Outpacing the erosion of money via inflation is not enough for some investors. Among many candidates in this category, from dividend to growth and blue-chip stocks, they typically involve safe, slower growth.
But what about companies perceived as bad calls, from this safe perspective? Because their stocks are suppressed, they have a higher potential for more significant gains. Yet, they still offer some fundamentals that are difficult to dismiss.
Here are three stocks that are riskier but have the potential for higher rewards.
Boeing (NASDAQ: BA)
Whether it is new whistleblowers, close-call landings and mishaps, or a botched NASA launch, there is hardly a month without negative Boeing news. This continued feed suppressed BA stock, far from its all-time high of $430 in March 2019 to $191 per share.
Yet, this price is now above the 52-week low of $159, which was reached at the height of Boeing’s fear, uncertainty, and doubt (FUD). The reason for that is simple: There is no market substitution for this type of wide-moat company that could tackle the scale of military contracts, commercial flight, eVTOL, and space rocket deployment.
While Boeing whistleblowers point to the company’s de-prioritization of quality controls in favor of racial/gender accounting, the company’s corporate culture is one election, or one CEO, away from a turnaround potential. In the meantime, its entrenched status is not at risk of erosion, which is why such non-business luxuries were implemented in the first place.
BA stock is down 24% year-to-date. But given Boeing’s fundamentals, analyst consensus for the next 12 months points to an average BA price target of $215.43, with a ceiling of $270 vs. the bottom of $140 per share.
Tesla (NASDAQ: TSLA)
Like Boeing, Elon Musk’s wealth-building company is no stranger to FUD. Although Tesla is not a wide-moat company, it holds EV dominance in key US and EU markets. By avoiding the trap of unionization, Tesla continues to hold the edge over legacy automakers like Ford Motors.
Effectively ceding the pure EV market to Tesla, Ford Motors shifted to hybrids, with some success in Q1 sales growth. Tesla’s excursion into the SUV market, and subsequent recall of Cybertrucks, didn’t help the FUD amid the encroachment of Chinese automakers like BYD and Li Auto.
Nonetheless, Tesla’s core platform, Model 2, will not be deployed in 2025. So far, the company’s entire history has been geared toward popularizing EVs as luxury vehicles from the cumbersome days of specialty vehicles. The next-gen Model 2, priced at $25k alongside being the platform for robotaxies, is yet to become Tesla’s bread and butter.
It is fair to say that this interim 2-year period will either lay the groundwork for Tesla’s failure or success. But if it is the latter, the gains should be substantial from the presently muted TSLA stock.
Given Musk’s successful SpaceX venture from a technological perspective, investors are counting on that scenario. From the all-time high of $409 in November 2021, TSLA stock is priced at $177 per share, under the 52-week average of $220. Since the end of February, TSLA stock has been moving sideways, having lost 28% of value year-to-date.
Baselode Energy (OTC: BSENF)
Investors willing to take the uranium plunge would be betting on this Canadian company finding new uranium deposits in the Athabasca Basin, particularly the challenges of overcoming extracting issues in underground sandstone mining.
Above that issue, even Larry Fink, the CEO of BlackRock and key facilitator of ESG, admitted that “the world is going to be short power” because of generative AI demand. Nuclear power is by far the densest form of energy and the cleanest with modern building designs, offering zero air/carbon output.
While uranium is not renewable, just 1 kg of uranium is equivalent to the energy from 2.7 million kg of coal. Baselode has four main projects for uranium extraction—Catharsis, Bear, Hook, and Shadow—of which Catharsis is in the drilling stage. Depending on the exploration success of other projects and the extraction from discovered uranium trioxide ores in ACKIO, Baselode could end up powering entire nations.
Unlike other uranium stocks that have skyrocketed, the penny BSENF stock is down 33% year-to-date, owing to technical challenges and stock dilution in February to fund operations. As of the end of March, the company has nearly three years’ worth of runway based on the cash burn rate reported in May. But if Baselode hits uranium motherloads, shareholders could see triple-digit returns in the next few years.
What was your riskiest bet in your investing career? Let us know in the comments below.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
The post 3 High-Risk, High-Reward Stocks to Consider in June 2024 appeared first on Tokenist.
