High rollers in the markets are known for taking chances on stocks to buy and winning big sometimes, and losing big other times. Bold investors are willing to take on more risk in order to gain substantial rewards if things go their way.
However, before delving into speculative stocks, it is important to have to ground rules in place. Avoiding big losses should be a higher priority than making a lot of money fast. Therefore, it is recommended that traders should invest only small amounts of capital in any risk investment.
Additionally, using stop-losses can help to reduce your risk even more. That involves having a set dollar or percentage amount for a maximum loss. So as long as you’re taking measures to exercise prudence, the following high-risk/high-reward stocks can add some excitement and maybe some robust returns to your investing account.
With all of that in mind, let’s take a closer look at these three somewhat speculative stocks to buy in order to determine whether they deserve a place on your watch list.
High-Risk/High-Reward Stocks to Buy: Las Vegas Sands (LVS)
Many gamblers are familiar with the hotels and casinos controlled by Las Vegas Sands. But are you ready to take a chance on a company and a stock that’s been under pressure for months?
The spread of the novel coronavirus has caused a number of stay-at-home orders and curfews to be implemented across the nation. And as a result, many people aren’t willing or able to venture out to a resort or casino. Besides, some people are out of work and don’t have much discretionary capital to spend right now. Therefore, LVS stock could fall further over the coming weeks.
On the other hand, Las Vegas Sands is the world’s biggest casino operator. It has a strong presence in Asia, which could help to drive revenues beyond the company’s American holdings. And the company claims to have enough liquidity to survive for a year and a half even if there are no revenues coming in.
So, LVS stock might just be a gamble worth taking now and could be one of the good stocks to buy.
Chipotle Mexican Grill (CMG)
You only need to look at the last few months of price action to see that CMG stock is both high-risk and potentially high-reward. Since mid-February, Chipotle Mexican Grill shares took a wild round trip from over $900, down to the $415 level and then back near $900 again.
So, this is a stock that can quickly gain or lose hundreds of dollars per share. Plus, the spread of the coronavirus adds another element of uncertainty into the mix. The public wants reassurance that they’ll be safe if they dine at restaurants.
In a conference call addressing the first quarter of 2020, Chipotle Chairman and CEO Brian R. Niccol provided some reassurance to investors. He said, “only about 100 restaurants are fully closed at this time. These are mainly inside malls and shopping centers as well as 17 locations in Europe, while the rest of our restaurants remain open for to-go and digital order ahead and delivery services, which is critical at a time where food options are limited.”
Therefore, since the company is taking steps to continue serving its customers, you might consider putting CMG stock on your menu.
Simon Property Group (SPG)
You might not be super-familiar with the name Simon Property Group. However, there’s a good chance that you’ve seen or shopped in one of the company’s many American malls or shopping centers.
Does it make sense to own SPG stock shares during a pandemic? It’s a risky proposition to take a stake in the “king of the malls,” no doubt. Unfortunately, though, Simon Property Group has laid off 30% of its staff. The company also eliminated CEO David Simon’s pay completely.
And so the risk is there, but the upside potential might be just as powerful. Simon Property Group is a massive company that survived the financial crisis of 2008-2009. Last year, the company took in $5.7 billion in rent payments.
You never know: If mall activity picks up again, SPG stock could end up being the best risk-reward proposition we’ve seen in a very long time.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David did not hold a position in any of the aforementioned securities.