3 Massively Undervalued Growth Stocks for Multibagger Returns


  • Here are the undervalued growth stocks to buy for robust returns in the next 24 months.
  • Cronos Group (CRON): The company has a healthy cash buffer to deploy for aggressive growth and improving financial metrics.
  • Albemarle Corporation (ALB): Albemarle has visibility for sustained growth in lithium conversion capacity, boosting cash flows.
  • Kinross Gold (KGC): This massively undervalued gold miner has a strong liquidity buffer and healthy cash flows.
undervalued growth stocks - 3 Massively Undervalued Growth Stocks for Multibagger Returns

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All investors desire to have several multibagger stocks in their portfolios. One secret to churning out regular investments that fit this category is to buy when the company does not get the attention it deserves. Growth stocks in the limelight are generally overvalued. On the other hand, under-the-radar growth stocks are undervalued and can deliver multibagger returns in quick time.

There have been growth stocks that delivered multibagger returns in the first half of 2023. As an example, Riot Platforms (NASDAQ:RIOT) has quadrupled from undervalued levels year-to-date.

Given the point that overall market conditions remain somewhat challenging, I would be conservative. I believe that the undervalued growth stocks discussed can double or triple in the next 24 months. Clearly, these stocks can be portfolio catalysts.

Let’s discuss the reasons to be bullish on these interesting growth stories.

Cronos Group (CRON)

Even Contrarian Investors Should Hold off on CRON Stock for Now

Recently, Tilray Brands (NASDAQ:TLRY) acquired eight alcohol and beverage brands from Anheuser-Busch InBev (NYSE:BUD), and the stock surged by 36%. That is relevant here as Cronos Group (NASDAQ:CRON) is another name with robust financial flexibility.

As of Q2 2023, Cronos reported cash and equivalents of $841 million. That provides the company with scope for aggressive organic and acquisition-driven growth. It’s also worth noting that the company expects net change in cash to be positive in fiscal year 2024.

Therefore, cost-cutting and streamlining of the supply chain will deliver positive results. I must add here that Cronos currently commands a market valuation of $672 million, which is less than the company’s cash buffer. That puts into perspective the extent of undervaluation.

I also like the point that Cronos has a presence in the recreational as well as medicinal cannabis business. In the wellness segment, Cronos is active in Canada and Israel. With focus on evidence-backed medicinal cannabis, I believe that there is ample scope for expansion in Europe.

Albemarle (ALB)

Albemarle (ALB) logo on a mobile phone screen
Source: IgorGolovniov/Shutterstock.com

Albemarle (NYSE:ALB) looks massively undervalued at a forward price-earnings ratio of 7.62. I believe that the 0.82% dividend yield stock is poised for multibagger returns in the next few years.

In terms of business developments, Albemarle has amended its agreement with Mineral Resources (OTCMKTS:MALRF). The company is expected to have full ownership of the Kemerton lithium processing facility. Further, the company will now have 50% ownership in the Wodgina mine in Australia and a 100% stake in the Qinzhou and Meishan facilities in China.

Albemarle has also entered into an agreement with Ford (NYSE:F) to supply more than 100,000 metric tons of lithium hydroxide from 2026 to 2030. Overall, the company expects lithium sales volume to increase at a CAGR of 20% to 30% through 2027. This will translate into sustained revenue growth and cash flow upside.

For Q2 2023, Albemarle reported stellar revenue and EBITDA growth of 60% and 69% on a year-on-year basis. With operating cash flow guidance for 2023 in the range of $1.2 to $1.8 billion, the company is well-positioned to make aggressive investments.

Kinross Gold (KGC)

Cellphone with business logo of Canadian mining company Kinross Gold Corp. on screen in front of webpage.
Source: T. Schneider / Shutterstock.com

Kinross Gold (NYSE:KGC) stock has trended higher by 45% in the last 12 months. However, the stock remains massively undervalued at a forward price-earnings ratio of 15. Additionally, KGC stock offers a healthy dividend yield of 2.36%.

It’s worth noting that Kinross commands a valuation of $6.18 billion. As of Q2 2023, the company reported a liquidity buffer of $1.9 billion. Furthermore, the company is on track to deliver annualized operating cash flow of $1.8 billion. I would add that the company reported mineral reserves of 2.1 million ounces as of December 2022. As compared to the company’s assets and cash flow potential, there is a clear valuation gap.

In June 2023, Bloomberg reported that Kinross rejected a takeover approach from Endeavour Mining (OTCMKTS:EDVMF). A potentially attractive offer might be in the cards, and that’s a catalyst for a KGC stock rally. Even without any potential acquisition, the stock is attractive for multibagger returns.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/08/3-massively-undervalued-growth-stocks-for-multibagger-returns/.

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