For most investors, targeting a return of 10% or so each year is pretty respectable.
Every now and then, though, it's worth casting your eye over stocks which could outperform the market by a significant amount, and deliver outsized returns.
I've had a look at the recent analyst reports and selected three companies that, at least if the analysts are to be believed, are significantly undervalued at current levels.
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Catapult Sports Ltd (ASX: CAT)
Catapult is a global leader in providing technology for professional sports teams to monitor, track, and evaluate their players.
The company held an investor day recently and also put out a trading update in March, which indicated that the company expected management EBITDA to grow by about 50% year on year, "as the company's profitability continues to outpace its strong top-line growth''.
The analysts at Canaccord Genuity attended the investor day and said the company was targeting growth to 5,000 teams in the next two to three years, then 7,000 to 10,000 teams in five to six years.
They added:
Management has identified several greenfield opportunities across global Soccer (lower division levels not using any tech) and Basketball (currently about 100-150 teams weighted to US-based collegiate level), with potential expansion into other US college sports (e.g. Athletics, Ice hockey).
Canaccord has a price target of $8 on Catapult shares, compared with $3.22 now.
Clarity Pharmaceuticals Ltd (ASX: CU6)
Clarity has two Phase III clinical trials in the prostate cancer space that will report this year, which could trigger a major rerating of the company's shares, the analysts at Canaccord Genuity say.
The addressable market for the company's drugs would be about $US2.9 billion annually in the US, Canaccord said, providing the potential for major revenue for the company.
They added:
Should 64Cu-SAR-bisPSMA be approved, and subsequently launch in 2H28, by FY35 we see Clarity generating US$860m in sales, representing 29% share.
Canaccord has a price target of $8.41 on Clarity shares compared with $3.15 currently.
Global Lithium Resources Ltd (ASX: GL1)
Shaw and Partners has just initiated coverage on this company with a buy recommendation and a very bullish share price target.
Global Lithium is developing the Manna Lithium Project in Western Australia, and released a definitive feasibility study on it in December, envisaging a 14.3-year mine life with a payback period of 3.5 years.
Shaw's report on the company said the Manna project was of "world class scale and quality".
They added:
The project is designed for high efficiency, utilising ore sorting to optimize mill feed and reduce waste. This results in an extremely competitive all in sustaining cost of $1,101/t on our numbers, positioning Manna in the lowest quartile of the global lithium cost curve. This low-cost profile ensures the project remains resilient and commercially viable even during periods of lithium price volatility.
Shaw has a price target of $1.50 on Global Lithium shares compared with the current price of 51.5 cents.
