You’ve got to ask yourself some questions when an editorial guideline asks you to write about risky stocks to buy – as if we don’t already have an extremely treacherous situation in the market! Nevertheless, I’m game. Basically, my critics are correct. I’m the Kevin Hart of content creation – I just can’t say no.
Seriously though, before we dive into this discussion of risky stocks to buy, I want you to know upfront that I’m not click-baiting you in any way, shape or form. These ideas have tremendous upside potential, particularly because they’re mostly tied to relevant market segments. However, the possibility of downside is very much real.
Further, I think it’s worthwhile before considering any large investment outlay to look at the facts. First up is margin data from FINRA. Recently, I’ve been pounding this data into my readers’ heads but it’s worth repeating. Over the last few months, equity trading on margin has jumped to record highs. In that sense, you don’t need to pick individual risky stocks to buy – they all are.
Of course, some publicly traded companies are much more dangerous than others. What’s particularly worrying to me is the “Dumb Money Confidence” index, a benchmark from Sentimentrader.com that shows what the masses are doing. Apparently, everyone is jumping aboard the equities sector, which gives me pause when deciphering which risky stocks are worth your hard-earned money.
Then again, you don’t want to fight the tape. Furthermore, the federal government has every incentive to pump liquidity into the economy, doing everything it can to inject confidence – or at least the perception of confidence. Therefore, if you can stomach the volatility, here are risky stocks to buy.
- EnLink Midstream (NYSE:ENLC)
- Smith & Wesson Brands (NASDAQ:SWBI)
- Blonder Tongue Labs (NYSEAMERICAN:BDR)
- Patriot One Technologies (OTCMKTS:PTOTF)
- Cyberdyne (OTCMKTS:CYBQY)
- Mind Medicine (OTCMKTS:MMEDF)
- Bit Digital (NASDAQ:BTBT)
- Lithium Chile (OTCMKTS:LTMCF)
Finally, one last point: I’m giving you my best opinion about the subject matter. Please don’t treat this like it’s journalism because it’s not. Instead, these risky stocks are merely ideas that might do well but could also do very poorly so caveat emptor.
EnLink Midstream (ENLC)
Risky stocks levered to the oil and gas industry can’t seem to get much love these days. As you know, the sector suffered massive devastation when the novel coronavirus made its rude entry into our everyday lives, killing demand. That sent EnLink Midstream and its competitors into the doldrums.
However, ENLC stock was gradually making its way upward and for good reason. For one thing, new daily coronavirus infections dramatically declined from their early January peak. Second, the Covid-19 vaccine rollout has produced encouraging results. Therefore, many contrarians reasoned now was a good time to bank on a recovery.
Then, the winter storm in Texas broke out, which put a damper on sentiment. Still, I believe the narrative overall for ENLC stock is positive as the natural disaster proved one thing – when it comes to energy, diversity is key. Therefore, expect fossil fuels to have a much longer lease on life than initially given credit for.
Smith & Wesson Brands (SWBI)
While some of these risky stocks may have more risk than reward baked in, I have a good feeling about Smith & Wesson Brands. Admittedly, though, it’s a feeling driven by cynicism. Last year, firearms and ammunition sales soared as fears of social instability rippled across various communities. In particular, the Asian American community suffered from the very sad but predictable scapegoating effect.
Not surprisingly, SWBI stock was a huge winner in 2020. So far this year, shares have performed in much more pedestrian manner, up only 1.4%. However, the year is young, and I firmly believe we’ll see a ramp up in gun sales again.
As NBC News reported, a rash of violent hate crimes against Asian Americans has exploded – and curiously in liberal, cosmopolitan cities. This sends a chilling message that the scapegoating effect is far greater than political allegiances. Concerned citizens of all vulnerable communities must simply protect themselves. Firearms provide that platform, which benefits SWBI stock.
Blonder Tongue Labs (BDR)
I probably shouldn’t admit this but I never heard of Blonder Tongue Labs until I was researching which risky stocks to include on this list. My only excuse is that this company was founded in 1950, which is well before my time. Nevertheless, I’m sure I’ve benefitted from the underlying business, which historically focused on communications equipment for broadcasting.
Over the years, Blonder Tongue has diversified its offerings to include solutions for various sectors, such as airports, sports and entertainment venues, and hospitality and commercial facilities. But you can see why I put BDR stock in the “danger” zone. Because of the pandemic, not only did the traditional broadcasting business suffer, so too did these alternate revenue channels.
At time of writing, BDR stock can be had for less than $2. While it’s difficult to know for sure where shares are headed, the gradual return to normal may bolster all of Blonder Tongue’s previously embattled revenue sources, which makes BDR an intriguing contrarian opportunity.
