I love a good “sleeper” stock.
These are stocks that fly under most investors’ radars.
Of course, many sleeper stocks are ignored for a reason. They’re bad companies.
But the BEST sleeper stocks are only ignored by retail traders… not Wall Street.
That brings me to my newest Trade of the Week: Freshworks (FRSH).
Freshworks is a $6.9 billion software company. It utilizes artificial intelligence (AI) to help companies like Klarna and Bridgestone better serve their customers.
It’s not well known among everyday traders. But it’s caught the attention of Wall Street.
I say this for a couple reasons. One, Freshworks’ buying volume has picked up in recent months. Investment bank Jefferies also upgraded FRSH to a “Buy” three weeks ago, giving it a $30 price target. Needham also recently reiterated its “Buy” rating on the stock. It also has a $30 target.
More important, the price action is very bullish.
FRSH bottomed way back in June 2022, long before the indices did. Since then, it’s rallied 118%. And yet, hardly anyone is talking about it!
I think that will change soon…
Below, we can see FRSH is off to a hot start this week. It’s up 4.1% after bouncing off its rising 10-week moving average.
I believe this level will serve as a launchpad for the stock and ignite its next major move higher:
Source: StockCharts
Buy a starter position in FRSH today. I believe it can hit $38 within the next 12–18 months.
Exit your position if FRSH closes below $20. That gives us a risk-reward ratio of 5:1 on this trade.
Action to take: Buy FRSH at current market prices.
Risk management: Exit your position if FRSH closes below $20.
Justin Spittler
Chief Trader, RiskHedge
