Many undervalued stocks have faced significant declines during market selloffs in late-2021 and throughout 2022. While the broader market has rebounded, these beaten-down stocks have remained stagnant or drifted lower. Despite this, their underlying businesses have continued to show growth, creating an exciting opportunity for savvy investors.
These undervalued stocks are akin to tightly wound springs, waiting for a chance to break out. If they can deliver positive surprises or experience a shift in sentiment, they could yield multibagger returns. Their bargain valuations act as a safety net, limiting further downside. With the potential for significant gains and minimal risk, these stocks are definitely worth considering. Here are three undervalued stocks catching my eye.
RingCentral (RNG)
RingCentral (NYSE: RNG) specializes in internet-based communication services, providing phone calls, messaging, and video meetings in a unified platform. Features like call routing, call forwarding, auto-attendant, and voicemail are also part of RingCentral’s offerings.
Similar to Zoom (NASDAQ: ZM), RingCentral’s stock has remained relatively flat, reflecting the challenges faced by companies in this sector post-pandemic. However, RingCentral presents a compelling investment opportunity, trading at lower levels than before the pandemic. With the ongoing remote work trend and the rise of AI and metaverse technologies, demand for RingCentral’s services is likely to grow in the future.
Trading at just 8.5 times forward earnings, RingCentral shows promising upside potential, making it an attractive buy in the current market environment.
Bombardier (BDRBF)
Bombardier (OTCMKTS: BDRBF) is a Canadian manufacturer of business jets, offering a range of aircraft and aircraft parts globally. With a focus on new aircraft, specialized solutions, pre-owned aircraft, and post-sale services, Bombardier has seen a surge in demand for its business jets.
Despite a 5% decline in the stock over the past year, Bombardier has experienced a 53% increase since October, driven by robust demand for its jets surpassing expectations. The company’s first-quarter backlog growth of 5% year-over-year to $14.9 billion demonstrates resilience in a cooling global jet market.
JD.Com (JD)
Amid the recent downturn in Chinese tech stocks, JD.Com (NASDAQ: JD) presents an attractive opportunity for investors seeking value in this beaten-down segment. The Chinese tech sector has witnessed a significant pullback due to regulatory concerns and economic slowdown, creating favorable entry points for discerning investors.
With China’s government hinting at stimulus measures to bolster the stock market and stimulate economic growth, companies like JD.Com and Alibaba (NYSE: BABA) are poised for resurgence. JD.Com, in particular, shows signs of bottoming out at current levels, with the Chinese e-commerce market projected to grow at a 10.1% CAGR through 2029.
Given the anticipated policy interventions and the market’s growth trajectory, JD.Com stands a good chance of reigniting growth and exceeding analyst expectations in the near future.