After enduring the tumult of late 2021 and 2022 market selloffs, many undervalued stocks have withstood a relentless pummeling. While the broader market has found its footing, these downtrodden equities remain in a state of suspended animation, seemingly adrift. Yet, beneath the surface, these companies have continued to exhibit signs of vitality, with their underlying operations defying the downward pull on their stock prices.
Resembling coiled springs poised for a rebound, these undervalued stocks hold the promise of life-changing returns if they can muster any positive surprises or witness a sentiment shift in their favor. Trading at discounted valuations, they offer a protective floor that mitigates the risk of further descent. Astute investors may find merit in exploring these hidden treasures that have the potential to deliver substantial gains. Here are three such undervalued stocks worth considering:
Ringing in Potential with RingCentral (RNG)
RingCentral (NYSE: RNG), a provider of internet-based communication services, offers a comprehensive suite of communication tools, including phone calls, messaging, and video conferencing. Drawing parallels to its counterpart Zoom (NASDAQ: ZM), RingCentral finds itself in a similar holding pattern, mirroring Zoom’s trajectory in recent times. The pandemic-induced surge in demand for remote communication solutions catapulted both companies to new heights, only to witness a subsequent decline as the pandemic receded.
Despite the lull, RingCentral presents a compelling buy opportunity, trading below pre-pandemic levels. As the remote work trend persists and emerging technologies like AI and the metaverse gain momentum, the demand for RingCentral’s services is poised to surge in the future. With a history of cyclical movements and an anticipated 8% annual sales growth projection, investing in RNG at a mere 8.5 times forward earnings appears exceedingly attractive.
Flying High with Bombardier (BDRBF)
Bombardier (OTCMKTS: BDRBF), a Canada-based producer of business jets, has seen a surge in demand for its aircraft amidst a remarkable performance streak. Driven by tax incentives enabling individuals to write off business jet expenses, the business aviation sector has experienced a boom, propelling profits for companies like Bombardier.
While the stock endured a 5% decline over the past year, it rebounded by an impressive 53% starting from October, buoyed by robust jet demand that exceeded expectations. Despite the softening global demand for jets, Bombardier managed to grow its first-quarter backlog by 5% year-over-year, totaling $14.9 billion.
Discovering Hidden Value in JD.Com (JD)
Amidst the prevailing skepticism surrounding Chinese stocks, JD.Com (NASDAQ: JD) emerges as an intriguing opportunity in the tumultuous landscape of discounted Chinese tech equities. Following a significant downturn triggered by China’s tech crackdown and economic deceleration, a newfound emphasis on stimulus initiatives signals a potential resurgence in these beleaguered stocks.
Foreseeing additional rate cuts and stimulus measures in China that could fuel a revival in prosperity for JD.Com and its peers, the e-commerce giant appears to be reaching a nadir at its current valuation levels. With China’s e-commerce market poised for a 10.1% compound annual growth rate through 2029, JD.Com stands ready to reignite growth and defy analyst projections given sufficient time.