4 High-Risk, High-Reward Small-Cap Stocks to Play the Rotation
2024.07.24 09:42
- Some small-cap stocks can present high risk, but carry high return potential as well.
- They tend to be highly volatile and are only suitable for aggressive investors.
- Below, we will discuss four such stocks with tremendous upside potential.
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Small-cap stocks offer a tempting proposition for thrill-seeking investors: the potential for explosive returns. However, this upside comes with a hefty dose of risk.
This article dives into four small-cap stocks that analysts see as brimming with potential, but each carries inherent risks specific to their sectors.
These companies may be undervalued by the broader market, making them attractive to investors with an aggressive risk tolerance and a shorter-term investment horizon.
However, some of these stocks could also be suitable for long-term holds, depending on your investment goals. We’ll explore two intriguing options in the red-hot biotech sector, followed by two exciting picks from other industries.
1. Acumen Pharmaceuticals
Acumen Pharmaceuticals (NASDAQ:), a biopharmaceutical company, was incorporated in 1996 and is based in Charlottesville, Virginia. It is focused on developing treatments for neurodegenerative diseases, most notably Alzheimer’s, and has several clinical trials underway to treat various stages of disease progression.
The company has a significant market opportunity as the rate of disease development increases and the urgent need for effective treatments grows.
At the end of the first quarter, it had $296.6 million in cash. It will report its results on August 12.
It has five ratings, all of which are buy, and the market sees a potential target of $12.80 from current levels.
2. Eledon Pharmaceuticals
Eledon Pharmaceuticals (NASDAQ:), formerly known as Novus Therapeutics (NASDAQ:), changed its name in January 2021. It is based in Irvine, California. It is a biotech company seeking therapies that protect transplanted organs and prevent rejection.
Its star asset is Tegoprubart, an antibody that prevents the immune system from attacking transplanted organs and cells, increasing transplant success rates.
The company is investing heavily in research and development to expand its portfolio. It ended the quarter with $42.9 million in cash.
It reports its results for the quarter on August 8 and has 6 ratings, all of which are buy.
The potential assigned by the market would be at $14 from current levels.
3. Blink Charging
Blink Charging (NASDAQ:) focuses on providing charging solutions for electric vehicles. It was incorporated on October 3, 2006, as New Image Concepts and on November 20, 2009, changed its name to Car Charging.
In March 2023, it was one of three electric vehicle charger providers the U.S. Postal Service chose as part of its electric vehicle fleet upgrade. It is headquartered in Maryland, USA.
In the first quarter, revenues increased 73% to $37.6 million. Its recent agreements with Mitsubishi Motors (OTC:), Hertz (NYSE:) and USPS may continue to help boost revenues.
It reports results on Aug. 6, and revenue is expected to increase by 20.4% in 2024 and 29.2% in 2025.
It presents 9 ratings, of which 5 are buy, 4 are hold and none are sell. The potential target lies at $5.83 from current levels.
4. NIO
Nio (NYSE:) is a Chinese electric vehicle manufacturer, founded in 2014, is considered Tesla’s (NASDAQ:) competitor, and has seen its business growth expand in China and other parts of the world.
It recently reported deliveries of 21,209 vehicles in June, an increase of 98.1%, and 57,373 vehicles in the second quarter, an increase of 143.9% over the same period last year.
On September 24, it will present its quarterly results. By 2024, it expects to achieve a 19.9% increase in revenues.
It has 14 ratings, of which 4 are buy, 9 are hold and 1 is sell and the market gives it a potential at $7.00.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.
