe, is a substantial discount to the true value of the Company,” stated Randy A. Foutch, Chairman and Chief Executive Officer. “Our balance sheet strength after the divestment of our interest in the Medallion-Midland Basin pipeline system offers several avenues to accelerate value recognition for our current shareholders. We believe this repurchase program is the most compelling and accretive avenue at this time.”

We must also consider that company and founder, Randy A. Foutch is no stranger to successfully selling companies over his 30-year career.  We also believe this stock is in the right place at the right time with a prime position in America’s hottest oil play, which will allow it to continue delivering double-digit production growth going forward.

With solid fundamental growth and a growing position in the Permian Basin, we believe Laredo Petroleum could see higher prices and become a potential acquisition target.  In our opinion, LPI is in a great position to do well with exposure to the U.S. oil production boom with an established position in one of the hottest U.S basins.

Small Cap Bargain No. 2 – Glu Mobile (GLUU)

Glu Mobile develops, publishes, and markets a portfolio of free-to-play mobile games for the users of smartphones and tablet devices. The company publishes titles in four genres, including home décor, sports and action, fashion and celebrity, and time management. It creates games based on its own brands, including Contract Killer, Cooking Dash, Covet Fashion, Deer Hunter, Design Home, and QuizUp. The company also creates games based on third-party licensed brands, such as Restaurant Dash with Gordon Ramsay and Kim Kardashian; and Hollywood, MLB Tap Sports Baseball, and Racing Rivals. It markets, sells, and distributes its games primarily through direct-to-consumer digital storefronts worldwide.

The game developer behind Kim Kardashian: Hollywood, and Deer Hunter has seen its stock rocket nearly 90% higher this year. Impressive bookings, long shelf lives for its biggest hits and guidance that’s increased time and time again have helped.  Revenue is up 31% in the first three quarters of 2018.  That’s on top of 43% growth in 2017.

Not only do we like what’s under the hood with GLUU, we like it technically, too. After exploding from a low of nearly $5.50 in October, it hit a high of $8.42 before pulling back with the broader market. Now that it has caught strong support around $6.87, we believe the bottom is now firmly in place.  We also believe it could return back to $8.42 before long.

Small Cap Bargain No. 3 – Ceragon Networks (CRNT)

CRNT provides wireless backhaul solutions that enable cellular operators and other wireless service providers to deliver voice and data services worldwide. Its wireless backhaul solutions use microwave radio technology to transfer telecommunication traffic between base stations, small sells, and the core of the service provider’s network.

The company also provides wireless fronthaul solutions that use microwave technology for communication between LTE/LTE-advanced base band digital unit stations and remote radio heads. In addition, it offers IP-20 Platform solutions for various short-haul and long-haul applications, including IP-20N/IP-20A, IP-20GX, IP-20F, IP-20G, IP-20C, IP-20C-HP, IP-20S, IP-20E, and IP-20V.

This is one of the small cap gems that could benefit from the 5G boom.

By 2020, close to 10% of Americans with a smartphone are expected subscribe to 5G services.  By the end of 2023, Ericsson predicts that almost 50% of all US mobile subscriptions will be based on the new standard.

Analysts at Cowen & Company have already said, “A revolution is coming.”

In fact, they note 5G will usher in this revolution and have a “game changing” impact on society, per a Barron’s report.

“Certainly, there are already several technologies including artificial intelligence, robotics, the Internet of Things, quantum computing, etc. that have already impacted our lives a great deal… 5G will serve as the ‘glue’ for these foundational technologies to come together — and that convergence will form ‘the fourth industrial revolution’.”

And by 2035, about $12.3 trillion worth of goods and services will be enabled by 5G networks. The rollout of 5G will add approximately $3 trillion to the worldwide GDP.

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