3 Under-the-Radar Stocks That Won't Stay Ignored for Long - TheStreet

It's often the little-known stocks that turn out to be the surprise winners, with eye-popping gains that make investors slap their foreheads and wish they'd had the foresight to get on board early. Well, we've found three stocks that fit this description. Now could be your chance to get a piece of the action, before the rest of the herd figures out the enormous potential of these companies.

These widely ignored stocks that have taken a beating this year, but carry great long-term possibility. They could give your long-term investment strategy a real shot in the arm.

So what's the story behind these stocks? Can investors depend on them to mount a strong comeback? We dig deeper and see if they warrant your money.

Image placeholder title

CERN

data by

YCharts

Cerner Corporation (CERN) - Get Report

Health-care IT firm Cerner has been facing a number of challenges over the past one month and has seen a 7% downswing. Analysts suggest the company's third-quarter revenue slump and the soft guidance on its performance contributed to the plunge.

However, with the next five years slated to see nearly 17% per annum earnings-per-share growth, Cerner has a rock-solid future trajectory. At a forward earnings of 25 times, the stock is attractively valued and is in-line with peers like Allscripts Healthcare Solutions Inc. From a price to cash flow perspective, Cerner at 25.6 times looks better than AthenaHealth (41.6 times) and Veeva Systems (44 times).

Additionally, the company's decision to buy back shares can act as a platform for value creation, while the recent acquisition of Siemens Health Services could result in long-term growth for patient investors.

No wonder analysts have 23 "Buy" ratings on the stock compared to three "Holds" and just one "Sell" call.

Image placeholder title

ALXN

data by

YCharts

Alexion Pharmaceuticals Inc. (ALXN) - Get Report

Alexion Pharmaceuticals is a bio-pharmaceutical company serving patients with severe and rare disorders.

Without a doubt, Alexion is a fast-mover -- with an average three-year revenue growth of 41.8% and a net income rise of 55.3% (the industry's three-year sales growth is at 22% and net income growth is at 36%). The stock has jumped 4% over the past week. Total revenues in the third quarter grew to $666.6 million, logging a 20% increase.

Alexion has also firmly established its leadership in serving patients with rare and devastating diseases by diversifying its commercial portfolio, architecting the most robust rare disease pipeline in biotech. The company is now planning to expand its core Soliris business in PNH and aHUS, focusing on launching products Strensiq and Kanuma. It will also release reports on several research and development catalysts that are expected in the fourth quarter.

While it reduced 2015 revenues to the lower end of its guidance, Alexion increased the year's non-GAAP EPS guidance to a range of $4.92-to-$4.97 per share (from the previous range of $4.70-to-$4.80 per share). The company's premium valuation compared to peers is on account of a faster growth-rate.

With EPS set to grow at 20% per annum for the next five years, 15 analysts have "Buy" ratings on the stock, four suggest a "Hold," while there's zero indication of a "Sell" or "Under-perform." This stock offers outsized growth potential with limited risk, making it particularly well-suited for long-term wealth building.

Image placeholder title

WDC

data by

YCharts

Western Digital Corporation (WDC) - Get Report

Western Digital is a rapidly evolving business entity, moving from a pure-play manufacturer of hard-disk drives to a broader storage company.

Fiscal 2015 has been a difficult year -- the stock is down 44% in the year-to-date period. After a healthy and in-line first quarter, the second quarter's guidance was deemed by several analysts as "soft."

However, the big-ticket positive surprise for company was the $19 billion SanDisk acquisition. The deal is a key strategic moment for Western Digital -- it could double the company's market share, expand participation in higher-growth segments, and help it to vertically integrate in the NAND segment.

By gaining control of SanDisk's portfolio of NAND chips, controllers, and SSDs (sold-state drives), Western Digital can now put a cap on the threat of SSDs disrupting its core HDD (hard disk drive) business. The debt-funded deal comes at a time when interest rates are low, SanDisk's stock price is still reasonable and its $1.1 billion acquisition of Fusion-io has just started to become earnings-accretive.

Analysts suggest Western Digital will stage a comeback next year with 21% EPS growth, after the 19% drop across 2015.

Despite the underlying risks of a large acquisition, the synergies and possible impacts of the SanDisk deal are huge -- reinforcing Western Digital's expansion plans. Analysts have 21 "Buy" ratings for the company and only five "Holds" and one "Under-perform."

Warning: Many perils now lurking in the markets could ruin your retirement. Some analysts are even calling for an imminent market crash to rival the one in 1929. Are you making the right moves to build and protect your wealth? To make sure you have enough money to last in retirement, and to get ready for any turbulence ahead, download a copy of our free report: Your Ultimate Retirement Guide.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.