If you’re an investor who’s looking to amp up your returns over the long term, then you may want to consider small-cap companies that have more room to run. While growth stocks may be “riskier” than value stocks, I believe every portfolio should have a good mix of both. If you’re a younger investor, it’d be a smart move to lean on the growth side, and if you’re closer to retirement, you may want to lean towards value stocks with a small portion allocated for high-flying growth plays.
You don’t need to jump in to the venture exchange, where the rewards are high, and the risks are higher to obtain next-level gains. If you’ve got a long-term time horizon and the discipline to buy more on any signs of weakness, then you may want to consider these explosive growth stocks that could realistically double within the next two years or so.
The best part is, you don’t need to elevate your risk tolerance to that of a day trader. These businesses have rock-solid fundamentals, promising runways for growth, and major medium- to long-term tailwinds.
Aurora Cannabis Inc. (TSX:ACB)
Canada is on the verge of legalizing cannabis, and Aurora is on the verge of completing its 800,000-square-foot Aurora Sky production facility, which has the capacity to produce over 100 tonnes of dried cannabis per year!
It’s difficult to fathom just how large the facility is or how much weed it could produce in a given year, so here’s another metric to help you visualize just how massive Aurora Sky is: that’s ~313 million joints per year in a production facility that’s larger than 16 football fields!
Not only will the Aurora Sky facility be the largest of its kind, but it’ll be one of the most technologically advanced! That means lower input costs, higher plant yields, and higher long-term margins.
“There will be robotics involved, and we’ll be able to keep a closer watch and greater surveillance on our plants than any other agricultural facility in the world.” says Cam Battley, SVP at Aurora Cannabis.
The Aurora Sky project is expected to complete around the same time that cannabis is set to be legalized in mid-2018. If all goes according to plan with this facility, Aurora could double in just a year rather than two.
Fairfax India Holdings Corp. (TSX:FIH.U)
I think Fairfax India Holdings is one of the most underrated international growth plays on the TSX today. The emerging Indian market is red hot, and the Warren Buffett of Canada, Prem Watsa, is the man at the helm of this explosive holding company. It has the potential to generate superior returns over the long term.
Emerging markets have a stigma of being riskier than Canadian or American markets. Many of us realize that usually, a higher potential return comes with a higher amount of risk; however, I believe that in the case of Fairfax India, the potential returns are astronomical, while the risks are only slightly higher than your typical stock traded in the domestic market, especially if you’ve got well-respected Prem Watsa standing in your corner.
It really doesn’t get better when it comes to international investing for Canadians!
Bottom line
Whether you opt to go the route of emerging markets or emerging industries, ultimately, it’ll be you who’ll emerge with next-level returns in the long run.
Aurora is the riskier of the two because of the huge amount of uncertainties and political risks that come with emerging industries. If you’ve got an above-average risk tolerance, then it’d be a wise move to add both stocks to your growth portfolio today and on any dips that may happen in the future.
Stay smart. Stay hungry. Stay Foolish.
