Five Stocks Making Waves: From Blue Chips to Undervalued Microcaps

Market Snapshot: January 2026

The investment landscape is showcasing interesting contrasts right now. While established financial services and healthcare names are showing resilience, some overlooked opportunities are emerging in the microcap space. Here’s what’s catching investor attention across different market segments.

Established Giants Under the Microscope

American Express (AXP): The Spending Story Continues

American Express has outpaced its industry peers significantly, climbing 15.4% over six months while the Financial Services sector retreated 16%. The driver? Robust spending momentum. Revenues have expanded 9% year-over-year through the first nine months of 2025, powered by new product rollouts, strategic partnerships, and a clear rebound in travel and entertainment expenditures.

The company’s financial metrics paint a compelling picture. Return on equity sits at an impressive 33.4%, well above industry benchmarks. Capital returns have been aggressive—$2.9 billion distributed through dividends and buybacks in Q3 alone. Management is clearly prioritizing shareholder returns while positioning for the future through investments in tech-savvy customer acquisition.

However, headwinds exist. Operating expenses continue climbing, pressuring margins. Loan loss provisions remain elevated given macroeconomic uncertainties. The company also faces structural challenges in capturing emerging non-card payment trends, and its substantial debt load means significant interest expense burdens. A measured approach to this name seems warranted despite the impressive performance.

Intuitive Surgical (ISRG): Surgical Innovation Gaining Traction

Intuitive Surgical’s stock climbed 6.6% over six months, underperforming the Medical Instruments industry’s 11.6% gain—though the company’s operational momentum tells a different story. The Q3 results exceeded expectations on both revenue and earnings fronts.

The da Vinci 5 system is resonating with hospitals. U.S. placements reached 240 units, bringing the total installed base to 929. International approvals in Europe and Japan signal a phased global expansion beginning. System placements totaled 427 overall, reflecting robust demand from healthcare providers worldwide.

Procedure volume growth stands at 19% year-over-year globally, with domestic markets up 16% and international markets accelerating 24%, driven by expansion in general surgery, non-urology procedures, and emerging markets like India and Korea. Upgrade demand is evident through rising trade-in volumes as hospitals modernize their surgical suites.

The margin picture is tighter, however. Gross margins compressed due to higher manufacturing costs and tariff pressures. International markets face budget constraints. Management raised 2025 guidance to 17–17.5% growth with margins expected at 67–67.5%, but Medicaid policy uncertainty remains a monitoring point.

Booking Holdings (BKNG): Travel’s Expansion Strategy

Booking’s shares have gained 7.1% over the past year, though it trails the Internet Commerce sector’s 11.1% advance. Yet the company’s strategic positioning deserves attention. Its global network, powerful brand portfolio, and shifting customer preference toward direct bookings are driving margin expansion and loyalty.

The Connected Trip strategy—integrating accommodations, transportation, and attractions—is working. This, combined with expanding artificial intelligence capabilities, enhances user engagement and cross-selling opportunities. Operational automation is improving partner efficiency and customer satisfaction simultaneously.

Liquidity remains solid, cash generation is strong, and deep partner relationships provide competitive moats. Yet challenges persist. U.S. travel demand is softening, marketing spend remains elevated to drive growth, and competition from other online platforms intensifies. Domestic market concentration could become limiting as affordability pressures affect pricing power in key regions.

Hidden Value: The Microcap Opportunity

Daily Journal Corp (DJCO): Securities Portfolio as Foundation

Daily Journal has surged 61.8% over six months—significantly outpacing the Publishing sector’s 35.5% gain. This microcap, valued at $894.14 million, represents an interesting case study in hidden value.

The secret? A $493 million marketable securities portfolio that generated $134.3 million in unrealized gains during fiscal 2025. Even after losing its longtime figurehead Charles Munger, the board maintains conservative asset stewardship, ensuring the company needs no external capital infusions.

The real growth engine is Journal Technologies, where fiscal 2025 revenues jumped 32% year-over-year to $69.9 million, with pretax income reaching $12.7 million. E-filing solutions and milestone-based contracts are fueling this expansion. The business model is capital-light, working capital stands at $500.4 million, and operating cash flow turned positive at $13.3 million.

Valuation speaks to opportunity: the stock trades at 4.57X EV/sales and 2.29X price-to-book, both below sector medians. Risks include government revenue timing volatility, rising competition in justice technology, and advertising headwinds from legislative changes affecting legal notices. Underutilized real estate also drags on efficiency metrics.

Star Group L.P. (SGU): Consolidation Play in Energy Services

Star Group’s shares climbed 9.4% over six months, trailing the Electronics-Miscellaneous Products sector’s 25.9% gain. This $403.63 million microcap operates as a consolidator in the fragmented heating oil and propane market across the Northeast and Mid-Atlantic regions.

The tuck-in acquisition strategy builds route density, operational efficiency, and margin strength. Management demonstrates disciplined pricing, cost control, and integration capabilities that protect profitability through cycles. Expanding HVAC services diversification creates counter-seasonal earnings buffers and deepens customer relationships.

Capital allocation remains shareholder-friendly yet adaptable. Selective technology and artificial intelligence adoption should enhance service productivity and customer retention over time.

The risk profile centers on customer attrition pressures, limited organic growth opportunities, weather-driven earnings swings, rising fixed costs, and acquisition-related financing burdens. Seasonal working capital fluctuations create periodic cash flow tightness. Longer-term regulatory pressures and electrification trends in core markets pose structural headwinds to the traditional heating oil business model.

The Takeaway

Market conditions are rewarding both execution stories (AXP, ISRG) and hidden value propositions (DJCO, SGU). The contrast between established names managing growth and microcap consolidators pursuing opportunity illustrates how diverse today’s investment landscape has become. Each requires different risk tolerance and time horizons, but all merit investor consideration as markets navigate 2026’s evolving dynamics.