4 strong lottery tickets that could rise in 2020

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<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "[Editor’s note: This article is regularly updated to include the most relevant information available.]"data-reactid =" 11 ">[Editor’s note: This article is regularly updated to include the most relevant information available.]

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Investor Place CEO Brian Hunt recently presented the concept of "Lottery values" or high-risk, high-yield stocks that can double, triple, quadruple, or more in a hurry. The core concept behind buying these stocks – risking a bit of money to possibly make a lot of money and doing it so often that the odds are in your favor – immediately resonated with me. "Data reactid =" 12 ">Investor Place CEO Brian Hunt recently introduced the concept of "lottery stocks" or risky, rewarding stocks that can double, triple, quadruple or more in a hurry. The core concept behind buying these stocks – risking a little money to potentially make a lot of money, and doing it so often that the odds are in your favor – immediately resonated with me.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "So I created a portfolio of Five lottery values ​​in mid-November 2019, This portfolio included a high-growth manufacturer of hydrogen fuel cells (HFC) socket (NASDAQ:PLUG), beat up Chinese premium manufacturer of electric vehicles Nio (NYSE:NIO), department store dealer who stayed dead Stage stores (NYSE:SSI), depressive cannabis producer Aurora cannabis (NYSE:ACB) and disruptive online stylist platform Cast correction (NASDAQ:SFIX). "data-reactid =" 13 "> So I created a portfolio of five lottery titles in mid-November 2019. This portfolio included a manufacturer of high-growth hydrogen fuel cells (HFC) socket (NASDAQ:PLUG), beat up Chinese premium manufacturer of electric vehicles Nio (NYSE:NIO), department store dealer who stayed dead Stage stores (NYSE:SSI), depressive cannabis producer Aurora cannabis (NYSE:ACB) and disruptive online stylist platform Cast correction (NASDAQ:SFIX).

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "InvestorPlace – Financial News, Equity Advice & amp; trading Tips"data-reactid =" 14 "> InvestorPlace – stock market news, share advice and trading tips

<p class = "Canvas Atom Canvas Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In the five weeks since I built this lottery inventory Im Portfolio returns were enormous S & amp; P 500 rose by about 8%. However, if you had bought $ 1,000 for each of these lottery titles, you would have increased almost 80%, or about $ 4,000 … in a little over a month … with a $ 5,000 investment. If you had invested $ 50,000, you would have increased by almost $ 40,000. "Data-reactid =" 15 "> In the five weeks in which I built this lottery portfolio, the returns were enormous S&P 500 rose by about 8%. However, if you had bought $ 1,000 for each of these lottery titles, you would have increased almost 80%, or about $ 4,000 … in a little over a month … with a $ 5,000 investment. If you had invested $ 50,000, you would have increased by almost $ 40,000.

Given these numbers, it can be rightly said that this lottery portfolio worked. This is largely due to the enormous outperformance of NIO (plus 120%) and SSI (plus 280%).

Due to the tremendous success of this lottery portfolio from the end of 2019, I decided that it would be worth building another one for 2020. Then it's time to take a look at the high-risk, high-return, industry-leading providers of stock for the next 12 months.

Lottery values ​​to buy for 2020: Canopy Growth (CGC)

5 strong buying stocks under $ 5 with huge upside potential

Source: Shutterstock

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Current price:$ 20 "data-reactid =" 43 ">Current price: $ 20

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Potential price for 2020:$ 35 "data-reactid =" 44 ">Potential price for 2020: $ 35

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "At the top of this list of lottery stocks positioned for a big 2020 is Canada's largest cannabis producer, Canopy growth (NYSE:CGC). "data-reactid =" 45 "> At the top of this list of lottery holdings set up for a big year 2020 is Canada's largest cannabis producer. Canopy growth (NYSE:CGC).

<p class = "Canvas-Atom-Canvas-Text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "The qualitative part of the bull work on CGC shares The headwind that killed the CGC share in 2019 will evaporate and turn into tailwind in 2020. In particular, the demand headwind will turn into demand tailwind, as Canopy offers new products (vapes and edibles) and a sustainable one Retail presence boosts expansion and improved logistics: The headwind in deliveries will also affect the headwind in deliveries as Canopy has built enormous manufacturing capacity throughout 2019, and U.S. legislation, which failed in 2019, will make significant progress in 2020 thanks to a House of Representatives committee recently passed the MORE law, "data-reactid =" 46 "> The qualitative part of the bull market thesis on CGC shares for 2020 is easy to follow. The headwinds that killed CGC shares in 2019 will evaporate and in 2020 will turn into tailwinds Canopy is boosted by new products (vapes and edibles), a sustainable expansion of retail space and improved logistics, the headwind will impact demand as Canopy has built enormous production capacities throughout 2019 thanks to a committee of the House of Representatives, who recently passed the MORE law will make significant progress in 2020.

Because of all of this, the damage the CGC share suffered in 2019 – a 30% decrease – is nothing more than a perfect preparation for a big upswing in 2020.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "How big will this rebound be? Quite big. About this At the moment, Canopy is the clear market leader with the greatest firepower and the deepest pockets my numbersThis positioning will one day enable the company to grow into a billion dollar sales company with healthy profit margins. Realistically, earnings per share of $ 5 by 2030 is a viable goal. Based on a profit multiplier of 16 (the market average multiplier) and an annual discount rate of 10%, this corresponds to a 2020 price target for CGC shares of nearly $ 20%. "Data-reactid =" 48 "> How big will this recovery be? At this point in time, Canopy is the clear market leader with the greatest firepower and deepest pockets when it comes to becoming a massive legal cannabis market. According to my figures, one day this positioning will lead the company to become a multi- Developed billion dollar sales company with healthy profit margins Realistically, earnings per share of $ 5 by 2030 is a feasible target a multiple of 16 (the average multiple of the market) and an annual discount rate of 10%, which is a 2020 price target for CGC shares equal to almost $ 35.

