3 Stocks Under $3 That Can Trade in Double Digits by 2025

Stocks to buy

During the same time last year, Riot Platforms (NASDAQ:RIOT) stock was trading close to $3. As Bitcoin (BTC-USD) surged higher, RIOT stock has skyrocketed to $17.8. This is just one example of a stock going ballistic quickly. I believe that there are several under $3 stocks that look interesting from a business development perspective. If some catalysts play out, these stocks to buy under $3 will likely trade in double digits by the end of 2025.

Of course, these are high-risk penny stocks and exposure should be limited. However, if 3x returns are likely in the next 24 months, the impact on the portfolio can be meaningful even with a small exposure. Further, I am only focused on stocks average to good business fundamentals. There are dozens of penny stocks with poor fundamentals that will erode capital.

Let’s discuss these under $3 stocks to buy for multibagger returns.

Standard Lithium (SLI)

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Standard Lithium (NYSE:SLI) stock is possibly among the most undervalued lithium stocks to buy. At a current market valuation of $367 million, SLI stock seems poised for 3x to 5x returns by 2025.

To put things into perspective, the company’s prized lithium asset has an after-tax (base case) net present value of $4.5 billion. Further, the first commercial plant at Lanxess has an after-tax net present value of $772 million. The market valuation is minuscule compared to the asset valuation. This points to a big rally for SLI stock in the next 12 to 24 months.

One catalyst for the rally is a reversal in trend for lithium prices. Further, potential financing agreement for the key asset would be another stock upside catalyst. Given the impending lithium supply gap in the coming years, I am bullish on this asset, creating sustained value through robust free cash flows.

Cronos Group (CRON)

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Cronos Group (NASDAQ:CRON) is another deeply undervalued name among under $3 stocks poised for a breakout rally. The cannabis stock seems to have found a bottom and has remained sideways in the last six months.

Coming to the valuations, Cronos reported cash and equivalents of $840 million as of Q3 2023. The cash buffer is more than the company’s current market valuation. Cronos continues to focus on cash preservation and expects net change in cash to be positive in 2024.

The company is, therefore, re-positioned for aggressive expansion or some big acquisition. It’s very likely in the next 12 to 24 months and will be the major catalyst for CRON stock trending higher.

Besides being positioned for stellar growth, Cronos has been making inroads in the global markets. In September, the company commenced medical cannabis shipments to its German distribution partner, Cansativa GmbH. Further, in Q4 2023, Cronos expected to ship cannabis to Vitura Health Limited for sale in the Australian medical market. As Cronos spreads its wings, I expect growth acceleration.

IAMGOLD (IAG)

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IAMGOLD (NYSE:IAG) stock has remained largely sideways in the last 12 months and trades at $2.6. With a bullish outlook for gold, I believe this undervalued gold mining stock will likely surge higher.

The first point is that IAMGOLD has a robust liquidity buffer of $1 billion. This provides flexibility to invest in an attractive pipeline of gold mining projects, including assets in Côté, Gosselin, Nelligan and Chibougamadistrictsct.

Further, Côté Gold is the largest gold mine in Canada, with production expected in early 2024. This asset will accelerate production growth in the coming quarters. This comes at a time when gold is trending higher. IAMGOLD is, therefore, positioned for healthy revenue and cash flow upside.

I must add here that in December, the company announced an agreement to acquire Vanstar Resources for a consideration of $31.1 million. Potential acquisitions will continue to boost the company’s long-term growth outlook.

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.

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