Under the Radar: Low Coverage. Low Ownership. High Upside?

I refer to Peter Lynch fairly often in my conversation about stock picking. The reason is really simple.

He is one of the best stock pickers that ever lived.

In 1977 Lynch was given the Fidelity Magellan fund to manage at the ripe old age of 33. Lynch immediately put his stamp on the fund and went on to return over 29% annually to investors.

$1 invested in the fund on the day Lynch took the reins was worth about $30 when he retired to spend more time with his family and watch the accursed Red Sox play baseball,

It is one of the best track records ever compiled by an investment manager.

He has written several bestsellers on investing including One up on Wall Street and Beating the Street.

No one reads them today because they make no promises about getting rich in the next few weeks and talk about boring stuff like bank stocks and retailers.

I mean the guy talked about pantyhose, donuts and tacos all the time.

Who cares about that?

If you care about making money you should.

Lynch was a huge fan of stocks with low institutional ownership. He once wrote that "If you find a stock with little or no institutional ownership, you've found a potential winner. Find a company that no analyst has ever visited, or that no analyst would admit to knowing about, and you've got a double winner. When I talk to a company that tells me the last analyst showed up three years ago, I can hardly contain my enthusiasm. "

That is exactly  how I feel and the reason I write Under The Radar every week.

Institutional money is what makes stocks go higher. If we can get into stocks before they do, the buying pressure of the cash invested by hedge funds, ETF's, pensions and endowments are going to be what drives our stock up to loves that give us profits that are multiples of our purchase price overtime

A banking my old stomping grounds hometown is perfect example of a  stock  Wall Street is ignoring that has the potential for huge gains. Only one analyst follows the stock, and institutions own less than 35% of the shares.

Only one analyst follows the stock.

Capital Bancorp (Ticker: CBNK) is a Rockville, Maryland based commercial-focused community bank that has carved out a profitable niche in the Mid-Atlantic region while building scalable national platforms. Operating through Capital Bank, N.A., the company blends traditional commercial banking with innovative digital strategies. Its core business includes commercial and industrial lending, real estate financing, and treasury services for middle-market businesses and nonprofits across the Washington, D.C. and Baltimore corridor. Alongside that, Capital Bank Home Loans runs a national mortgage origination platform, while the OpenSky brand has become a leading issuer of secured and unsecured credit cards, serving underbanked consumers and those looking to rebuild their credit. The Windsor Advantage unit further diversifies revenue with specialized financial products and fee-based services.

What sets Capital Bancorp apart is its branch-lite strategy, focusing on efficiency and technology rather than heavy physical infrastructure. This approach allows it to maintain high profitability metrics while expanding deposit and loan bases. Since its IPO in 2018, the bank has demonstrated steady growth, supported by both organic initiatives and strategic acquisitions. The combination of high-touch commercial banking and fintech-driven consumer platforms provides a balanced model that has delivered strong returns on equity and a resilient net interest margin. Capital Bancorp is positioning itself as a hybrid of traditional community banking discipline and modern digital finance execution.

Using the resources on Benzinga Pro I also uncovered Radcom Ltd. (Ticker: RDCM) a high growth company that offers cloud and networking services to the telecommunications industry. Institutions own less than 50% of the shares and only one analyst is following company.

Radcom Ltd. is one of those under‑the‑radar Israeli technology companies that continues to deliver real growth in a specialized corner of the market. The company focuses on service assurance and customer experience solutions for telecom operators, particularly those deploying 5G networks. Its flagship RADCOM ACE platform is cloud‑native and fully virtualized, providing real‑time analytics and network intelligence that carriers rely on to monitor performance, detect anomalies, and improve customer quality of experience.

This shift away from traditional hardware probes to a software‑as‑a‑service model has been transformational. It has expanded gross margins, created a more scalable business, and given Radcom a defensible niche as telecom networks become more complex.

The financial results confirm the story. In the first quarter of 2025, Radcom reported earnings of $0.15 per share, more than triple the $0.049 earned in the same quarter a year ago. Revenue for the trailing twelve months reached $63.5 million, with net income of $8.65 million. Gross margins run at about 75 percent, and the company is producing a net profit margin of 13.6 percent.

Radcom essentially carries no debt and held nearly $95 million in cash at year‑end 2024, which gives it a strong balance sheet and flexibility to continue expanding. Analysts project annual revenue growth of more than 12 percent, which would extend a streak of six consecutive years of growth.

Finding growth stocks  before the big money begins to pile in is a key to investment success. It was cornerstone to the success Peter Lynch had as he rang up unprecedented returns.