Key Takeaways:
- Travelzoo has surged 100% in the past year, but analysts still see 60% upside, with earnings expected to grow 22% per year over the next 2 years.
- Yeti Holdings trades near its all-time lowest P/E, with strong brand power and analysts expecting 10% annual earnings growth.
- Analysts see 50% upside for Star Bulk, driven by expected earnings and dividend growth over the next 2 years.
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Small-cap stocks can be risky, but they can also offer some of the biggest opportunities for outsized returns because they fly under the radar for most investors.
Here are 3 undervalued small-cap stocks for March. The first two look interesting, but Stock #3 looks like the best one on this list.
1: Travelzoo (TZOO)
Travelzoo is an online travel company that curates exclusive premium deals on hotels, vacations, and entertainment.
Think of it as a niche version of Expedia or Priceline, focusing on high-end travel experiences.
Despite having a market cap of just $200 million, Travelzoo’s stock price has doubled in the last year and could still be undervalued.
Analysts today see nearly 60% upside, with an average price target of $27 per share.
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The company is expected to see nice revenue and earnings growth, yet the stock trades at just 15 times earnings.
Travelzoo is a good stock, but it doesn’t look as interesting as Stock #3.
2: Yeti Holdings (YETI)
Yeti is a well-known premium outdoor brand that sells high-quality coolers, drinkware, and outdoor gear.
The company has built a strong reputation, allowing it to charge premium prices and maintain high profit margins.
Right now, analysts have an average price target of $44 per share, which represents about 20% upside from today’s levels.
The stock also looks attractive because:
- Shares trade below 13 times earnings, which is near the stock’s all-time low P/E ratio.
- Meanwhile, earnings are expected to grow nearly 10% annually.
For long-term investors, Yeti looks like an interesting stock that could have meaningful upside from today’s valuation.
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3: Star Bulk Carriers (SBLK)
Star Bulk is the largest U.S. dry bulk shipping company in terms of fleet size.
It transports essential global commodities like iron ore, coal, and grain. These are industries that tend to remain in demand despite economic cycles.
Key reasons to watch Star Bulk:
- Howard Marks (Oaktree Capital Management) owns the stock
- Analysts think the stock is undervalued
- Massive expected dividends
- Expected earnings growth
Howard Marks did reduce his position in the company by 6% last quarter. Still, he owns the stock, and likely thinks it’s undervalued today:
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Analysts think the stock has nearly 50% upside, with a price target of ~$23 per share vs. its current price of around $15 per share.
The stock also offers massive dividends, with analysts expecting nearly $5 per share in dividend payouts over the next two years. Since this is a $15 stock, that would be pretty impressive.
Earnings are also expected to grow dramatically in the next 2 years, which gives the stock strong future potential.
With strong expected earnings and dividend growth, a potential 60% upside, and Howard Marks having some ownership through Oaktree Capital Management, Star Bulk looks like an interesting small-cap stock today.
TIKR Takeaway
Travelzoo, Yeti, and Star Bulk could all have strong upside potential in 2025.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks and was built for investors who think of buying stocks as buying a piece of a business.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold positions in any of the stocks mentioned in this article. Thank you for reading, and happy investing!
