If you want to make millions in 2020, the lottery is a popular choice. But as with all lotteries, the odds of you winning are extremely slim, not to mention completely out of your control.
High upside stocks, on the other hand, can mint you a fortune with much greater visibility. These stocks carry their own share of risk — otherwise they wouldn’t come with such mouth-watering upside — but they’re simply the best way to double, triple, or even quadruple your money in 12 months or less.
If you have some capital you’re willing to allocate to high-risk, high-reward investments in 2020, the following two stocks should be at the top of your list. Both have proven histories of providing massive returns to shareholders.
Bet on a reversal
Bombardier, Inc. (TSX: BBD.B) stock has doubled in price five times since 2003. Unfortunately, in each case, shares gave up all of the gains. Still, catching this stock on an uptrend is a sure-fire way to grow your money quickly.
What are the odds Bombardier stock doubles yet again in 2020? Judging by the fundamentals, fairly high.
As with any volatile stock, Bombardier shares respond heavily to expectations. In this case, expectations have varied wildly year-to-year, leading to massive discounts and premiums.
For example, last July, the company was hitting on all cylinders. Its jet segment was rebounding, other segments were repeatedly securing large contracts, and both sales and earnings were on the rise. That month, the stock surpassed $4.
As with many high-expectation stocks, Bombardier failed to live up to the hype. Over the next 12 months, shares slid by 50%.
Today, we have the opposite scenario. Nearly every analyst and investor is extremely bearish. This intense pessimism has pushed shares below the $2 mark, right about where Bombardier has historically staged a turnaround.
As Warren Buffett often says, buy when others are fearful. It’s hard to find an opinion that isn’t fearful about Bombardier stock these days, likely indicating that the pessimism has been more than priced in, laying the groundwork for a sharp reversal.
Go against the tide
Maxar Technologies Ltd. (TSX: MAXR)(NYSE: MAXR) is another volatile stock, but for completely different reasons. From 2008 to 2014, shares rose from $18 to nearly $100.
In mid-2018, however, the floor fell out when a short-seller report emerged claiming massive account irregularities. In just six months, shares fell by 90%.
However, Maxar still might have a bright future. The company designs and manufactures space-grade equipment, a market segment that’s seen tremendous growth in recent years.
From satellites and rovers to radar and telecommunications, Maxar remains a leader in the space despite its falling share price. In 2019, it secured more than a dozen contracts.
Wall Street is also throwing its weight behind the company. In September, JPMorgan Chase & Co. rated the stock “Overweight” with a price target 70% above the previous trading range. If Maxar stock returns to its former glory, there could be 300% in additional upside.
