Finding the right stocks to buy for 1,000% gains in current market conditions seems challenging. However, it is not impossible. In any economic scenario, there are stocks and sectors that tend to outperform.
During the covid-19 pandemic, stocks from the pharmaceutical, e-commerce and social media segments have delivered multiple returns. Likewise, in the last bull market for Bitcoin (BTC-USD), several crypto stocks have soared.
It’s also worth noting that making 1,000% gains in large-cap stocks is unlikely, especially if the investment horizon is three to five years. Investors should therefore use a bottom-up analysis to scan mid-cap and small-cap stocks.
I would prefer to remain conservative in terms of the time horizon on stocks to buy for 1,000% gains. However, the three stocks may deliver these returns faster than expected. Let’s discuss the triggers for these stocks that could cause a big rally.
| MARA | Marathon Digital | $10.92 |
| TLRY | Tilray | $3.19 |
| SOLO | Electrameccanica Vehicles | $1.36 |
Marathon Digital
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With the crash in cryptocurrencies, Marathon Digital (NASDAQ:MARA) stock hit lows of $5.2. Even as Bitcoin remains under pressure, MARA shares have more than doubled from lows.
With a three-year horizon and an assumption that Bitcoin is trending steadily higher, investors can make 1,000% gains in MARA shares. For investors bullish on Bitcoin, the stock is massively undervalued.
As of August 2022, Marathon reported a mining capacity of 3.2EH/s. The company expects to reach a capacity of 6.9EH/s over the next 90 days. In addition, Marathon expects to increase capacity to 23EH/s by mid-2023. The company also has a healthy balance sheet to pursue expansion after this period.
If this growth is achieved, the stock is poised for a major rally. I should mention that the next Bitcoin halving is happening in 2024. This is a huge catalyst for the digital asset. Once Bitcoin trends higher and margins expand, the stock is likely to go ballistic.
Tilray
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In November 2020, Tilray (NASDAQ:TLRY) traded around $6 levels. With the presidential elections and hopes for cannabis legalization, TLRY shares soared to $65 by February 2021.
Naturally, delay in the legalization process coupled with slower growth led to renewed stock correction. The stock looks undervalued at current levels. Assuming a scenario where cannabis is legalized in the US and Europe in the next few years, TLRY stock could deliver.
Tilray has already set a revenue goal of $4 billion by 2024. With organic growth and acquisitions, that seems achievable. Especially as regulatory winds abate.
I also like the fact that Tilray has built a strong presence in Europe in the medicinal cannabis segment. This is likely to yield results in the next few years.
Overall, Tilray is one of the best choices from the cannabis segment. The company continues to report positive adjusted EBITDA. Topline acceleration is a major impending catalyst likely following the legalization of cannabis at the federal level.
Electrameccanica Vehicles
Source: Marko Aliaksandr / Shutterstock
Electrameccanica Vehicles (NASDAQ:SOLO) stock has a higher risk compared to the first two stock picks to make 1,000% gains. However, I would consider some exposure to this interesting and undervalued electric vehicle stock.
As an overview, Electrameccanica is in the business of manufacturing and selling single-seater EVs. The company’s first model has already started commercial production. In the last three quarters, the company delivered 174 SOLO vehicles.
I am bullish on this small cap for two reasons. First, the company’s SOLO model has a base price of $18,500. A low-cost EV is a differentiator in the highly competitive industry.
Furthermore, the company is also targeting restaurant and grocery chains to market SOLO as a cargo van. If Electrameccanica can make inroads in this market, the potential is considerable.
Currently, the company has an asset-light model with manufacturing outsourced to Zongshen (China). Funding requirements are therefore not significant. If sales take off, Electrameccanica is likely to set up its own production unit.
The company’s long-term plan includes expansion outside the US. Considering the sector’s tailwinds, I am optimistic that the stock can deliver multiple returns.
As of 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 author, subject to the InvestorPlace.com Publishing Guidelines.
