There are ample evidences that suggest that the “buy and hold” strategy is possibly the best way to make millions from the market. While many investors can screen good ideas, there is lack of patience when it comes to holding stocks. The millionaire-making secret is to hold high-growth stocks that represent businesses with potential and review business developments on an annual basis. If business fundamentals are sound and there is scope to boost cash flows, valuation readjustments will follow.
This column discusses seven stocks that are likely to be massive value creators by 2030. I have selected a mix of blue-chip, growth, and penny stocks. The idea is to have a diversified long-term portfolio with potential five or ten-baggers.
Besides company specific fundamentals, I have looked at sectors that look promising not just until 2030, but potentially beyond. Let’s look at the reasons to be bullish on these stories.
High-Growth Stocks: Tesla (TSLA)
Tesla (NASDAQ:TSLA) has witnessed a challenging journey in the last decade and can be finally classified as a blue-chip. The Company has proved skeptics wrong and I believe that TSLA stock will continue to create immense value.
In September 2023, billionaire investor Ron Baron opined that Tesla’s valuation can “grow between four- and five-fold between now and 2030.” This is very likely in my view considering the company’s ambitious growth plans.
To put things into perspective, Tesla is targeting annual electric vehicle (EV) production of 20 million units by 2030. Anna-Marie Baisden of Fitch Solutions believes that the target is “going to be a challenge.” However, considering the impending penetration of EVs globally, it’s not unrealistic.
Further, Tesla has been delivering robust cash flows and the balance sheet is strong. I don’t see any financing concerns. With possible manufacturing in markets like India and Indonesia, there is visibility for robust deliveries growth. I must add that Tesla has been an innovator, which will continue to give the company an edge over peers.
Newmont Corporation (NEM)
I believe that gold is likely to surge higher as an asset class in the coming years. The reasons include inflation, low real interest rates, and geopolitical tensions. A good proxy for investment in gold is a gold mining company. Newmont Corporation (NYSE:NEM) is another blue-chip that can deliver fivefold returns by 2030.
Newmont is among the largest gold miners in the world with 2022 reserves of 96.1 million ounces. The recent acquisition of Newcrest Mining (OTCMKTS:NCMGF) will add to the reserve base and production visibility.
It’s worth noting that for Q3 2023, Newmont reported cash flow from continuing operations of $1 billion. As gold trends higher and production increases, operating and free cash flows will swell. This will translate into higher dividends and share purchase. With an investment grade balance sheet, Newmont will also be positioned for further inorganic growth. With NEM stock being depressed in the last 12 months, it’s a good opportunity to accumulate.
High-Growth Stocks: HDFC Bank (HDB)
The banking sector serves as a backbone for growth in any economy. This is the reason to be bullish on HDFC Bank (NYSE:HDB) as a potential value creator. The Indian banking stock has been sideways in the last 12 months. However, the merger with HDFC (home loan company) has been completed and the stock seems poised for a breakout rally.
From a long-term perspective, the best part of growth for India might be witnessed in the coming years. With focus on infrastructure, defense, housing, manufacturing, among others, the economy seems poised for a take-off. This is likely to benefit HDFC Bank.
If we look at the fundamentals of one of the largest Indian banks, there are reasons to be optimistic. As of Q2 2023, gross non-performing assets were low at 1.34%. Further, the capital adequacy ratio was 19.5% and is likely to improve in the coming quarters.
Given a strong network of 7,945 branches across India, I expect sustained growth on increasing banking penetration. Further, households are not significantly leveraged and this provides scope for growth from the merged entity.
Li Auto (LI)
Among EV growth stocks, Li Auto (NASDAQ:LI) is my top pick for multibagger returns. At a forward price-earnings ratio of 24, the high-growth name looks deeply undervalued. While the investment horizon is until 2030, I expect LI stock to deliver 100% returns this year.
For Q4 2023, Li Auto reported delivery of 131,805 cars, which was higher by 184.6% on a year-on-year (YOY) basis. Even for the full year, deliveries growth was stellar at 182.2%. I must add that vehicle margin and free cash flows have been robust. This has translated into high financial flexibility for aggressive growth. As of Q3 2023, Li Auto reported cash and equivalents of $12.13 billion.
For the current year, I expect deliveries growth to remain strong on the back of two factors. First, Li MEGA is due for mass deliveries in March. Further, Li Auto continues to aggressively expand its retail network in China. Additionally, there are speculations about the company’s first international foray with the likely market being the Middle-East.
High-Growth Stocks: DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) stock has surged by 183% in the last 12 months. The rally from deeply oversold levels is likely to sustain with profitability on the horizon. Further, with a big addressable market for online sports betting (OSB) and iGaming, I believe that DKNG stock will continue to create value.
To put things into perspective, the total addressable market for OSB and iGaming is expected to swell to $30 billion by 2028. This is just for the states where the company is currently operating. As more states legalize OSB and iGaming, the addressable market will swell.
It’s therefore not surprising that DraftKings is on a stellar growth trajectory. Further, for 2024, the company has provided a positive adjusted EBITDA guidance of $400 million (mid-range). It’s expected that EBITDA will swell to $1.4 billion and $2.1 billion respectively in 2026 and 2028. The guidance is for operations in existing states. It’s likely that the company will exceed this guidance with entry into new states.
Tilray Brands (TLRY)
Let’s also talk about a few penny stocks that can be massive wealth creators. Tilray Brands (NASDAQ:TLRY) is worth considering at current levels of $2.1. In my view, 10x returns are likely until 2030.
Recently, Tilray reported Q2 2024 numbers and revenue increased by 34% on a YOY basis to $194 million. Besides 31% YOY growth in cannabis revenue in Canada, Tilray reported 55% growth in international cannabis revenue. The growth driver outside Canada was medicinal cannabis. Further, the company’s alcohol net revenue increased by 117% to $47 million.
A key point is that Tilray is well diversified and with a big addressable market, the growth outlook is robust. Tilray has also reiterated the guidance for positive adjusted free cash flow for financial year 2024. With all these positives, the company seems to be on the right track for value creation. I would expect a strong rally from deeply oversold levels.
Standard Lithium (SLI)
Last on the list of high-growth stocks is Standard Lithium (NYSE:SLI), the second potential penny stock that I would buy and hold. While lithium prices have crashed last year, it’s expected that the supply-gap for the metal will be acute by 2035. I therefore expect lithium to trend higher in the coming years. With a game-changing asset, Standard Lithium can be a millionaire-maker.
To put things into perspective, Standard Lithium commands a market valuation of just $330 million. However, the company’s key asset has an after-tax base-case net present value of $4.5 billion. Further, another Lanxess asset has an after-tax net present value of $722 million. Clearly, SLI stock is massively undervalued.
Besides the lithium price correction, the need for financing the project has kept the stock depressed. Once there is a potential partnership or financing agreement, I expect SLI to trend higher. Of course, the company is likely to be a cash flow machine once the project is commercialized.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
