High-risk stocks are usually discouraged forms of investment; their extreme volatility makes it hard for any investor to be at ease. High-risk stocks are very erratic and lack any sense of the predictability that's necessary when one wants to invest hard-earned money.
That being said, if you're one of those experienced investors with high-risk tolerance, then there are ways that high-risk stocks can be profitable for you. Volatility goes both ways, rising and falling in a blink of an eye, and one can profit from it when one invests at the right time. There's also the chance to earn from the long-run potential for growth that high-risk stocks offer.
Though it would still be best to play it safe, many investors live for the gamble and try their luck anyway, sometimes to great results. If you are this kind of investor, then the one thing you'll need to increase your odds of success in research -- and lots of it. Luckily, we have taken the liberty of narrowing some of the high-risk stocks that seem to be worth taking the chance on:
1. Sabre Corp. (SABR)
Market Value: $3.40 Billion
Based in Southlake, Takes, Sabre is a travel technology company that holds the distinction of being the largest global distribution systems provider for air bookings in North America. The company mainly operates a platform that connects airlines to travel agencies and provides software solutions for the global travel industry.
Though the company went through much turbulence last year, indicated by large fluctuation in stock prices, projections indicate rebounds on the horizon for the company, especially and traveling slowly returns and flights become more frequent. Stock prices have gained by almost 50% overall in the past 12 months. Even with this, investors believe that the stock is grossly undervalued.
With over 60 years of history, the amount of time the company has been around should be a testament to its ability to satisfy investors and garner profits no matter the situation the world finds itself in.
Though the stock could stand to be less volatile, investment into the company is an investment in the future boom in air travel once restrictions are fully lifted and people scramble to go on vacation. This is why analysts have placed a "buy" rating on the stock and see an estimated price increase to about $17.10.
2. Advanced Micro Devices (AMD)
Market Value: $125.47 Billion
Based in Santa Clara, California, AMD is a semiconductor company that develops computer processors and related technologies for business and consumer markets. If you are an investor that believes in the future of technology and would like to capitalize on the continuously evolving industry, AMD might be a good place to start.
Despite the unfortunate volatility of the company's stock, the expansion of the company in recent years has led it to have a larger market share and somewhat more stability. On top of that, share prices have increased by 15 percent in the last 6 months. Long-term investors should consider that the share prices have increased by 1,261.81% in the last 5 years.
The company has also projected a 50% revenue growth in 2023 -- probably because the shift towards digital that happened during the pandemic has increased demand for technology that runs smoother and faster.
As far as volatility goes, Advanced Micro Devices has a beta score of 2.05 which is quite high considering that this is the largest company in terms of market value on this list. That considered, analysts still saw it best to "buy" rating and a $101 fair value estimate for the company's stock.
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Russia is attacking Ukraine.
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The shutdown of a major energy pipeline to deter Russia… limited production capacity by OPEC… and Biden’s determination to rely on alternative energy in 2022 are adding up to one thing.
A historic shock in oil prices is coming.
Biden says, “I want to limit the pain the American people are feeling at the gas pump.” But a war in Ukraine would be Kuwait 1990 all over again.
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3. NOV (NOV)
Market Value: $4.84 Billion
NOV is one of the largest worldwide providers of equipment and components used in oil and gas drilling. They are also heavily engaged in production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry. The recent shutdown of travel and economic conditions of 2020 have crushed the oil industry and, coupled with the fact that many governments are pushing towards electric vehicles and renewable energy, NOV has been having a less than stellar run.
To be blunt, the performance of the stock year-to-date, over the past 12 months, or even through the last 5 years, is nothing to celebrate. The company is definitely going through some hard times with -14.68% over the last 6 months and a beta rating of 2.27.
That being said, the stocks for crude oil have rallied by 155% from a year ago. The company is still the undisputed leader of rig equipment and it would still take a few decades at least before the oil industry is phased out completely. Recovery is definitely in the cards for the company in the future.
This has compelled analysts to give the stock a "buy" rating and a $28 fair value estimate for NOV stock.
4. Tenneco (TEN)
Market Value: $1.30 Billion
Based in Illinois, Tenneco is an American automotive component original equipment manufacturer and as well as an aftermarket ride control and emissions products manufacturer. They are well-known as a provider of clean air, powertrain, and ride performance products for the auto industry. With the coming boom in the electric vehicle industry and the current rebound the automotive industry is experiencing, Tenneco is definitely on the radar for many high-risk investors.
Analysts project that the company's stocks will rebound by 14% in 2023. It should also be noted that the company's stocks have gained by more than 70% in the past 12 months. Being publicly traded since 1999, the company has almost every notable car-making company as its clientele. Their operations also span 9 states in the US and 6 of the 7 continents.
Despite a beta rating of 2.55, the company is expected to experience sizable long-term growth over the coming years. This includes a "buy" rating from Morningstar and a $30 fair value estimate for TEN stock.
5. Adient (ADNT)
Market Value: $3.72 Billion
Another company on this list that deals in the automotive industry, Adient is an American company based in Ireland, and is the largest supplier of automotive seating. Relatively new compared to the other companies on this list, this company got its start as a spin-off of Johnson Controls. As a car seat provider, the company accounts for one-third of the market's global revenue, providing components for 25 million vehicles.
Speculations about the company's even more prosperous future center around the fact that it is about to come into a lot of financial wiggle-room with the payment of their 2026 notes. The company's stocks have also gained by 113.72% over the past 12 months -- one of the largest on this list.
Sadly, volatility remains high with a beta rating of 3.3. The company still has a "buy" rating and an estimated price growth to $65.
6. Polaris (PII)
Market Value: $7.66 Billion
A notable producer of power sports vehicles, the company also provides off-road vehicles, snowmobiles, and motorcycles. The Minnesota-based company has recently had a management shake-up which has led investors to take a bullish stance with its stocks.
Over the past 12 months, the company's stocks have gained 21.24%. With plans for expansion and increased brand awareness, projections indicate a nice 32% average return on invested capital for Polaris over the next five years. This includes a "buy" rating and a $173 fair value estimate for PII stock.
7. Frank's International (FI)
Market Value: $623.52 Million
Nothing about this company seems to be particularly eye-catching. Over the last 12 months, the company's stocks have gained only 6.20% and are considerably the smallest company on this list in terms of market value.
That being said, the Netherlands-based company is currently in the process of a merger with Expro -- a UK company that is an international oil and gas service company, specializing in well flow management. Since Frank's International is an oil services company that specializes in tubular services, the merger is expected to lead to a more well-rounded company that might be a powerhouse in the oil industry of Europe and beyond.
Indeed the stock is quite volatile, having a beta of 1.36. That hasn't deterred investors though who see the stock as one with limitless return potential, giving it a "buy" rating and a $5 fair value estimate.
And those were the best high-risk stocks of 2021. We hope that this article was helpful in your decision-making, leading you down to a very fruitful investment path. High-risk stocks are less than ideal, but they represent such high potentials for returns that we understand the desire to gamble on them.
Due diligence and further research into a stock's short and long-term projections, as well as the forecast for external factors like politics or the world economy, are your best friends with this kind of stock. Taking your time to gather the right intel, formulating a good entrance and exit strategy, and risking your money as wisely as possible is simply your best bet to getting high returns with high-risk stocks.