IPI - 2 Top Stocks That Aren't on Wall Street's Radar
Passive investing, or owning index funds and exchange-traded funds (ETFs) comprising a representation of the broader stock market, isn't inherently good or bad. It's certainly easier than conducting research and due diligence into individual companies. But some investors are beginning to think that passive investing is creating a bubble.
Index funds attempting to mimic the whole S&P 500 or the Russell 2000 tend to leave out small-cap stocks. Put another way, the increasing popularity of passive investing is leaving a lot of small-cap stocks behind, even when operations suggest they deserve better. When Wall Street scrambles to correct its mistakes, shares of small-cap stocks can erupt for epic gains, as happened with Enphase Energy in 2019.
Two small-cap stocks that don't appear to be receiving their dues are Personalis (NASDAQ: PSNL) and Intrepid Potash (NYSE: IPI). Each could fail to capture important market opportunities, but individual investors looking for under-the-radar stocks may want to get familiar with the businesses.