Timing your investment in the best bargain stocks can unlock tremendous upside potential.

While often overlooked by mainstream investors, bargain stocks can prove lucrative for those willing to stomach these risks. These hidden gems are undervalued and typically fly under the radar, making them attractive. These trading below their intrinsic values offer a greater margin of safety and protection from downside risk. Moreover, they can yield impressive returns when their conditions improve, and they start posting stronger financial numbers.

Investing in bargain bets becomes doubly important ahead of potential interest rate cuts this year. Rate cuts will likely trigger a sustained rally in stocks, resulting in a substantially broader market than in the past year.  

That said, here are three best bargain stocks with particularly optimistic outlooks that potentially open the door to lucrative opportunities. This approach effectively aligns current market optimism while securing a favorable position to pounce on upcoming market catalysts.

ZIM Integrated Shipping Services (ZIM)

ZIM Integrated Shipping Services (NYSE:ZIM) has witnessed a massive rally in its stock in the past 12 months, buoyed by improving operating conditions and impressive performances. Moreover, the reinstatement of dividends is an added sweetener to its compelling bull case.

ZIM’s fleet renewal efforts and the surge in its freight rates have been key drivers of its stock market performance. Moreover, its proactive steps in enhancing its fleet, especially with its LNG-powered vessels, align well with industry trends towards sustainability and efficiency. On top of that, the overall outlook for the shipping industry remains positive, pointing to healthy demand and elevated freight rates. The positive outlook is shown in ZIM’s first-quarter (Q1) results, where revenues surged by 14% to $1.56 billion while delivering a $92 million net income.

Hence, with its strategic adjustments and healthy financial positioning, ZIM stock is an excellent bargain bet, trading at just 0.5 times forward sales.

Lithium Americas (LAC)

Lithium Americas (NYSE:LAC) stands out in lithium and is positioned for substantial long-term growth. However, given the slowdown in lithium prices and equity dilution, LAC stock has shed 58% of its value year-to-date (YTD). Hence, the current market conditions present a golden opportunity for investors targeting a long-term investing horizon.

Notably, LAC’s bull case hinges on the Thacker Pass asset in the U.S., which boasts an impressive after-tax net present value of $5.7 billion. To put things in perspective, LAC boasts a market capitalization of $578 million, roughly 89% behind Thacker Pass’s total valuation.

Another major positive for LAC is its stellar backing for project construction, highlighted by a recent $2.26 billion federal loan and a $650 million investment commitment from General Motors (NYSE:GM). Major construction is set to begin later this year, and with additional strategic partnerships and potential upticks in lithium prices, its future looks promising.

Coterra Energy (CTRA)

Coterra Energy (NYSE:CTRA) is a dominant player in the U.S. natural gas and oil production landscape.

Over the years, it has been a hit with investors for its superb dividend profile. It has paid dividends in the past 33 consecutive years, with its 5-year payout growth at 23%. Moreover, its commitment to returning half of its free cash flow to shareholders reinforces its investor-friendly positioning.

With the drop in natural gas prices, Coterra seeks to increase its liquid production strategically. This strategy bodes remarkably well, considering the recent bullishness in crude oil futures. Strong summer demand and geopolitical tensions point to a promising outlook for oil prices.

For 2024, Coterra has raised its oil production forecast to 107,000 barrels per day, up from 102,000. This increase is linked to the firm’s efficient, well-performing and accelerated production processes, positioning it effectively in recovering market conditions.

On the date of publication, Muslim Farooque did not have (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.

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.