Patriot One Technologies (PTOTF)
Generally, I don’t like to deal with risky stocks that are priced below a buck. Sure, you have the law of small numbers that could work in your favor. However, that same law can devastate your portfolio if you happen get the wrong entry point. Nevertheless, Patriot One Technologies has a powerful business narrative that should be relevant for many years ahead.
Specializing in covert multi-sensor security platforms, PTOTF stock has a cynical benefit to the rise of violence that we’re seeing in at-risk communities. Increasingly, video footage has played a pivotal role in bringing these hate-filled criminals to justice. But Patriot One goes a step further, with intelligent sensors that can detect weapons, anomalous behavioral patterns and even elevated body temperatures.
Just think about how that could be relevant as we attempt to open our transportation networks!
Further, if the present recession continues for longer than anticipated, crimes of desperation will almost surely rise. And with law enforcement budgets strained, we desperately need intelligent solutions, fostering a catalyst for PTOTF stock.
These days, everybody’s talking about short squeezes and meme trades. But Cyberdyne belongs in a class of risky stocks that appeal to sci-fi nerds. I’m sure a lot of these folks may not know that you can legitimately own shares of Cyberdyne. Better yet, the business is somewhat similar to the fictional corporation featured in the Terminator series.
Known for its flagship product HAL (Hybrid Assistive Limb], Cyberdyne clunkily calls it the world’s first cyborg-type robot. A more accurate description is that HAL is an augmented robotics-based exoskeleton. Okay, maybe that didn’t help. The nuts and bolts of the underlying business of CYBQY stock is that HAL helps bring mobility and independence to people who are physically compromised.
What I really love about the Cyberdyne opportunity is that very few people outside of its native Japan pay attention to it. That could change, especially with the U.S. baby boomer population aging, presenting a significant revenue base for CYBQY stock.
Mind Medicine (MMEDF)
According to a post from the University of Minnesota, Covid-19 “has tripled the rate of depression in US adults in all demographic groups—especially in those with financial worries—and the rise is much higher than after previous major traumatic events.”
It’s not surprising. Yes, the pandemic offered some “benefits” in that millions of worker bees didn’t have to go to the office. Let’s be honest – a lot of folks received one year of free vacation. But for millions of others, the lockdowns and the resultant loss of income have been incredibly trying. Though it seems counterintuitive at first, Mind Medicine may help.
Yes, the company specializes in psychedelic medicine. However, before you write off MMEDF stock as quackery, Johns Hopkins Medicine notes that psychedelic treatments have been shown to relieve major depression.
Another benefit to MMEDF stock is that the underlying sector is a controlled one. Therefore, you’re not going to have the kind of competition that you’re seeing in the cannabis market. While not the most comfortable play among risky stocks to buy, it is surprisingly relevant.
Bit Digital (BTBT)
While Bitcoin (CCC:BTC-USD) turned the financial world on its heels, attracting institutional heavyweights to join in on the cryptocurrency revolution, not everyone is convinced. Among those who are curious about BTC, quite a few don’t like the myriad ways you can lose access to your money, ranging from cyberbreaches to simply forgetting your password.
Therefore, risky stocks to buy levered to bitcoin mining may help those sitting on the fence to make a firm decision. Though I’ve been a strong advocate of ownership of the actual cryptocurrencies – by the way, I’m using ownership as a colloquial phrase so please spare me the technicalities of that term – I must admit that companies like Bit Digital are appealing.
If you believe in the power and expanding relevance of cryptocurrencies, you may want to give BTBT stock a serious look.
Featuring a warehouse of dedicated mining rigs, Bit Digital essentially mints new Bitcoins into existence. With prices soaring – last I checked, it was just under $56,000 – BTBT stock could look very enticing, especially if Bitcoin goes to six digits.
Lithium Chile (LTMCF)
Thanks to the proliferation of electric vehicles, many if not most lithium mining firms have skyrocketed over the past few months. And it’s possible that they could rise even more as competition within the EV market heats up. However, if you’re looking for risky stocks to buy in this sector with an attractive entry point, look no further than Lithium Chile and LTMCF stock.
According to the company’s website, Lithium Chile operates 14 premiere projects in the world’s highest-grade lithium district. What makes shares appealing is that the general consensus indicates that EVs are the future. But not all brands will succeed. Here, you’re selling tickets to a game that everyone wants to see, not wagering on a specific team.
To be fair, LTMCF stock has already enjoyed robust performance, up nearly 236% year-to-date. Therefore, it wouldn’t be accurate to say that you’re getting in on the ground floor. However, as a 60-cent equity unit, it still has the law of small numbers working for it (or against it).
On the date of publication, Josh Enomoto held a long position in ENLC, MMEDF and BTC.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.