The good news for investors is that the market may be near a record high, but that doesn't mean there aren't strong potential returns out there.
For example, if Bell Potter is on the money with its recommendation, the ASX 300 stock in this article could be destined to deliver outsized returns for investors over the next 12 months.
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Which ASX 300 stock?
The stock that Bell Potter thinks is being undervalued by the market is Select Harvests Ltd (ASX: SHV). It is an integrated grower, processor and marketer of almonds via farming and processing assets in Australia.
While this may not be the most exciting industry to be in, the broker believes that exciting returns could be on the cards thanks to rising almond prices. It said:
In recent weeks as the Californian harvests has commenced almond prices have been rallying, as the 3.0bnlb USDA forecast may be considered optimistic.
USD almond prices have rallied ~26% from the bottom, with the Stratmarkets Almond index now at ~US$3.11/lb and at a higher level than that just prior to the Jul'25 Objective estimate. The move is on the back of mixed early harvest reports in California, calling into question the 3.0Bnlb USDA forecast. In AUD terms, almond prices have moved to ~A$10.35/kg, a 3-month high and up +19% YOY.
More good news is that costs remain in line with expectations at present. The broker adds:
Input costs: Major cost inputs in water and fertiliser are broadly unchanged from our previous update. Our baseline assumptions are for +6% YOY growth in costs per kg (on a 29kt equivalent basis).
Big returns
In light of the above, Bell Potter has retained its buy rating on the ASX 300 stock with an improved price target of $5.45. Based on its current share price of $3.85, this implies potential upside of approximately 42% between now and this time next year.
In addition, it is expecting a modest 1% dividend yield in FY 2025, followed by a 1.8% dividend yield in FY 2026.
Commenting on its buy recommendation, the broker said:
Buy rating is unchanged. Volatility in almond pricing has been a feature since May'25. However, the long-term under development of orchards in California implies a period of limited supply expansion potential, which we view as a positive for the direction of future almond pricing trends. Trading at ~7% discount to market NAV, ~5.9x FY26e "spot price" EBITDA and ~9.3x FY26e "spot price" PER (@29kt production), valuation is undemanding, particularly if pricing continues to firm.
