3 Undervalued Stocks That Could Pop in December CIA inWritten by Adam Othman at The Motley Fool Canada Not all undervalued stocks are ripe for growth in the near future. Some stay undervalued for a very long time, sliding down further and further. But there are a few undervalued stocks that might start spiking in a matter of weeks. These are the undervalued stocks you should look for if you are seeking short-term growth or validation for whether or not you made the right call.
An iron ore company
The problem with companies like Champion Iron (TSX:CIA) is that their valuations rely more on the demand of the underlying asset rather than the fundamental strength of the company itself. But that doesn’t mean the stock moves completely in tandem with the global iron demand. Take Champion Iron’s last five years as an example.
The stock spiked almost 167% from late 2016 to early 2017, almost 160% in 2019, and over 400% between the 2020 crash and 2021 spike. The stock is currently trading at a fraction of its recent peak, but there is optimism in the iron market, thanks to demand rising in China. If that becomes the trigger, the stock that’s currently trading at a price-to-earnings multiple of just 3.5 might pull off another three-digit growth.