Information is abundant regarding investing strategies that investors have access to — from mutual funds to penny stocks and everything in between — all with varying risk profiles.
For investors, one of the most critical aspects of an investment journey that every investor should ask themselves is, “What is my risk tolerance?” That can steer them down the correct path. If they are very risk-averse, an employer-sponsored retirement plan may be the way to go. However, investing in small-cap companies may be the best option if an investor is interested in gaining the most significant return with a high-risk tolerance. Regarding investing, there is no one-size-fits-all answer.
Here are a few companies that have experienced very impressive returns recently and would be considered higher-risk investment options due to their large price fluctuations, both to the upside and the downside.
Skywest (SKYW)
Skywest (NASDAQ:SKYW) is a regional airline that offers passenger and cargo services, as well as on-demand charters and aircraft leasing.
Over this past year, its share price has risen by 172%, primarily due to an increase in demand for its services and steady revenue growth, in which its most recent earnings report beat analyst predictions for both revenue and earnings per share.
On Apr. 25, Skywest announced earnings for the first quarter of 2024, stating that total revenue increased by 16% year-over-year. It reported a net loss of $22 million in Q1 2023, which improved to a net income of $60 million in Q1 2024.
In the first quarter, Skywest also announced that it had delivered three of the 20 E175 aircraft to United Airlines, as outlined in their agreement regarding fleet deliveries. Skywest bought back approximately $8.7 million in total stock for Q1 2024, roughly 136,000 shares.
Compared to many other airline stocks, Skywest is leaps and bounds ahead of its competition, such as Frontier Airlines (NASDAQ:ULCC) and JetBlue Airways (NASDAQ:JBLU), which are down 35% and 16%, respectively.
Skywest offers an abundance of positive aspects for investors, especially compared to the airline industry. Buying into this stock now when it’s reached an all-time high could be risky since it has nearly tripled in value in just this last year. However, with it still offering a fair valuation and trending in the right direction, many investors are willing to take the risk for incredible profits.
GigaCloud Technology (GCT)
GigaCloud Technology (NASDAQ:GCT) operates as an e-commerce business that ships large merchandise such as applications, furniture and fitness equipment.
Its share price has grown sixfold within the last year, but during this time, it has also experienced major fluctuations of up to 40% to the downside.
On Mar. 27, it reported earnings for the fourth quarter of the full year 2023, in which it stated that total revenue improved by 95% and net income rose nearly fourfold year over year.
GCT’s active buyers and the average amount each buyer spent also increased drastically on an annual basis, from 21% in the full year 2022 to 27% in the full year 2023, respectively.
On Apr. 4, GCT also announced an innovative service called Branding-as-a-service. This service will allow GCT sellers to market their products under the brand Christopher Knight Home, greatly increasing sellers’ product recognition on the platform.
GigaCloud Technology has experienced rapid growth, but it hasn’t been without bumps in the road over the last year. For investors seeking a stock that can, at times, be a high-risk investment but offers very impressive returns, GCT is a solid pick.
VirTra (VTSI)
VirTra (NASDAQ:VTSI) offers a training service for the military and law enforcement. It provides wraparound screens of varying degrees of coverage that simulate real-world training scenarios.
On April 1, VTSI reported earnings for the fourth quarter of the full year 2023, in which it stated that total revenue increased by 34% and net income rose by over fourfold. This also beat analysts’ expectations, sending the stock price surging by nearly 40% directly following the earnings release.
VTSI stated that it is focused on improving its facility management and upgrading its machine shop, which will help to improve the overall efficiency of the business.
Over this past year, VirTra has seen its share price rise by 182%, resulting from strong earnings results and improved product development.
It’s a stock that has performed remarkably well, offering investors a great option for a small-cap company that may be a risky investment but has strong potential upside.
As of this writing, Noah Bolton 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.
