We’ve all dreamed of turning a small investment into a big payday. While these wins require patience and nerves of steel, buying the right stocks under $20 per share can set you up for life-changing wealth over the coming years.
While the headlines continue to focus on big tech stocks, there are diamonds in the rough that most folks overlook. With the market at record highs, I’ve shifted my attention to higher-risk, higher-reward stocks. That is, small cap companies with solid fundamentals that have been neglected – meaning their valuations remain attractive relative to their growth potential. Of course, the chance these under-$20 stocks truly turn $100 into $10,000 in a short timeframe is not at all likely. But it is worth a shot if you have the guts.
Data Storage Corp (DTST)
Data Storage Corp (NASDAQ:DTST) provides business continuity services, including disaster recovery, infrastructure as a service, and cybersecurity services. The company’s solutions cover a wide gamut, including data protection, data center security, voice and data services, and email archives. I am very bullish on certain data and cloud computing companies that remain under the radar and have a massive growth runway from which to take off. Data Storage Corp definitely looks like one of those, and my conviction has only been getting stronger over the last few weeks.
We are also seeing more advancement in the AI sector apart from just text-based LLM models. OpenAI’s Sora text-to-video model is spurring a lot of hype, and cloud computing models can benefit a lot from this trend. This company is trading at just 1.2-times sales. However, the company generated 2 cents in earnings per share and $6 million in revenue, up 35% year-over-year in Q3 2023. The sales growth here is much better than that of some other growth companies that are trading at 10-times forward sales or higher right now. Not only is the growth better with a small cap like this, but the addressable market for Data Storage is massive compared to the company’s small size.
If the stars align, I believe DTST stock can deliver multi-bagger gains from here. Its CloudFirst segment achieved triple-digit year-over-year growth, though this segment was merged with Flagship Solutions Group last month for more efficiency. I believe DTST stock is a very good long-term hold in the small cap space.
Cipher Mining (CIFR)
Cipher Mining (NASDAQ:CIFR) is an under-the-radar cryptocurrency mining company. I have been bullish on crypto mining stocks for well over a year since the previous crypto market crash. If you have been reading my articles, I have reiterated that 2024 will be the year where the crypto market sees a major breakout due to the approval of spot ETFs, the upcoming Bitcoin (BTC-USD) halving, and interest rate cuts all catalyzing in the same year. Even with just the ETF approvals, Bitcoin has already soared above $63,000 this week.
Many mining stocks like Cipher are still sitting at crypto winter lows, and are just waiting to explode higher along with Bitcoin prices. That’s because investors fear higher mining costs along with the halving and the fact that Wall Street is waiting for these companies’ financial reports to reflect these price increases. I believe that gives investors a prime opportunity to load up on these mining stocks, since mining companies have prepared for a long time and are ready to bear the halving while making use of their stockpiled Bitcoin (which will be worth much more).
Notably, Cipher mined 371 Bitcoin in January with 70,000 mining rigs. The company now holds over 1,132 Bitcoin, worth more than $71 million. I expect CIFR stock to be a top performer as the next crypto bull market kicks into high gear over the coming years.
Terran Orbital (LLAP)
Terran Orbital (NYSE:LLAP) is a satellite launch company that has been trading sideways for a long time. I have been bullish here for the past few months because of the company’s recent Rivada deal. That deal is expected to significantly ramp up the company’s sales in the coming years. Rivada has already made the payment for its satellites, and Terran Orbital continues to report strong exponential sales growth.
The big problem is profitability, but that has is also a concern that has been largely addressed considerably over the years. The company reported more than three times more losses than sales in 2021 and two times more losses than sales in 2022. However, its Q3 2023 net loss was shaved down to $26 million against $44 million in sales. I believe that the stock can be re-rated significantly higher if the current trajectory continues.
We are looking at $1 billion in sales in 2025. However, analysts do not expect profits until 2027 at the latest. If Terran can demonstrate a path to profitability sooner, its valuation could expand rapidly. With continued execution and partnerships, I see a significant upside even from today’s prices at $1 per share. This is a long-term play that could generate 10X returns or more.
On the date of publication, Omor Ibne Ehsan 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.
