If a stock has been around a while, investors might get bored with the same old performance. Couple that with a few poor quarters, and even if those quarters are due to a market slump investors start to get wary. This can lead to sometimes significant sell offs.
Looking at the three stocks I mention here, investors can definitely take advantage of an opportunity for serious growth in the near future. Each stock has a strong future outlook, but offer a stock price at or near book value. So let’s dive in.
Let’s start with a fun stock like Spin Master Corp. (TSX:TOY), an award-winning global children’s entertainment company that create toys such as PAW Patrol Ultimate Rescue Fire Truck, and Cool Maker KumiKreator, both of which took away the “Oscar” of the toy industry.
Since its initial public offering (IPO) in 2015, Spin Master has grown 102%, but only a year ago it had almost reached $60 per share before slumping during the summer. This was due to outside factors, such as a market slump and the bankruptcy of Toys “R” Us, making the current share price in Spin Master unwarranted.
Once the market improves, investors should expect this stock to take off yet again, quickly working towards that $60 per share mark yet again.
Next up, we have Encana Corp. (TSX:ECA)(NYSE:ECA), a stock in the midst of a transition that left investors a little wary given the amount of debt it incurred. The oil and gas company is now working toward becoming a premium provider of oil and gas, but moving away from the cheap stuff is expensive.
There are two points investors should then look forward to. First, Encana has tightened its belt and sold off non-essential assets to pay off its debts, setting up a basis for cash in hand. Second, once these premium products are producing, shares should soar.
For now, however, the stock is trading well below book value, offering investors with the perfect opportunity to get in before the oil and gas industry rebounds and the company starts announcing some big changes.
Finally, we have TC Energy Corp. (TSX:TRP)(NYSE:TRP), another energy company well below book value that has been tightening its belt lately. Most recently, it sold U.S. midstream assets for US$1.7 billion to fund its portfolio of natural gas pipeline, liquids pipelines, and power generation projects.
This comes off the back of more than US$1 billion in losses in 2016, when the company made a huge shift. The stock is now a top performer, but still undervalued for investors seeking to get in before the oil and gas rebound. Even during this time, the stock has been trending steadily upwards. Once oil and gas makes a comeback, the stock should absolutely soar as high as $75 according to some analysts.
You don’t have to buy premium to get a hold of premium stocks, and these three are prime examples of that. By investing today, you give yourself an ideal opportunity to buy on the ground floor before some major growth. Of course, investors should always use this as a starting point to their own research, and Motley Fool is a great place to start.
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Stock #1 is a household name – a one-time TSX blue chip that too many investors have left sitting idly in their accounts, hoping the company’s prospects will improve (especially after one more government bailout).
Still, our analysts rate this company a firm SELL.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool owns shares of Spin Master.