Plenty of "moonshot" stocks have made the headlines in recent years...
Just consider tech giants Nvidia (NVDA) and Palantir Technologies (PLTR). They're all over the financial media. And for good reason...
These companies are part of the huge AI trend. And their stocks' gains are astounding.
Over the past five years alone, Nvidia is up more than 1,350%. Meanwhile, Palantir has soared more than 1,650%.
Those gains completely dwarf the S&P 500 Index's roughly 97% gain over the same time frame.
Nvidia and Palantir were great ways to play the early AI boom. Nvidia made many of the chips that made the boom possible in the first place.
And we all know that the rise of AI has created plenty of opportunities for investors to speculate on. So it makes sense that folks turn to the tech industry repeatedly for the next big winner.
But if you only focused on tech stocks, you would have missed an even bigger gain than those from Nvidia and Palantir over the past five years...
As you can probably guess, this isn't an AI stock. And it helps show that massive gains aren't just limited to the tech sector...
No One Expected This Company to Beat Palantir and Nvidia
This surprise winner is Build-A-Bear Workshop (BBW). The retail chain has more than 600 locations in North America and Europe.
You've probably heard of Build-A-Bear. The company is as simple as it sounds...
It helps customers create and dress their own stuffed animals. The first store opened its doors in 1997. Since then, the chain has been a favorite spot for both kids and adults.
And over the past five years, Build-A-Bear's stock has soared a staggering 2,160%.
In mid-September 2020, the stock traded for around $3 per share. Yesterday, it closed at $74.58 per share.
And the momentum has been building in recent weeks...
In fact, Build-A-Bear is up more than 50% since August 1.
Palantir's stock has also moved higher recently. It surged from August 1 to the middle of the month. But shortly after, it lost some momentum. By now, Palantir is up about 6% since the beginning of last month.
Nvidia's stock fared the worst of the three during this time. It's only up around 2% since August 1.
Of course, the big question after a run like that for Build-A-Bear is what comes next...
Here at Chaikin Analytics, that's where the Power Gauge comes in. It analyzes 20 factors across four different categories – Financials, Earnings, Technicals, and Experts.
So let's see what our one-of-a-kind system has to say about Build-A-Bear today...
The Power Gauge Sees Build-A-Bear's Earnings Growth
Today, the Power Gauge gives the stock a "bullish" overall rating. So off the bat, it sees more upside ahead for Build-A-Bear.
Looking deeper at the individual categories, one highlight is Earnings. Here, Build-A-Bear gets a "bullish" rating.
The stock has a modest price-to-earnings (P/E) ratio of roughly 16.
For comparison, Nvidia has a P/E ratio of about 50. Meanwhile, Palantir's P/E ratio comes in at about 521.
Build-A-Bear also has a history of strong earnings growth...
In fact, the company hasn't missed earnings expectations in the past five quarters. It even beat earnings expectations by 27% for its most recent quarter.
As such, it's no surprise that Build-A-Bear gets a "bullish" rating for the Earnings category in our system. And I would expect the stock to continue to move higher if it can keep up the strong earnings performance.
Meanwhile, the Power Gauge also picks up on the strong technical picture for Build-A-Bear. The stock gets a full-tilt "very bullish" rating for the Technicals category.
The Power Gauge is a great tool for spotting stocks poised for strong performance – regardless of industry.
As I said, the development of AI is creating big winners in the tech industry... But don't allow yourself to get "tunnel vision." For example, just last week, my colleague Joe Austin discussed incredible returns with certain utility stocks.
So don't get overly locked into any single market narrative.
Plenty of high-flying stocks exist outside of tech and AI. I don't think anyone would have expected Build-A-Bear to outperform like it did in recent years.
Here at Chaikin Analytics, we'll continue using the Power Gauge to uncover the next winners... in any industry.
Good investing,
Ethan Goldman
