There is no better strategy than value investing to make money consistently in the markets. Among various undervaluation indicators, a low price-earnings ratio helps in spotting attractive stocks. This column focuses on low-PE stocks to buy that can deliver 100% returns in the next 12 months.

In simple words, the PE ratio shows the amount an investor will pay in the markets for every dollar of the company’s earnings. Low-PE can be due to near term headwinds or because of markets miscalculating the growth potential.

Of course, the valuation gap fills when fundamentals consistently deliver. With macroeconomic uncertainties, there are several attractive low-PE investment opportunities. In the second half of 2023, expansionary monetary policies could serve as a major catalyst.

Let’s talk about three deeply undervalued stocks that are poised to double in the next 12 months.

Albemarle Corporation (ALB)

Albemarle Corporation (NYSE:ALB) stock looks attractive among low-PE stocks to buy. ALB stock currently trades at a forward price-earnings ratio of 7.4 and offers an annual dividend of $1.6.

One reason for depressed valuation is the recent decline in lithium prices. However, the demand for lithium is likely to remain high through the decade. The correction provides an attractive entry opportunity.

Last year, Albemarle reported robust revenue growth of 120% on a year-on-year basis. This growth was on the back of capital investments, enhancing lithium conversion capacity.

Even for 2023, the company has guided for revenue growth in the range of 55% to 75%. A relative decline in lithium price is likely to play spoilsport. The stock, however, seems to have discounted this concern.

Over the long-term, Albemarle expects to boost lithium conversion capacity from 200ktpa in 2022 to 550ktpa (mid-range) by 2027. Revenue growth and cash flow upside will sustain in a lithium price recovery scenario.

Pfizer (PFE)

Pfizer (NYSE:PFE) stock has been in a downtrend and currently trades at a forward price-earnings ratio of 11.8. The stock offers an attractive dividend yield of 4.0%. I believe that the correction is overdone and PFE stock should have a sharp reversal.

A major reason to like Pfizer is the fact that the company is positioning itself for growth and product diversification. Currently, the company’s pipeline comprises 110 drug candidates.

This includes 39 candidates in the phase three and registration stage. As new drugs are launched, revenue growth is likely to remain steady.

Further, Pfizer has been aggressive on the acquisition front. To put things into perspective, Pfizer expects $25 billion in risk-adjusted revenue from business deals.

Recently, the company acquired Seagen (NASDAQ:SGEN) for a consideration of $43 billion. The acquisition will strengthen the company’s position in the oncology business.

Overall, PFE stock looks attractive, with the company investing heavily in research and development. The low-beta stock will continue to offer a healthy dividend yield, and growth is immune to economic shocks.

Rio Tinto (RIO)

Rio Tinto (NYSE:RIO) is another attractive stock that trades at a forward PE of 8.3. RIO stock also offers a healthy dividend yield of 7.3%.

One reason to be bullish on RIO stock is the possibility of a recession in 2023. Policymakers with act with expansionary monetary and fiscal policies. This will be bullish for industrial commodity and energy stocks. I therefore expect a meaningful rally in RIO stock in the second half of the year.

Further, Rio Tinto is also well positioned from a fundamental perspective. Last year, the company reported free cash flow of $9 billion. With a strong balance sheet, Rio Tinto expects to invest $26 billion through 2025. This will boost growth and the company’s cash flow potential.

It’s also worth noting that Rio has been diversifying towards commodities that will benefit from focus on green energy. As an example, the company is likely to be the largest source of lithium supply to Europe in the next 15 years.

On the date of publication, Faisal Humayun did not hold (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.