The market does not see CGC shares in this light today. This is due to the headwind of 2019. However, since these headwinds will turn into tailwind in 2020, the market will begin with the CGC share in this way. The shares will rise towards USD 35.

Socket (PLUG)

5 strong buying stocks under $ 5 with huge upside potential

Source: Shutterstock

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Current price: $ 3 "data-reactid =" 77 ">Current price: $ 3

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Potential price for 2020:$ 5 "data-reactid =" 78 ">Potential price for 2020: $ 5

One lottery stock in my lottery stock portfolio from late 2019 that hasn't been released yet, but in my opinion can still be a big winner in 2020, is the HFC maker Plug Power.

Plug Power manufactures HFCs, the “batteries” for hydrogen vehicles. So far, it didn't mean much to be the backbone of the hydrogen car market. Compared to electric vehicles, hydrogen vehicles were unsafe, expensive, and impractical. However, hydrogen vehicles have clear advantages over electric vehicles in terms of range and charging time. Recently, certain industries – particularly the material flow industry – have recognized that they can use hydrogen vehicles while minimizing their disadvantages by: 1) buying in bulk and 2) restricting their movement to a warehouse (e.g. forklift trucks).

As a result, the material flow industry is beginning to buy HFCs in bulk, increasing Plug Power's revenue by a ton. Because this is such a large industry and HFC penetration is still relatively low, management expects this trend to continue for much longer. So much so that they set aggressive five-year goals of $ 1 billion in sales and $ 200 million in EBITDA.

I'm not sure if Plug Power can do that. This management team looks back on a promising and unsuccessful past. However, I think that continued robust HFC inclusion in the industrial truck industry will lead to robust sales and profit growth in the next few years and that earnings per share of 45 cents can be achieved by 2024.

Based on an exit multiple of 16 times the forward profit and an annual discount rate of 10%, this corresponds to a price target for PLUG shares of over USD 5 for 2020. In my opinion, the shares will develop over the next 12 months.

NOK

Bad news is piling up for Nio Stock as the EV maker has problems

Source: Various Photography / Shutterstock.com

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Current price:$ 3.80 "data-reactid =" 109 ">Current price: $ 3.80

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Potential price for 2020: $ 7- $ 8 "data-reactid =" 110 ">Potential price for 2020: $ 7- $ 8

The Chinese premium EV manufacturer Nio was one of my top lottery stocks at the end of 2019. The shares essentially tripled in the last three months of the year. Fortunately for bulls, I don't think this big rally is over. The NIO share is also one of my favorite lotteries in 2020.

Most NIO shares were killed in 2019 for three reasons. First, China's auto market slowed as China's entire economy slowed due to escalating global trade tensions. Second, NIO's delivery volume was negative in this slowing market. Third, net losses increased as the lack of sales growth led to strong cost growth.

At the end of 2019, the Nio share recovered because the price of these three headwinds had reversed. China's auto market is now picking up pace as global trade tensions ease. NIO's delivery volume increased sequentially by 35% in the third quarter – thanks to the launch of a new vehicle – and is expected to increase by a further 65% in the fourth quarter. The net loss in the third quarter decreased compared to the previous year.

All of these favorable developments will continue until 2020. China's car market will continue to recover. Nio's positioning in this market will continue to improve thanks to the continued launch of new vehicles, the introduction of new batteries and the refurbishment of an old vehicle. Cost-cutting initiatives will continue to bear fruit and converge on a renewed sales ramp to deliver significant margin expansion and healthy decline.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "All important financial and fundamental trends should be included The favor of the NIO in 2020. Provided they do, My math suggests that this stock could hit $ 7-8 next year. "data-reactid =" 115 "> All major financial and fundamental trends should develop in favor of NIO in 2020. If so, my math suggests that this stock could do this. Take the $ 7- $ 8- next year Levels out.

Stage Stores (SSI)

Source: LM Photos / Shutterstock.com

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Current price:$ 8.35 "data-reactid =" 135 ">Current price: $ 8.35

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Potential price for 2020:$ 10 "data-reactid =" 136 ">Potential price for 2020: $ 10

The department store operator Stage Stores has increased more than tenfold in the past few months. But I still think that the SSI inventory has more fuel in the tank to get even higher in 2020.

The story at stage stores is very simple. For most of the decade, Stage Stores was the typical antiquated department store operator who lost the retail game. On the way, Stage Stores acquired the cheap department store operator Gordmans. Nobody blinked when it happened. A few years later, the management of the stage stores noticed that Gordman's locations consistently and clearly exceeded their stage stores.

So on the verge of collapse, SSI management suggested something radical. You are now converting all full-price stage stores to Gordmans locations.

This transition started in 2019. It has worked wonderfully so far. The company has closed two consecutive quarters with comparable sales growth of 15%. The best part? This transition is just beginning. In 2019, the company converted fewer than 90 full-price stores to off-price stores. In 2020 it will convert more than 500.

For stage stores, this transformation to a successful, growing and profitable retail company with special prices was basically successful in the first steps. With the upswing of the transition in 2020, stocks will continue to grow. My price target of USD 10 is based on my assumption that the stabilization of sales and the improvement in the margin will drive earnings per share towards 70 cents by 2025. Based on an average 20x retail multiplier and discount rate of 10%, this corresponds to a 2020 target price of almost $ 10.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "At the time of writing, Luke Lango was long PLUG, NIO, SFIX and CGC."data-reactid =" 142 ">At the time of writing, Luke Lango was long PLUG, NIO, SFIX and CGC.

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