7 Risky Stocks That Are Worth a Gamble

risky stocks - 7 Risky Stocks That Are Worth a Gamble

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Risky stocks aren’t always worth the stretch. But swinging for the fences is a tried and true strategy for investors with certain risk profiles, and if you’re staring down a handful of potential 10-baggers, it can make sense to allocate a percentage of your portfolio towards some of them.

Remember: the maximum you can lose in the stock market is only ever 100%; the upside, on the other hand, is truly unlimited.

With that in mind, here are seven of the top stocks worth a gamble today:

  • Wayfair (NYSE:W)
  • Carvana (NYSE:CVNA)
  • Moderna (NASDAQ:MRNA)
  • Shopify (NYSE:SHOP)
  • Co-Diagnostics (NASDAQ:CODX)
  • Alpha Pro Tech (NYSEAMERICAN:APT)

Let’s take a deeper look into what makes each of these risky stocks worth a bet.

Risky Stocks to Consider: Wayfair (W)

Risky Stocks to Consider: Wayfair (W)

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Online home furnishings platform Wayfair is one of the top e-commerce stocks to buy, having steadily built market share over the years. You can see the relevance of Wayfair amid the pandemic, as people take extra precautions to socially distance.

Between 2015 and 2019, revenue quadrupled, going from $2.25 billion to over $9 billion, and analysts expect revenue to advance another 35% in 2020.

Of course, the risks are clear: Wayfair has routinely lost money for years now, and analysts don’t expect the company to break into the black for years to come.

The upside, however, is also quite clear: If Wayfair can eat losses for long enough to establish itself as a meaningful competitor in leagues with Amazon (NASDAQ:AMZN), eBay (NASDAQ:EBAY) Etsy (NASDAQ:ETSY) and the like, investors who want to invest in the e-commerce space will need to own Wayfair, driving demand for W stock.

Overall grade: B

Carvana (CVNA)

Carvana (CVNA) stock

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Another e-commerce platform, Carvana was founded in 2012 and is headquartered in Tempe, Arizona. Like Wayfair, it focuses on a specific vertical where Amazon is weak: cars. You can buy and sell used cars via Carvana and actually get your car delivered to you — taking the contactless trend to a whole new level.

Although the Street isn’t expecting the company to post the prior rates of top-line growth seen over the past five years or so, the 26% uptick in revenue is nothing to scoff at, and 2021’s 42% expected acceleration is extremely hard to find in other names as well.

The compound annual growth rate of Carvana’s revenue has been nearly 150% over the past five years, as sales rocketed from $130 million to $3.94 billion.

Overall grade: B

Moderna (MRNA)

risky stocks Moderna (MRNA) stock

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Moderna, a Cambridge, Massachusetts-based biotech founded in 2010, will likely go down as one of the iconic stocks of 2020. Any list of the best risky stocks to buy would be incomplete without including Moderna, the $21 billion company that has seen its stock more than triple in 2020 through early June.

MRNA stock has one of the clearest potential catalysts on this list, with Moderna’s novel coronavirus vaccine candidate being one of the drugs that’s furthest along in development, and one that seems to have some of the best prospects for success.

Mrna-1273 is not only already in clinical trials, it’s in human clinical trials, and some of its early phase 1 data has already been released. Although it should be emphasized that the data drop included only eight of the 45 patients in that trial, the data for those eight was encouraging, and Moderna has already begun a 600-patient phase 2 trial, with a phase 3 coming as early as July.

Overall grade: A

Shopify (SHOP)

risky stocks Shopify (SHOP) stock

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Shopify has been an absolute growth dynamo for years now; it’s a cloud-based e-commerce platform solutions company that allows businesses of all sizes to set up digital retail operations. Headquartered in Ottawa, Canada, CEO Tobias Lütke is one of the savviest executives in business, and has guided the company that’s ballooned its revenue from roughly mere millions in 2015 to $1.58 billion in 2019.

Even in the chaotic age of 2020, analysts expect revenue to surge 37%. In fact, 2020 has been good for SHOP stock in the following way: it has accelerated the shift to e-commerce in ways few could have imagined when the year began. With small- and medium-size businesses needing to set up online shop as hastily as possible with physical retail in the gutter.

Overall grade: A

Co-Diagnostics (CODX)

risky stocks Co-Diagnostics (CODX) stock

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Another company whose products are leading the collective fight against the coronavirus is Co-Diagnostics, whose coronavirus test kits are becoming increasingly necessary to the re-opening of the economy that is driving the markets these days.

Testing will remain vital up until, and even after, a safe and efficacious vaccine is discovered — not everyone will have immediate access to the vaccine, and producing and distributing hundreds of millions of vials is no small task.

At the beginning of the year, CODX stock was essentially an unknown penny stock, but shares are up more than 1,600% in 2020 alone, and the company still has a rather measly market cap around $450 million.

You can imagine how volatile a stock like CODX might be, but the growth you’re seeing in its business is virtually unrivaled: analysts expect sales to jump from $215,000 in 2019 to $93.45 million this year.

Overall grade: A

Alpha Pro Tech (APT)

Alpha Pro Tech (APT)

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Another rather small company that has been on a rampage in 2020 — and certainly is one of the year’s top risky stocks to buy — is personal protective equipment (PPE) maker Alpha Pro Tech. Shares of the Markham, Canada-based company were also flying under the radar until the pandemic hit and demand for its life-saving N-95 protective masks soared to sky-high levels.

Although headquartered in Canada, Alpha Pro Tech has global operations and its main manufacturing facility is in Salt Lake City, Utah.

Unlike many of the other companies on this list, which have posted incredible revenue growth year after year yet remained unprofitable, APT is currently quite profitable; last quarter, as sales jumped more than 47%, earnings per share jumped 300%, and the stock trades at just 20 times earnings at today’s levels — even after shares essentially tripled year-to-date.

What makes APT a risky stock is uncertainty over how long this increased demand will last; when will the coronavirus pandemic ebb from the forefront of public health? Hopefully sooner than later, but sadly, if there’s another spike in U.S. cases, for instance, APT will be in a prime position to fill demand.

Overall grade: A

iBio (IBIO)

iBio (IBIO)

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Last but not least of the risky stocks to buy in 2020 is small-cap biotech iBio. IBIO is another company in the hunt for healthcare’s holy grail: a coronavirus vaccine. The $180 million business has already seen shares skyrocket almost 400% year to date, and the company has done a textbook job of betting on itself to succeed.

For example, while its vaccine candidate is in clinical trials, the company has been ramping up its manufacturing capacity, and has publicly estimated the production capacity of its Texas plant at about 500 million doses — enough to vaccinate every man, woman and child in the U.S., Mexico and Canada.

IBIO stock is a good example of a stock with large risk but unbelievable potential: if this underdog ends up winning the vaccine race, its 500%-plus gains in 2020 are just the beginning of a much more impressive run.

Overall grade: A

Article printed from InvestorPlace Media, https://investorplace.com/2020/06/7-risky-stocks-that-are-worth-a-gamble/.

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