3 Top Undervalued Stocks Primed for a Multibagger Recovery


  • These three top undervalued stocks are spring-loaded for massive potential rebounds as they see rapid growth ahead.
  • RingCentral (RNG): This communications company offers significant upside as remote work and metaverse trends accelerate demand.
  • Bombardier (BDRBF): The Canadian business jet maker is seeing booming demand and the stock looks primed for further gains.
  • JD.Com (JD): Chinese tech stocks are on sale, and this e-commerce giant can surprise to the upside as growth restarts.
undervalued stocks - 3 Top Undervalued Stocks Primed for a Multibagger Recovery

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Many undervalued stocks have declined significantly during the market selloffs in late-2021 and throughout 2022. While the broader market has recovered, these beaten-down stocks continue to trade sideways, with some even drifting lower. However, their underlying businesses have often continued to see growth, despite their stagnant share prices.

These undervalued stocks resemble coiled springs ready to rebound. If they can deliver any positive surprises or if sentiment shifts, they could break out and deliver multi-bagger returns. Their cheap valuations provide a floor limiting further downside. With upside potential and limited downside risk, it might pay to consider these names. Here are three such undervalued stocks I’m watching right now.

RingCentral (RNG)

A man wearing a headset speaks to someone on a computer.
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RingCentral (NYSE:RNG) is a company that provides internet-based communication services. The company offers phone calls, messaging, and video meetings in one place. RingCentral also provides features like call routing, call forwarding, auto-attendant, and voicemail.

Indeed, this company is very similar to Zoom (NASDAQ:ZM). One similarity is that the stock is trading sideways, much like Zoom has been. The pandemic caused companies like Zoom and RingCentral to boom. But as the pandemic started to wane, both companies plunged and have been rangebound.

However, I believe this stock represents a solid buying opportunity since it actually trades lower than it did before the Coronavirus pandemic. Companies in this space have excellent growth potential going forward. The work-from-home trend is not dead, and with AI and other metaverse trends starting to accelerate, we could see more demand in the coming years for RingCentral and Zoom.

I believe RingCentral has more upside potential of the two since it has been historically more cyclical and still is expected to grow sales at 8% annually going forward. You’re paying just 8.5-times forward earnings for RNG stock. That’s a steal in my books.

Bombardier (BDRBF)

Image of white paper airplanes on horizontal trajectory with one red paper airplane rising upward, symbolizing growth stocks
Source: shutterstock.com/Pasuwan

Bombardier (OTCMKTS:BDRBF) is a Canada-based maker of business jets. It designs and sells aircraft and aircraft parts all over the world. It also provides new aircraft, specialized aircraft solutions, and pre-owned aircraft. In addition, Bombardier offers services after the sale, including parts, service centers, smart services, training, and technical publications.

Demand has been booming for the company’s business jets, and the near-term performance of the stock has been stellar. As I have said before, Trump’s tax cuts have made it possible for individuals to write off business jets as business expenses. This has created a boom in that sector which has continued to drive profits for Bombardier and other private jet companies.

Bombardier’s stock is down 5% over the past year, but it has climbed 53% since October due to its jet demand outperforming expectations. The company grew its first-quarter backlog by 5% year-over-year to $14.9 billion, despite global demand for jets cooling down.

JD.Com (JD)

the JD.com (JD) logo on the outside of a building
Source: testing / Shutterstock.com

Many of you may run away from this pick, but I believe it is a good time to scoop up cheap Chinese stocks. Chinese tech stocks have seen a fire sale over the past couple of months, and I believe it is prime time to buy these stocks at a discount before they take off.

China’s tech crackdown along with a slowing economy caused these stocks to tumble substantially from their peaks. However, with new stimulus measures, the CCP appears to now be more worried about the stock market’s underperformance doing long-term damage to China’s credibility as a place to invest.

I expect further rate cuts in China along with more stimulus measures that should allow JD.Com (NASDAQ:JD) and other peer companies like Alibaba (NYSE:BABA) to start growing again. JD is likely bottoming out at these levels.

China’s e-commerce market is still expected to grow at a 10.1% compounded annual growth rate (CAGR) through 2029, so I have no doubt that JD.Com can restart growth and surprise analysts, given enough time.

On the date of publication, Omor Ibne Ehsan 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.

Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.

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