Even with a small exposure, speculative stocks can greatly impact the portfolio. With the markets anticipating rate cuts, higher trading and speculative activity is likely. It’s a good time to bet on speculative ideas for 100% returns in the next three to six months.
An important point to note is that not all speculative stocks will rally. Further, not all stocks with high short interest will have a massive short-squeeze rally. There are two ways to select speculative ideas that can surge. First, technical analysis works for investors with a firm grip on chart patterns.
Further, news-based investing works for investors who focus on fundamentals. The idea is to look for undervalued speculative stocks that have some positive business news on the horizon. This can be from the perspective of improving financial metrics, product launches, or a rally in a particular asset class.
I have used the news-based or fundamental screener in this column to talk about three speculative stocks that can surge by 100% before the end of the year.
Blink Charging (BLNK)
After an extended correction period, Blink Charging (NASDAQ:BLNK) stock has remained sideways for a year. With positive business developments, I am bullish on a big rally from current levels. Further, with the stock having a short interest of almost 20%, a short-squeeze rally seems likely.
On the fundamental front, there are two reasons to be bullish on Blink Charging. First, Blink Charging has been reporting healthy top-line growth, and I expect growth to be sustained and potentially accelerate in the coming years. For the current year, the EV charging company has guided for revenue of $170 million. This would imply a year-on-year growth of 21%.
Further, Blink Charging is moving toward EBITDA level profitability. The company has been guided to achieve positive adjusted EBITDA by December. With operating leverage and healthy growth in services revenue, margin expansion will continue in 2025.
Considering these factors, expect a big rally from oversold levels. I would not be surprised if BLNK stock doubles in the blink of an eye.
Bitfarms (BITF)
Bitfarms (NASDAQ:BITF) stock has remained subdued for year-to-date. However, the company has made important announcements, and I believe the stock is poised to surge higher. Further, the Bitcoin (BTC-USD) miner will likely go ballistic if Donald Trump is re-elected as the President of the United States. Trump has been in favor of policies that support the crypto industry and Bitcoin mining.
Specific to the company, there are two reasons to be bullish.
First, Bitfarms has strong fundamentals. As of Q1 2024, the company reported a zero-debt balance sheet. Additionally, the company reported a liquidity buffer of $124 million as of Q1 2024. Therefore, financial flexibility is high for aggressive capital investment.
Further, in June, Bitfarms announced the target of increasing hash rate capacity to 35EH/s by the end of 2025. As of Q1, the company’s hash rate capacity was 10.4EH/s. The expansion would translate into healthy revenue and EBITDA growth if Bitcoin remains in an uptrend. With these key positives, I am expecting stellar returns from BITF stock.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) has witnessed a sharp rally from June lows of $3. However, the stock has still delivered negative returns of 28% for year-to-date. Current levels are attractive for fresh exposure, and ACHR should double before the end of the year.
The most important point is that Archer is on track to commercialize its eVTOL in 2025. This is a key reason for the company to be bullish in the coming quarters. Further, the company plans to expand into the UAE, India and Korea in the next 24 months. Entry into more geographies seems likely and will position the flying car company for stellar growth.
It’s worth noting that Archer has some quality collaborations. United Airlines (NYSE:UAL) is the company’s strategic partner and investor. Southwest Airlines (NYSE:LUV) has partnered with Archer to operate eVTOL aircraft at California airports. These partnerships are likely to support expansion plans within the U.S.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
