10 Best Stocks You've Never Heard Of

The market is peppered with undiscovered gems boasting stable fundamentals and cheap valuations. Here are 10 of the best stocks flying under the radar.

big blue question mark among smaller question marks
(Image credit: Getty Images)

An important advantage retail investors have over institutional buyers when seeking out the best stocks to buy is the ability to find undiscovered gems, which are generally too small for fund managers to hold. Institutions invest billions of dollars at a time and are thus reluctant to buy thinly traded equities that become volatile when big blocks trade. The price of low-volume stocks spikes when institutions start purchasing blocks and plummets when blocks are sold. The end result is high transactional costs and eroding trading profits.   

Surprisingly there are many more companies uncovered by Wall Street analysts than there are ones researched by the pros. A Multex study from a few years ago found that only about one-third of the approximately 8,900 U.S. exchange-traded stocks are covered by analysts; two-thirds have no research coverage at all.

This lack of coverage may have nothing to do with the quality of the company or its growth prospects. The biggest factor determining Wall Street coverage is the company's potential to generate investment banking fees. Small stocks rarely sell public debt or equity. Since these are poor candidates for investment banking fees, Wall Street firms have little incentive to provide research coverage.

With the major stock market indices down double-digits so far in 2022, this could be a great time for investors to seek out the best stocks to buy among hidden gems. Neglected equities are sometimes undervalued and can begin to generate outsized returns once they land on investors' radar. There is even a name for this phenomenon: the "neglected firm effect." One study looking at well-covered S&P 500 stocks versus neglected ones over a nine-year period found that the neglected stocks generated 16.4% average annual returns versus returns of only 9.4% for the broadly covered stocks.

Here are 10 of the best stocks that have been virtually ignored by Wall Street. Many have characteristics that make them recession-resistant, most are bargained-priced and several pay rich dividends.   


Data is as of Oct. 17. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. 

Lisa Springer
Contributing Writer, Kiplinger.com

Lisa currently serves as an equity research analyst for Singular Research covering small-cap healthcare, medical device and broadcast media stocks.