Low-priced stocks invariably catch the attention of investors. It provides an opportunity for diversification even with a limited capital. I see several stocks under $20 that have the potential to double within the next six months. This column focuses on these growth stocks to buy for quick returns.
It’s worth noting that last year was challenging for investors with a correction in the index and a deeper correction in growth stocks. It seems clear that the market outlook has improved with the S&P 500 index trending higher by 17% for year-to-date.
Based on industry or company specific triggers, certain stocks have skyrocketed. As an example, Marathon Digital (NASDAQ:MARA) has surged by 400% for the year. Even if the markets remain sideways, there are some attractive opportunities to consider among growth stocks.
Let’s discuss three growth stocks under $20 that are poised to double in the second half of 2023.
Kinross Gold (KGC)
Kinross Gold (NYSE:KGC) stock has trended higher by 58% in the last 12 months. However, I believe that the stock is poised to double from current levels in the next two quarters.
One reason to be bullish on KGC stock is valuations. At a forward price-earnings ratio of 15.1, the stock looks attractive. Additionally, the stock has a robust dividend yield of 2.36%.
Further, I am bullish on Kinross with the company likely to deliver strong operational performance. For Q1 2023, Kinross reported operating cash flow of $259 million. Additionally, the company closed the quarter with a total liquidity buffer of $1.7 billion.
With high financial flexibility, Kinross can potentially pursue inorganic growth. I expect this to happen as Kinross was forced to sell Russian assets in 2022 due to geopolitical factors. An acquisition can compensate for the decline in production visibility.
It’s also worth mentioning here that Kinross rejected a takeover approach from Endeavour Mining (TSE:EDV) in June. A juicer deal in the coming months might be another catalyst for KGC stock surging higher.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) trades a few cents above $20 with multiple positive catalysts on the horizon. With the stock having traded sideways in the last 12 months, a big breakout on the upside seems impending.
First, Lithium Americas has approved the split of the company into two divisions. Lithium Americas will be operating North American assets while Lithium Argentina will focus on multiple assets in Argentina. I believe that the creation of two separate entities will translate into value unlocking.
It’s also worth noting that the company announced first lithium as a part of commissioning at Caucharí-Olaroz. Additionally, purification processing equipment will be added in the second half of 2023. The project being commissioned will ensure steady revenue upside in 2024. With these positive triggers and the commencement of construction at Thacker Pass project, the outlook for LAC stock is bullish.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) has witnessed a massive rally of 196% in the last 12 months. However, I believe that the stock remains attractively valued, particularly if Bitcoin (BTC-USD) trends higher in the next six months.
A strong balance sheet is the first reason to be bullish on Riot. As of Q1 2023, the company reported cash and digital assets of $390 million. Further, a zero-debt balance sheet implies high financial flexibility.
Another reason to be bullish on Riot is aggressive mining capacity expansion. As of Q1 2023, the company had a deployed capacity of 10.5EH/s. With the recent purchase of miners, Riot expects to boost capacity to 20.1EH/s by mid-2024. The company has the option to buy additional miners. If this option is exercised, mining capacity will further swell to 35.4EH/s by December 2024.
If this expansion is undertaken and Bitcoin trends higher, Riot is positioned for massive growth in revenue and cash flows, making it one of the top stocks under $20.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
