Before investing in equities, there needs to be a clearly defined objective. Some investors prefer blue-chip dividend stocks for regular cash inflows, while others seek multibagger growth stories that can help in multiplying an initial investment. For investors eyeing significant growth potential, exposure to quality growth and penny stocks, including stocks under $10, is essential. This column discusses three stocks under $10 that can easily deliver 10-bagger returns by 2030. A bull-case scenario will potentially imply 20x or 30x returns from these high-risk stories.
An important point to note is that the stocks under $10 discussed have a high-beta. However, these stocks represent companies with good fundamentals. Further, the bullish outlook is supported by positive industry tailwinds that’s likely to sustain through the decade. Let’s discuss the reasons to be bullish on these potential multibagger stocks.
Cronos Group (CRON)
Cannabis stocks have been depressed for an extended period. However, I believe that a strong rally is impending. Positive news on the regulatory front could be just around the corner, which could bring healthy growth for quality cannabis companies.
Cronos (NASDAQ:CRON) is among the stocks under $10 that’s poised for 10-bagger returns by 2030 — and that’s a relatively conservative estimate.
It’s worth noting that as of Q3 2023, Cronos reported a cash buffer of $840 million. That’s almost equivalent to the current market valuation of the company. A strong cash buffer provides flexibility for aggressive organic and acquisition driven growth.
Additionally, Cronos is expanding its medicinal cannabis presence. In September 2023, the company shipped cannabis to Cansativa GmbH in Germany. Further, in January, it made its first shipment of cannabis flower to Vitura Health in Australia. Cronos has also guided for positive net change in cash during the year. This would imply further increase in financial flexibility for growth.
Archer Aviation (ACHR)
The flying car market is still at a nascent stage. Most companies in the industry are working towards commercialization within the next 24 months. Therefore, it’s a good time to buy and hold selected eVTOL stock until 2030. Considering the long-term market potential, there will be few multibagger names among flying car stocks.
Archer Aviation (NYSE:ACHR) is among the best names to consider. In the last six months, ACHR stock has been in a consolidation mode and a breakout on the upside is imminent.
In January, Archer completed phase one of its flight-testing program. The company is on track to begin piloted “for credit” testing with the Federal Aviation Authority in the second half of the year. Archer is therefore likely to launch commercial flights in the U.S. next year.
Further, the company has forged local partnerships in UAE and India for the launch of air taxi services in 2026. With eyes on global expansion, the growth outlook for Archer seems robust beyond 2026.
Standard Lithium (SLI)
Standard Lithium (NYSEMKT:SLI) is probably among the most undervalued penny stocks to buy. The company has high-quality lithium assets, but has plunged by 70% in the last 12 months. This does not come as a surprise considering the big correction in lithium.
However, for risk taking investors, the correction is a golden opportunity. Standard Lithium currently has a market valuation of $226 million. In comparison, two key assets of the company have a combined after-tax net present value of $5.2 billion (Lanxess and South West Arkansas asset). Purely based on asset valuation, SLI stock is positioned for more than 10x returns.
There are two factors that can trigger a massive reversal rally. First, lithium trending higher in the next few years. Further, Standard Lithium finding the right partners for financing the big lithium projects. Once these catalysts play-out, I expect the stock to go ballistic.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
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.