You’ll find undervalued stocks in most market conditions as investors get overly bullish on certain industries and leave others behind and value them irrationally. These stocks then eventually recover once the pendulum swings the other way.
Everyone has been piling into the hottest tech and AI stocks recently, and this has undone the risk-off sentiment investors had two years back. The rotation of gains into these hot tech companies has lifted them significantly, but it has ended up crushing certain stocks, which now trade well below the fair price. These undervalued stocks could end up delivering triple-digit returns on their way back up.
This post originally appeared at Money Morning.