Order backlogs are among my favorite bullish catalysts.
To be clear, an order backlog represents the collective value of orders for which customers have made contractual commitments.
Think of order backlogs as the foremost measure of a company’s health.
Of course, 95% of order backlogs are enjoyed by massive companies — ones with well-known products in high demand.
For example, Boeing is known for having a terrifically long order backlog, which has led to a tremendously resilient stock that hardly ever goes down.
On rare occasions, even a small cap can encounter an order backlog.
In fact, Ballard Power Systems (Nasdaq: BLDP) just announced an order backlog of $263.5 million.
BLDP’s market capitalization is a miniscule $905 million, and the news has shot shares into orbit.
Expect BLDP to remain vertical well into December as the momentum throttles up.
Have I sold you on the awesome power of order backlogs? Good! Because you’re about to discover three more “backlog” stocks to start buying ASAP.
Pent-Up Demand Ready to Explode
Few things can send a stock soaring on a one-way ticket… and backlogs are one of them.
Why?
Backlogs are an early indicator of pent-up demand for a company’s products and services — which soon translate into rising sales.
And when they occur in small-cap stocks, which are often overlooked by Wall Street… the gains can be astronomical.
Here’s one such stock poised to profit from a massive backlog…
CPI Aerostructures Inc. (NYSE: CVU) makes aircraft parts for fixed-wing aircraft and helicopters.
It supplies parts for some of America’s best-known aircraft, such as the F-16 fighter jet and the UH-60 Black Hawk helicopter.
The company currently enjoys a $418 million backlog — more than five times CPI Aero’s current market value ($79 million).
Even better, 77% of the firm’s backlog is multiyear defense contracts.
