Smart investors look for growth stocks to maximize gains while minimizing risks.
Sounds simple, right?
That’s often not what happens, though!
Most investors have little experience or have a trait for following the herd, which means they buy stocks at the top.
They might think, “Well, everyone is raving about it, so it MUST be good.”
Or they might think, “It’s already gone up 1354%, so it must be a growth stock.”
Not so fast!
Look to history for things “everyone raves about,” and what is good or bad is not always clear-cut.
The same is true if a stock has already gone up 1354%. Maybe it was a growth stock, but it might not be one anymore.
Past performance does not guarantee future results. You’ve heard that line before, I’m sure. It’s true! Moreover, past performance that gives 1354% growth so far means it’s a helluva long way down if you come in and buy at the top.
Here are three massively undervalued growth stocks with the potential to skyrocket:
NovaGold Resources (NG)
NovaGold Resources (NYSE:NG) is a Canadian company quietly working four sites for gold mining in Alaska. In May 2024, ten directors were elected to consolidate the company’s future direction.
One of the issues holding them back from a price breakout was the commercialization of their Donlin asset—or the lack thereof. So, the recent board elections have put them back on track. That said, it may take a few years for commercialization to happen. But the certainty of the company’s direction is enough for investors to buy in and help that long-awaited breakout.
NG’s report for the first quarter of 2024 announced $118 million in their treasury. This gives them lots of investment flexibility, and they are in good shape for a price break upwards.
Technicals show they are starting to pierce descending resistance dating back to 2003. Given market conditions in the precious metals and space, I put NG down as a massively undervalued growth stock.
SSR Mining (SSRM)
Another Canadian mining company is SSR Mining (NASDAQ:SSRM). It had a massive flush in February 2024, which provides buying opportunities.
The bottom has been established at $610. The months since then have seen steady recovery, currently ranging between $720 and $750 for two months. This strong “basing out” activity from a technical perspective shows promising support for those wanting to buy their growth stocks close to the bottom.
Similar to NG, SSRM also announced its ten directors in May 2024 after elections were held. Shareholders voted almost unanimously for each of the ten directors. Such a united company will likely show decisive action in investments and mining projects.
A gap in the chart has yet to be filled. This indicates an opportune time to buy near the bottom for shorter-term gains. However, SSRM’s long-term potential makes it one of the better growth stocks currently available.
First Majestic Silver Corporation (AG)
Here is another mining company based out of Canada. It is First Majestic Silver Corporation (NYSE:AG).
Ranging between $6 and $24 since 2009, it is currently around $9 after what looks like a first leg up on the Elliott Wave pattern. The exciting thing about this growth stock is how quickly it went from the bottom to the top of the range in its last three cycles.
It went from $5 to $23 in just eight months in 2010.
Then, it went from $4 to $23 in just six months in 2016.
It went from $7 to $22 in just nine months in 2020.
These are fast moves, but you might notice from this history lesson that they also came down again! So timing is important here. What is on your side is that AG is only at $9 so far from its recent $6 low.
What is also on your side is that the precious metals market is entering a massive bull market. So this time, the chances are good that the range beyond the $24 top will finally break. And with a $102 million cash position, they’re in a solid position to make that happen.
On the date of publication, Sam Farnham 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.
