Are you delaying investing because you don’t have money? What about the cash gift your grandmother gave you? Believe it or not, you can start investing in stocks for as little as $100. Some small and mid-cap stocks are available for $7/share. They present a significant growth opportunity if you’re willing to take a risk and hold the stock.
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Small and mid-cap stocks to buy with $100
$100 can buy you eight shares of BlackBerry (TSX: BB)(NYSE: BB) and eight shares of Hive Blockchain Technologies (TSXV:HIVE)(NASDAQ: HIVE).
BlackBerry
BlackBerry has a market cap of $3.95 billion and is trading below $7 per share. This stock has more than halved since November 2021 as it fell prey to the tech stock meltdown. Just when you thought its free fall had bottomed out, it fell another 18% in September as the automotive market took a hit.
What does a cybersecurity and internet of things (IoT) software and services company like BlackBerry have to do with automotive? BlackBerry’s QNX operating system (OS) powers more than 215 million vehicles and has around $560 million in royalty revenue backlog. Plus, the QNX OS has secured design wins for many upcoming vehicles. BlackBerry will get a royalty for every one of its vehicles on the road. But the chip supply shortage has constrained this revenue potential.
Moreover, inflation, a weak economy, and rising interest rates are easing consumer demand in Western countries. Canada’s auto sales fell 6.5% month-on-month in August as tight supply conditions reduced inventory levels.
However, the cybersecurity business accounts for 67% of BlackBerry’s revenue, which protects the stock from falling into small-cap. And the IoT business is the engine that drives revenue growth. Furthermore, BlackBerry’s design wins will allow the company to benefit from the electric vehicle (EV) revolution.
BlackBerry faces several challenges, but it has the stable cash flow from its cybersecurity business and $699 million in cash reserve to ride through a recession. It also has the automotive OS to tap growth and double or even triple your returns when automotive demand returns. Moreover, billionaire investor Prem Watsa is a major shareholder of BlackBerry, ensuring the company works towards shareholders’ interests.
Hive
Hive Blockchain is a crypto mining company that mines green Bitcoin and Ethereum in its graphics card-powered data centers. Cryptocurrency has a long way to go before becoming accepted as an alternative to fiat currency, but millennials and Gen-Zs are gradually embracing it. This will be a long process, and there will be crypto bubbles along the way as the technology improves and better addresses security risks.
Hive will benefit from these bubbles because it holds a large Bitcoin and Ethereum inventory. Unlike several altcoins, these are the two most widely accepted crypto coins on the market and are here to stay. Moreover, Hive is exploring new blockchain applications to diversify its revenue streams beyond the sales of crypto coins, and fees earned by validating transactions.
Hive stock has already dived 82% from its 2021 crypto peak and could fall another 50%. But don’t panic and be sure to keep holding the stock, as it can double in an economic recovery and grow 1,000% in a crypto boom.
How to convert $100 to $550 with these two growth stocks
A $55 investment in BlackBerry through the Tax-Free Savings Account (TFSA) can turn into $110 when the EV growth spurt begins. The stock could potentially reach $180 if the EV momentum continues without any nasty surprises. But the real speculative bet is Hive, as it can convert a $44 investment to $350 or $440 in the next crypto bubble.
This $100 investment should be less than 1% of your overall investment portfolio. Your core portfolio should comprise high-quality, large-cap stocks and ETFs, as their returns rely more on fundamentals than chance.
