In this article, we discuss the 10 low profile stocks that surprised in 2021. If you want to skip our detailed analysis of these stocks, go directly to the 5 Low Profile Stocks that Surprised in 2021.
The beginning of 2021 was marked by the economic recovery but inflation fears gradually dampened the initial momentum and served to disrupt the hopes of a faster-than-expected “back to normal” for the stock market. The three main market indices still registered impressive gains in 2021, with the S&P 500 up close to 27%, the NASDAQ up 21%, and the DOW Jones Industrial Average up almost 19%. However, a record 6.8% high was registered on the Consumer Price Index in December, shattering an inflation record held since 1982. The Fed refused to intervene, maintaining interest rates and pumping billions into the economy.
Five Firms Dominate S&P 500 Returns
There were plenty of noteworthy trends that served to define the market in 2021. The short squeeze saga involving retail investors and hedge funds led to a historic standoff in January, a battle for domination that continued for the rest of the year. An IPO boom, led by special purpose acquisition firms, raked in a record $453 billion in proceeds. The tech industry continued to dominate, as evidenced by Goldman Sachs research which showed that between April and December, over 51% of the total returns of the S&P 500 came from five big tech firms.
These five firms were Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), Tesla, Inc. (NASDAQ:TSLA), and NVIDIA Corporation (NASDAQ:NVDA). Even as these companies grabbed the headlines, there were some low profile stocks that managed equally spectacular gains in 2021. Some of the top low profile stocks that surprised analysts in 2021 include The Sherwin-Williams Company (NYSE:SHW), Macy’s, Inc. (NYSE:M), and Ford Motor Company (NYSE:F), among others discussed in detail below.
Photo by Mohamed Hadji on Unsplash
Our Methodology
The companies that have not received widespread attention in investor circles despite solid performance in 2021 were selected for the list. The business fundamentals and analyst ratings for these firms are also discussed to provide readers with some context for their investment choices.
Data from around 900 elite hedge funds tracked by Insider Monkey was used to identify the number of hedge funds that hold stakes in each firm.
Low Profile Stocks that Surprised in 2021
10. WaveDancer, Inc. (NASDAQ:WAVD)
Number of Hedge Fund Holders: N/A
Gain in Share Price in 2021: 250%
WaveDancer, Inc. (NASDAQ:WAVD) provides software and information technology solutions. The company was formerly known as Information Analysis but changed the name to WaveDancer in December 2021. The name change came merely a few days after the firm was approved for listing on the NASDAQ. Previously, the shares had traded in Over-the-Counter (OTC) markets. It rose to prominence after acquiring Gray Matters, a blockchain and encryption firm, for $10.5 million in November. Gray Matters works closely with the US government.
The purchase helps WaveDancer, Inc. (NASDAQ:WAVD) with a profile in innovative supply chain management. It will also aid WaveDancer in deepening existing relationships with the US intelligence, diplomatic, and national security sectors.
Just like Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL) and Tesla, Inc. (NASDAQ:TSLA), WaveDancer, Inc. (NASDAQ:WAVD) is one of the stocks attracting the attention of smart investors.
9. Ingles Markets, Incorporated (NASDAQ:IMKTA)
Number of Hedge Fund Holders: 14
Gain in Share Price in 2021: 104%
Ingles Markets, Incorporated (NASDAQ:IMKTA) owns and runs supermarkets in the southern parts of the United States. Even though the company has not grown its physical footprint by a meaningful degree in recent years, it has still managed to grow revenues during the period. It is also one of the cheaper options in the retail space, one of the sectors expected to benefit from the market shift towards value in the coming weeks. One unique aspect of Ingles Markets, Incorporated (NASDAQ:IMKTA) is that over 30% of the sales come from grocery products.
Between 2017 and 2021, the revenue of Ingles Markets, Incorporated (NASDAQ:IMKTA) grew by more than 26% from $4 billion to $5 billion, equating to an average annual growth rate of around 5.7%. Major hedge funds are also bullish on the stock. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm GAMCO Investors is a leading shareholder in Ingles Markets, Incorporated (NASDAQ:IMKTA) with 787,800 shares worth more than $52 million.
