3 Ways to Double Your Money in 2020 (Without Losing Your Shirt)

This trio of mid-cap stocks, including Aritzia (TSX:ATZ), could provide the risk/reward balance you need.

Upwards momentum

Image source: Getty Images

Hi, Fools. I’m back to call your attention to three attractive mid-cap stocks. As a reminder, I do this because mid-cap companies — those with a market cap of between $2 billion and $10 billion — have two key features:

In other words, if you want to double your money in 2020 while limiting your downside, mid-cap stocks offer a reasonable way to do it.

Let’s get to it.

Stylish selection

Leading off our list this week is Aritzia, which currently sports a market cap of $2 billion. Shares of the apparel retailer are up about 8% over the past year.

The stock has been a bit sluggish in 2019, but Aritzia seems to be carrying plenty of operating momentum into 2020. In the company’s most recent results, net income increased 18.6% as revenue improved 17%.

More importantly, same-store sales climbed an impressive 8.4%, suggesting that Aritzia’s competitive position continues to strengthen.

“We are confident our growing brand awareness and the strategic investments we are making to elevate our client experience will enable us to deliver consistent, profitable growth and enhance shareholder value in the years to come,” said Founder and CEO Brian Hill.

Aritzia shares trade at a forward P/E of 21.

Spin story

With a market cap of $4.2 billion, Spin Master is our next mid-cap marvel. Shares of the toy company are up slightly over the past year.

Concerns over slowing growth and intensifying competition have pressured the stock a bit in 2019, but Spin Master might now be too attractive to pass up. Despite a 12% revenue decline in the most recent quarter, the gross margin held firm, and free cash flow clocked in at a still solid US$129 million.

“While our performance in the third quarter was negatively affected by several challenges, we do not believe it is indicative of our expected full year 2019 performance nor our long-term growth and value creation prospects,” Chairman and Co-CEO Ronnen Harary reassured investors.

Spin Master shares trade at a forward P/E in the low-20s.

Making a U-turn

Rounding out our list this week is Cameco, which sports a market cap of $5 billion. Shares of the uranium producer are down 23% over the past year.

While the shares have been weighed down heavily by soft uranium prices, Cameco’s fundamentals have remained relatively strong. Despite a steep revenue drop in Q3, Cameco managed to strengthen its balance sheet and generate operating cash flow of $232 million.

Looking ahead, Cameco expects Q4 to be the largest delivery quarter this year.

“We are optimistic about the long-term fundamentals driven by the increasing recognition of the role nuclear must play in ensuring safe, reliable, and affordable low-carbon electricity generation,” said CEO Tim Getzel. “We recognize that today’s low price is creating tomorrow’s opportunity for us.”

Cameco trades at a forward P/E of 57.

The bottom line

There you have it, Fools: three attractive mid-cap stocks worth checking out.

As always, they aren’t formal recommendations. View them, instead, as a jumping off point for further research. Even the best mid-cap stocks can face serious trouble from time to time, so plenty of due diligence is still required.

Fool on.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of and recommends Spin Master.

More on Investing

Canadian flag
Investing

1 Magnificent Canadian Stock Down 4 Percent to Buy and Hold Forever

Here's one magnificent Canadian stock long-term investors may want to add, despite the company being near its all-time high.

Read more »

four people hold happy emoji masks
Investing

Why Canadian Investors Should Consider Investing in U.S. Stocks

U.S. lender Oaktree Specialty Lending (NASDAQ:OCSL) has an even higher yield than Toronto-Dominion Bank (TSX:TD).

Read more »

consider the options
Dividend Stocks

Is TD Bank the Best Dividend Stock for You?

Toronto-Dominion Bank (TSX:TD) has a high dividend yield but is embroiled in a serious money-laundering scandal.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

How to Use Your TFSA to Earn $6,000 Per Year in Passive Income

Hint: You'll need this Hamilton covered call ETF, which yields over 10%.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Friday, June 21

Overnight weakness in metals prices could pressure TSX mining stocks at the open today.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Investing

TFSA: 2 Canadian Stocks to Buy and Hold for Tax-Free Gains

Here are two TFSA stocks that have excellent capital gains potential as they are leaders in their respective industries.

Read more »

Growth from coins
Dividend Stocks

2 Dividend-Growth Stocks With TSX-Beating Potential That Deserve More Respect

Here are two of the best TSX dividend-growth stocks you can buy today and hold for the next decade.

Read more »

A stock price graph showing declines
Bank Stocks

TD Stock Has Fallen to a Low of $73: Is it Done Dropping?

TD (TSX:TD) is often viewed as a great long-term investment. But given its volatility in recent months, has TD stock…

Read more »