3 Top Stocks You’ve Probably Never Heard Of – The Motley Fool

Posted: March 29, 2020 at 7:46 pm

Finding good stocks in this market climate is a unique challenge. With the COVID-19 pandemic posing serious risks and offering major market opportunities, wise investors who make well-informed decisions during this time could make a fortune.

While there are plenty of promising stocks you've surely heard about before, there are also quite a few companies that haven't received the same attention. Many of these businesses have tremendous growth potential, and despite their relative obscurity, make great potential investments right now. Here are three stocks you probably haven't heard of but are worth a potential spot in your portfolio:

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If someone asked you to name the top gold mining companies on the market, giants like Newmontand Barrick Goldcome to mind. However, there's one lesser-known gold miner that's worth a mention.

Kinross Gold (NYSE:KGC) tends not to get that much attention, especially compared to its larger rivals. However, its stock has fared reasonably well during this coronavirus bear market, losing only a small portion of its overall value over the past month. This makes sense considering that gold prices tend to move in the opposite direction of the equities market, with investors seeking safe havens for their money when stocks start falling.

Higher gold prices mean larger profit margins for gold miners, which all gold companies can appreciate. However, Kinross has a few things going for it that make it stand apart from the crowd.

For one, Kinross is significantly cheaper than its competitors from a valuation standpoint. Gold mining companies are already fairly affordable, with both Newmont and Barrick Gold trading at 3.7 and 3.5 price-to-sales (P/S) ratios, respectively. In comparison, Kinross trades at just a 1.6 P/S ratio.

While Kinross obviously isn't as large as these two better known gold miners, it's just as efficient in terms of its operations. One of the most important metrics for gold miners is its all-in sustaining costs (AISC). This figure, measured in dollars per ounces, represents the total cost of mining an ounce of gold. Kinross had an AISC of $983 per gram for 2019, while Newmont's 2019 AISC came in at $966 and Barrick's at $894.

While Kinross's costs are a bit higher when it comes to producing gold in comparison to its rivals, it's not enough to justify a P/S ratio that's half its competitors. If gold prices stay where they are or go higher, something which is a major possibility, Kinross Gold could be a major winner in 2020.

Sangamo Therapeutics (NASDAQ:SGMO)one of the few companies in the gene-editing sector, often gets overshadowed by its larger competitors. Compared to stocks like CRISPR Therapeutics, which is significantly larger in market cap, Sangamo seems like a smaller player in this relatively young market. However, this healthcare stock has plenty of tailwinds many of its competitors don't enjoy.

For one, Sangamo has one of the most diverse pool of drug candidates in the entire gene-editing sector. The company has 16 separate projects ongoing at the moment, with 11 in preclinical development and five in early stage clinical testing. This is much more than CRISPR's nine drug candidates, with only three having begun early stage testing.Right now, some of Sangamo's most anticipated candidates are its transfusion-dependent beta thalassemia drug ST-400, a sickle cell disease treatment called BIVV003, and a hemophilia A drug called SB-525.

Given the uncertain nature of developing new drugs, especially in the cutting-edge field of gene-editing, there's always a big chance that something can go wrong, like a candidate flopping. As such, having a diverse portfolio means there's a bigger chance of hitting at least one clinical home run, which is all a small biotech stock like Sangamo needs to become a major success.

Sangamo is also remarkably well-funded, with around $385 million worth of cash or cash equivalents on its balance sheet. For 2019, the company reported a net loss of $95.2 million. If expenses stay relatively the same, that would mean Sangamo has just under four years' worth of cash to keep itself afloat, more than enough time for a candidate to enter late-stage trials.

The gene-editing company also has a number of major partnerships with big names in the pharmaceutical industry, includingBiogen, Pfizer, and Sanofi. These deals can help provide additional capital as well as help manufacture and commercialize a potential candidate once it reaches late-stage trials.

Image source: Getty Images.

Peloton Interactive (NASDAQ:PTON) might not be as obscure as the other two names on this list, but it's far from being a household name either. If you've been thinking about ordering a treadmill or stationary bike at home, you've probably seen some of their products before.

With fear of the virus and government edicts keeping people at home and out of gyms, it's not surprising to see why Peloton is expecting a surge in sales.Finding ways to exercise at home has become an issue for many folks. As such, revenue from the company's bikes and treadmills is expected to surge in the coming months.

Peloton has already seen a significant increase in revenue over the past year. According to the company's recent Q4 2019 financial results, the company reported $466.3 million in revenue, a 77% increase from the $262.9 million reported in Q4 2018. It wouldn't be surprising if this upcoming quarter is even better than expected as more people avoid gyms altogether in favor of buying their own home workout equipment.

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3 Top Stocks You've Probably Never Heard Of - The Motley Fool

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