8. Clearfield, Inc. (NASDAQ:CLFD)
Number of Hedge Fund Holders: 14
Gain in Share Price in 2021: 250%
Clearfield, Inc. (NASDAQ:CLFD) makes and sells communications equipment. The stock has returned more than 38% to investors in the past twelve months. One of the primary reasons for this boom is the successful passage of the Biden Infrastructure Plan. The plan set aside $65 billion for the development of communications infrastructure. Fiber optics, a key part of edge computing, 5G, and Internet-of-Things, and one of the premier products of Clearfield, Inc. (NASDAQ:CLFD), have seen a massive surge in demand as a result.
Hedge funds remain bullish on Clearfield, Inc. (NASDAQ:CLFD) as a new fiscal year begins. At the end of the third quarter of 2021, 14 hedge funds in the database of Insider Monkey held stakes worth $80 million in Clearfield, Inc. (NASDAQ:CLFD), the same as in the preceding quarter worth $56 million.
7. Synaptics Incorporated (NASDAQ:SYNA)
Number of Hedge Fund Holders: 23
Gain in Share Price in 2021: 197%
Synaptics Incorporated (NASDAQ:SYNA) operates as a semiconductor manufacturer. The stock is cheap and offers unique value to investors who want an entry point into the chip industry, the unique proposition being the large footprint of Synaptics Incorporated (NASDAQ:SYNA) in the Internet-of-Things market. In the first quarter results for the present fiscal year, 55% of the revenue for Synaptics Incorporated (NASDAQ:SYNA) came from IoT products, with mobile and personal computer markets making up the rest.
Leading mobile brands like OPPO and OnePlus also use Synaptics Incorporated (NASDAQ:SYNA) products. This is why hedge funds also trust Synaptics Incorporated (NASDAQ:SYNA). At the end of the third quarter of 2021, 23 hedge funds in the database of Insider Monkey held stakes worth $493 million in Synaptics Incorporated (NASDAQ:SYNA).
In its Q3 2021 investor letter, FPA Queens Road, an asset management firm, highlighted a few stocks and Synaptics Incorporated (NASDAQ:SYNA) was one of them. Here is what the fund said:
“Synaptics, a developer of human interface (HMI) hardware and software, is experiencing a strategic shift to a higher-margin business, primarily Internet of Things (IoT) products, and continued its recent trend of announcing higher operating margins and providing favorable financial guidance. During the quarter, the company announced it was purchasing former portfolio holding, DSP Group, a communications chip designer.Management is executing well on this strategic shift and delivering impressive financial results.”
6. SiTime Corporation (NASDAQ:SITM)
Number of Hedge Fund Holders: 21
Gain in Share Price in 2021: 165%
SiTime Corporation (NASDAQ:SITM) provides silicon timing systems. These systems are used in various industries, including IoT, automotive, electronics, and others. According to an estimation by the firm in 2020, the firm needed 40 billion units to meet a demand of around 2 timing chips per device. By 2035, this number is expected to climb to almost 125 billion units. This puts SiTime Corporation (NASDAQ:SITM) on a path to deliver sales growth of around 25% in the coming ten years. The past earnings of the firm suggest it can deliver those numbers.
SiTime Corporation (NASDAQ:SITM) has attracted the attention of major hedge funds that are adept at picking out quality offerings in most sectors. Among the hedge funds being tracked by Insider Monkey, Illinois-based investment firm Trigran Investments is a leading shareholder in SiTime Corporation (NASDAQ:SITM) with 393,972 shares worth more than $80 million.
Alongside Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Tesla, Inc. (NASDAQ:TSLA), SiTime Corporation (NASDAQ:SITM) is one of the stocks on the radar of shrewd investors.
In its Q3 2020 investor letter, Wasatch Advisors, an asset management firm, highlighted a few stocks and SiTime Corporation (NASDAQ:SITM) was one of them. Here is what the fund said:
“SiTime Corp. (SITM), a developer of silicon based timing components, was the top contributor to Fund performance during the third quarter as the company made a special announcement to raise its earnings guidance. SiTime Corporation (NASDAQ:SITM) manufactures oscillators, clock generators and embedded resonators used for ethernet switches, computing devices, graphics cards, disk drives, mobile phones and subscriber-identity cards. With time-keeping devices transitioning from quartz to silicon, which improves accuracy, we think the company is particularly well-positioned as a technology leader that’s years ahead of the competition. As we’ve communicated before, SiTime is an almost ideal example of a holding we like for the Fund. The company ranks exceedingly well in our assessment of its balance sheet, business model, management team, market share and growth potential. Moreover, we want to own SiTime in good environments and in bad ones too.”
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Disclosure. None. 10 Low Profile Stocks that Surprised in 2021 is originally published on Insider Monkey.
