One thing that’s common between life in general and a small facet of life — i.e., investing — is that very few things are actually in our control. Many of us try and control every aspect of our lives, but it’s usually a foolish endeavour. The pragmatic thing to do is to make informed decisions and hope for the best.
This is especially true when it comes to investing. You can use every metric and analysis methodology at your disposal to choose your holdings, but you can still never be 100% sure whether or not it pays off. The upshot is that you should get comfortable with “ifs” and “coulds.”
For your 2021 investments, there are three stocks that could triple your capital before the year is over if a few conditions are met.
A Bitcoin stock
After stumbling down for several weeks in a row, the famed cryptocurrency finally rose 20% in the last few days. While there is still some latency, the surge is also reflecting in Bitcoin stocks like HIVE Blockchain Technologies (TSXV:HIVE). And if the crypto is finally going for the six-digit valuation of US$100,000, as many hoped it does within 2021, HIVE could grow to 200% or more in response.
Stocks like HIVE offer a magnified exposure to Bitcoin rallies. Between June 2020 and 2021 peak, the crypto itself grew less than half as much as HIVE stock grew. And if the same phenomenon plays out again in 2021, you get to triple your money in a bit more than half a year’s time. The stock is not quite fairly valued, but it’s also not aggressively overvalued, so buying now might play out well from a valuation perspective as well.
An energy stock
The momentum of the energy sector hasn’t slowed down yet. Its impact is reflected in almost all stocks, big or small, but small-cap energy companies tend to offer more aggressive growth swings. Take Gear Energy (TSX:GXE) as an example. The company has grown about 185% since the beginning of the year, and its price-to-earnings multiple is still at 5.88 times.
And its current peak is still way 41% down from its 2018 peak. If the stock keeps riding the energy sector momentum till the end of the year, the chances are relatively high that it could double your money. This Alberta-based focuses on exploration and production. It’s recovering (financially) from the 2020 slump, and so the share price growth is more than just sector driven; it’s also organic.
A gaming company
The chances of Bragg Gaming Group (TSX:BRAG) tripling your money come with a lot of “ifs.” The stock did grow over 1,000% from the beginning of 2020 to the 2021 peak, but it has come down a long way since then (53%). The company is still moving forward with its expansion and recently bought a game studio that specializes in online gambling games for $30 million.
Bragg is an online B2B gaming solution provider. Even though its 2020 surge can be associated with lockdowns and a surge in online gaming, it can’t be ignored that online gaming is still a growing industry. And a few more acquisitions and a surge of contracts/new users to Bragg’s clients can push the company valuation high again.
Stocks that can triple your money in about six months can be a relatively smaller pool. But if your change your criteria a bit and start looking for companies that can offer this level of growth in one or two years, you can pick from a relatively larger asset pool.