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For a large part of 2021, there was a big rally in growth stocks. Dozens of stocks delivered multi-fold returns during the year. However, the story is very different in 2022. With several economic headwinds, growth stocks valuations have plunged making it harder to find stocks to invest in.
With high inflation, geo-political tensions, and GDP growth concerns, it still makes sense to remain overweight on blue-chip stocks, high yield dividend income stocks, and value stocks. At the same time, investors should not ignore deeply undervalued growth stocks that can double in 2023.
Growth stocks as well as small cap stocks can be a potential catalyst for healthy portfolio returns. Having said that, it would be unrealistic for a shareholder to expect growth stocks to double in a few months as they can have high volatility. Investors need to consider exposure with a medium to long-term horizon as well as have a proper investment strategy diversified in other equities like mutual funds, large cap stocks, blue chips. indexes, ETFs., and dividend stocks that can earn dividend yields.
This article focuses on growth stocks that can double potentially from current levels by the end of 2023. While the stocks discussed are high-beta names, using fundamental analysis, the underlying business of these stocks are robust and have a good likelihood of being profitable growth companies in the future. The current stock correction, therefore, presents an attractive entry opportunity to get in on these undervalued stocks for a bargain.
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Top 4 Growth Stocks That Can Double In 2023
Growth Stocks That Can Double In One Year
1. Lucid Group
With the focus on green mobility globally, it’s important to have growth stocks from the electric vehicle segment. Lucid Group (Ticker: NASDAQ: LCID) stock is an attractive pick after a correction of almost 48% in the last six months as it has fallen out of favor from Wall Street.
Recently, Lucid Group introduced Lucid Air Sapphire, which is being touted as the world’s most powerful sedan. Production for the model is expected in the second half of 2023.
Furthermore, Lucid Air reservations are currently for 37,000 vehicles. This implies a revenue backlog of $3.5 billion. It’s also worth noting that the company has commenced construction of its factory in Saudi Arabia.
Amidst these positive business developments, LCID stock has been trending lower and has been quite volatile. One reason is a lowered guidance for vehicle deliveries in 2022. That’s primarily due to supply-chain concerns. Another reason is that Lucid has recently filed to sell up to $8.0 billion in securities. This would imply dilution for existing shareholders.
However, even with these factors, the stocks valuation is accumulating around the $10 to $15 zone. Once vehicle deliveries accelerate, the rally can be sharp with earnings growth. Lucid is also accepting online orders from multiple European countries which could cause increased sales growth. With aggressive global expansion plans, the outlook is bright and will likely outperform many other growth stocks.
Overall, Lucid is one of the more popular technology stocks as it has an innovation edge and is positioned to gain market share in the coming years. The stock seems oversold and can potentially double in the next 12-15 months. making it one of our top growth stocks to buy.
Marathon Digital (Ticker: NASDAQ: MARA) is another name among growth stocks for high-risk investors. The stock seems significantly undervalued at current levels of $11.9. Bitcoin has been struggling at around $20,000 levels, which is why there’s a big plunge in MARA stock.
However, assuming that Bitcoin trends higher in the next 12-18 months, Marathon stock has the potential to more than double. A key reason is the company’s growth trajectory in terms of adding mining capacity.
To put things into perspective, Marathon reported a hashing capacity of 3.5EH/s in January 2022. The company expects to expand capacity to 23.3EH/s by January 2023. Even if potential delays are considered, Marathon is positioned for significant expansion in Bitcoin mining. It’s worth noting that the company has already secured hosting capacity to support 23.3EH/s of Bitcoin mining.
From a financial perspective, Marathon reported cash and equivalents of $86.5 million. The company also has an expanded revolving credit facility of $200 million. The company was also holding 10,055 Bitcoin as of Q2 2022. Therefore, financing growth is unlikely to be a challenge.
On the flip side, EBITDA margin compression is likely in the coming quarters. The scenario will change once Bitcoin trends higher from current levels. The digital asset outlook is still bullish, with limited supply and gradual adoption growth.
E-commerce was an investment theme that gained significant traction during the pandemic. However, e-commerce growth stocks have corrected significantly. This is an excellent opportunity to accumulate some high-quality e-commerce stocks.
Coupang (Ticker: NYSE: CPNG) looks undervalued even after a rally from 52-week lows. Currently, CPNG stock trades at $16.9, and I believe the stock is poised to double in 2023.
One reason to be bullish is the improvement in EBITDA margin. Coupang stock was struggling, with the company reporting a significant negative cash flow However, the reversal seems impending.
For Q2 2022, the company reported lower-than-expected losses. The company has also raised full-year EBITDA guidance and expects positive adjusted EBITDA.
With further revenue growth and economies of scale, margin expansion is likely to sustain. Coupang indicated in March 2022 that the company expects a long-term EBITDA margin of 7% to 10%.
With a big addressable market in Korea, healthy top-line growth will likely sustain. At the same time, Coupang has international expansion plans. That’s another catalyst for top-line growth acceleration.
Another growth catalyst is diversification. The growth of the food delivery business, Coupang Eats, has been robust. The company has also been offering video streaming through Coupang Play. Considering these factors, any trader would find the CPNG stock attractive as it could be poised to double in 2023.
4. Kinross Gold
Gold mining stocks have also declined, with gold correcting on aggressive contractionary monetary policies. However, it’s worth noting that uncertain economic conditions and geo-political tensions are likely to support gold including the current interest rate hike and prolonged recession.
Kinross Gold (Ticker: NYSE: KGC) stock is among the attractive growth stocks in the gold mining sector. At a forward price-to-earnings ratio (p/e ratio) of 11.1, the stock is poised to double in the next 12 months.
One reason for Kinross stock trending lower is the sale of Russian assets and assets in Ghana. With these asset sales, the company has lowered the production guidance for 2022 and 2023.
However, the good news is that Kinross has a robust liquidity buffer of $2.1 billion. Further, even at current production levels, Kinross is positioned to generate positive free cash flows. Therefore, Kinross is positioned for organic and inorganic growth with a strong liquidity buffer.
Additionally, if gold trends higher from current levels, KGC stock will also surge. Current levels are desirable for a stock with a dividend yield of 3.66%.
Overall, it makes sense to include the Kinross stock in the portfolio. If production growth accelerates, returns from the stock can be meaningful. It could also play as a potential hedge in a market correction.
While the stocks listed above might not be the preference of a value investing guru like Warren Buffett, but these stocks could see faster growth relative to value stocks or a low-cost ETF index funds.
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