Unquestionably, stocks can make many small investors wealthy in just a few years. I believe that the best way to achieve that goal is not by buying the stocks that the vast majority of “big money” investors on Wall Street love.
Sure, by purchasing very widely loved stocks like Apple (NASDAQ:AAPL), Meta (NASDAQ:FB), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT), you can get a 25%-50% per year return and even outperform the S&P 500. But those returns won’t make small investors rich in a few years.
The latter goal can be accomplished by correctly identifying a few struggling and/or vastly undervalued companies that are turning themselves around. Tremendously, undervalued start-ups that are well-positioned to become huge players in their sectors can also do the trick.
Among the stocks that have, within the last decade or so, generated returns of 15 times or more in a few years are AMD (NASDAQ:AMD), Nvidia (NASDAQ:NVDA), Plug Power (NASDAQ:PLUG), Tesla (NASDAQ:TSLA), and JinkoSolar (NYSE:JKS). I bought and touted JKS stock and PLUG stock in my columns fairly early in their rallies, but I missed the boat on the other three.
However, at any rate, for small investors looking to become wealthy in the next few years, seeking to identify the next huge gainers is definitely worthwhile.
At this point, I believe that these three stocks fit the profile of stocks that can make investors rich in a few years.
Stocks That Can Make You Rich: Embark (EMBK)
According to CNBC, the company’s current technology enables trucks to be driven autonomously. Of course, at a time of supply chain bottlenecks and massive truck driver shortages, that’s a very valuable product. Somewhat validating Embark’s technology. Knight-Swift Transportation Holding (NYSE:KNX), has invested $200 million in it, while, CNBC notes that, “Embark is partnered with AB InBev, brewer of Budweiser, Werner Enterprises, a trucker for big-box retail stores, Ryder and DHL, and others as all industries look to reduce supply chain spend.”
What’s more? Embark recently announced that it would start using autonomous trucks, in tandem with “backup drivers,” to carry freight in Texas in 2022.
Despite Embark’s huge opportunity, the market capitalization of EMBK stock is only just over $3 billion, creating a huge opportunity for long-term investors.
vTv Therapeutics (VTVT)
In April, vTv Therapeutics’ treatment for Type 1 diabetes, TTP399, received breakthrough designation from the FDA, indicating that the agency is very optimistic about the drug. The designation came after the company reported strong Phase 2 results for the treatment. The trials indicated that it can reduce the blood glucose levels of Type 1 diabetes patients and lower the number of severe episodes of hypoglycemia that they suffer. The treatment is a potential blockbuster, given that many Americans have the disease and the absence of any targeted, effective treatment for it.
Importantly, in October, vTv disclosed that TTP399 did not increase patients’ ketone more than those taking placebo. The FDA has refused to approve a treatment for Type 1 diabetes due to the agency’s fears that the drugs could raise patients’ ketone levels, leading to a potentially dangerous condition called diabetic ketoacidosis.
So with data indicating that vTv’s drug does not increase the risk of ketoacidosis, the treatment has cleared a very important hurdle. vTv is now preparing to start Phase 3 trials of the drug.
As it gears up for those trials, the company recently indefinitely postponed all development of its other major drug candidate, HPP737, a potential treatment for psoriasis. It also slashed its employee count by about two-thirds and hired “several consultants” who have expertise with helping companies obtain approvals for drugs. These moves indicate that the company is very upbeat on the outlook for its Type 1 diabetes drug and is focused on getting the treatment approved.
Meanwhile, in October, vTv announced that it had hired Deepa Prasad as its new CEO, replacing Stephen L. Holcombe, who resigned. Before taking over as vTv’s CEO, Prasad was a general partner in WestRiver Group, a venture capital firm which invested extensively in healthcare companies.
From 2008 to 2010, Prasad worked at boutique investment bank Montogomery Marshall Healthcare Partners which she co-founded. The firm was “focused on healthcare services, biotechnology and medical device sectors in mergers & acquisitions, private placements and partnership advisory,” according to Prasad’s LinkedIn profile. Finally, from 2004-2008, Prasad helped facilitate major investment deals in the healthcare sector for Montgomery & Co.
The board’s decision to hire Prasad, with her extensive experience facilitating deals in the healthcare sectors and her undoubtedly vast connections in the sector, suggest to me that vTv is very interested in establishing partnerships in the sector and/or eventually selling itself. Partnerships and/or an acquisition are likely to boost VTVT stock tremendously.
Stocks That Can Make You Rich: Schrodinger (SDGR)
As I wrote in an August column, “Schrodinger’s AI-based system, which also incorporates physics-based technology, according to the company, enables the drug creation process to be much shorter and cheaper. Using standard tools, the drug development process is currently extremely long and expensive.”
Schrodinger is partnering with multiple, large drug makers, including the likes of Sanofi (NASDAQ:SNY), Takeda (NYSE:TAK) and Bristol-Myers Squibb (NYSE:BMY), in an effort to develop therapeutics utilizing Schrodinger’s AI technology.
Schrodinger continues to make progress on its partnership with Bristol-Myers, which Schrodinger said earlier this year could generate revenue of up to $2.7 billion for it. Last month, Schrödinger “announced that the companies have prioritized an undisclosed precision oncology target that will replace HIF-2 alpha.” Additionally, the partners recently “expanded their collaboration with a new agreement to discover, develop and commercialize bifunctional degraders.” Bifunctional degraders are a relatively new type of drug that seeks to enhance human health by inducing cells to dispose of certain proteins.
Despite Schrodinger’s huge potential, the market capitalization of SDGR stock is only slightly above $2.5 billion.
On the date of publication, Larry Ramer held long positions in SDGR stock, VTVT stock, EMBK stock, JKS stock, and PLUG stock.
Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.