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Brookfield Asset Management Inc. Chief Executive Officer Bruce Flatt speaks at their annual general meeting for shareholders in Toronto, May 5, 2010.MARK BLINCH/Reuters

Investors could double their money over the next five years by investing in Brookfield Asset Management and Home Capital Group , says Desjardins Capital Markets analyst Michael Goldberg.

He also believes investors underestimate Manulife Financial Corp. , and that the three companies, which he rates "buy," are most undervalued non-bank financial stocks.

"We believe that BAM deserves to trade above its net asset value, that MFC is trading at an unjustifiably deep discount and that HCG deserves to trade at a premium to Canadian banks," Mr. Goldberg writes in a research note.

Manulife, trading at "depressed levels," is being punished for its vulnerability to extremely low bond yields. Mr. Goldberg expects this correlation to weaken over time and the insurer to outperform the market. He has a one-year $21 price target on the stock.

As for Home Capital: "We believe that it will continue to have the investment-return profile of a growth company without the associated risk. We believe that Home deserves a valuation that is at a premium to the Canadian banks," he writes. He has a one-year $68 price target on the stock, which currently trades at 7.9 times 2012 estimated earnings, compared with Canadian banks trading at an average of 10.4 times earnings.

"We see both BAM and HCG as potential doubles over the next four to five years," Mr. Goldberg concludes.

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