3 Stocks Hedge Funds Say Are Undervalued

PlantX Life Inc. (CSE: VEGA) (Frankfurt: WNT1) (OTCQB: PLTXF)

In a recent independent research report on PlantX, New York-based hedge fund Capital Y Management called PlantX “a market leader with groundbreaking activity in a growing industry with long-term tailwinds.” A 12-month price target of CA$0.67 per common share has been set by Capital Y Management, which would equate to an enterprise value of CA$68 million for PlantX.

According to the report, PlantX’s partnerships with Amazon and Walmart would likely generate 12% more sales for the company. PlantX’s stock, analysts say, could potentially be valued “between C$1.52 and C$2.91 by the end of fiscal 2025.” The massive growth track ahead of the company and this price prediction allow investors for potential long-term multibagger returns.

There is no doubt that PlantX has the potential for a bright future. Despite the economic uncertainty, PlantX’s revenues have steadily increased over the past few quarters. In June 2022, PlantX generated $1.4 million in gross revenue, an increase of 97% compared to the corresponding period of the previous year. The company has formed many strategic partnerships and is also entering the $284 billion alcoholic beverage market. With its diverse portfolio of products and services, the company is well positioned for strong growth in the expanding herbal market.

Capri Holdings Ltd. (CAPRI)

Capri Holdings stock has suffered a selloff this year despite robust growth. The stock is down 27% this year, but that has only attracted institutional investors to the company. Hedge funds such as Counterpoint Mutual Funds LLC and National Bank of Canada FI have increased their stake in the company this year. Despite the macroeconomic challenges, the company reported strong results in the first quarter of 2022 and issued a better-than-consensus forecast.

Capri Holdings Limited is a global fashion group that designs, manufactures and sells a wide range of fashion products such as clothing, accessories, watches, jewelery and eyewear. Michael Kors, Versace and Jimmy Choo are three of the most popular and iconic brands in the world owned by the company.

Inflationary pressures could lead to a temporary slowdown in spending on fashion and luxury items, but Capri Holdings is well positioned to grow, with the high-end fashion market expected to reach more than $100 billion by 2026.

Conclusion

Economic uncertainty will continue to fuel market volatility and, in the near term, investors could see companies with strong fundamentals dragged down by negative sentiment surrounding the global economy and stock markets. Companies that have sufficient resources and have taken strategic steps to overcome these macroeconomic challenges are likely to come out on top in the long run. The three companies featured in this article are examples of such companies that could reward long-term investors generously.

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