While conservative plays can move you up the gridiron, sometimes you need the long ball, which is exactly the situation speculative stocks to buy specializes in. No, you’re not going to bet your lifesavings on these ideas. And no, you shouldn’t expect a smooth ride.
However, what you can expect is the possibility of significant upside returns. Given that the equities market in some angles can be viewed a zero-sum game, it’s inevitable that certain companies will draw the ire of investors. Nevertheless, the subsequent downside can go on for far longer than is rational. Those who recognize the hidden value can be rewarded handsomely.
Of course, there’s always the other side of the tale. In many cases, embattled organizations continue their downward trek. To minimize this risk factor, I’m focusing this list of speculative stocks to buy on enterprises that enjoy analyst backing.
So, if you’re ready, let’s dive in!
APA (APA)
A hydrocarbon exploration company, APA (NASDAQ:APA) doesn’t exactly align with contemporary energy sentiments. With seemingly everyone talking about green and renewable infrastructures, an upstream player in the fossil fuel industry appears anachronistic. Nevertheless, with hydrocarbons commanding high energy density, this commodity won’t be going away anytime soon.
However, APA stock trades as if it’s about to. Since the beginning of the year, shares lost 18% of equity value. In the trailing 52 weeks, they’re down almost 25%. But what’s odd is that the consensus of analysts believe that the company’s top line will expand this year and next. In 2023, sales hit $8.3 billion. In the current year, this figure should land at $8.7 billion and $9.86 billion in the next.
As for the high-side estimate, APA could ring up nearly $9.9 billion in sales this year and $12.62 billion in 2025. Fundamentally, if the economy fully normalizes, you’d expect more people to hit the road. That should accelerate consumption, driving up demand for hydrocarbon exploration specialists.
Overall, analysts rate shares a moderate buy with a $42.06 average price target. Thus, it’s one of the speculative stocks to buy.
Wolfspeed (WOLF)
A developer and manufacturer of wide-bandgap semiconductors, Wolfspeed (NYSE:WOLF) enjoys a powerful narrative. Essentially, this special class of computer chip offers significant advantages over its traditional counterpart, including less space imposition, quicker performance and more reliability and efficiency. Given the intense interest recently in artificial intelligence, wide-bandgap semiconductors could help swing the needle.
Unfortunately, Wolfspeed suffers from company-specific issues that have caused turmoil for WOLF stock. Since the start of the year, shares have lost nearly 41% of market value. In the past 52 weeks, the company gave up about 65%. Much of this pain centers on revenue projection shortfalls. In 2023, the company posted sales of $921.9 million. However, analysts believe that 2024 sales would only amount to $833.29 million.
I’m not so sure I believe this. In Q4 last year, Wolfspeed generated revenue of $208.4 million, up nearly 20% from the year-ago period. Further, analysts see a huge sales haul of $1.18 billion in 2025. So, pushing up the timetable doesn’t seem unreasonable based on rising demand for advanced semiconductors.
To close, analysts anticipate shares to hit $43.56 over the next 12 months. That’s over 70% upside potential, making WOLF one of the high-risk, high-reward stocks to buy.
Vuzix (VUZI)
Just several cents shy from being a literal penny stocks, Vuzix (NASDAQ:VUZI) represents extraordinary risk – let me start right there. If you’re looking for a reliable investment that you can trust through thick and thin, VUZI ain’t it. However, if you’re seeking speculation and fully understand the volatility risks involved, Vuzix could be intriguing.
Fundamentally, as a technology enterprise focused on wearable virtual reality and augment reality display innovations, the company stands on fertile ground. According to Grand View Research, the global VR sector reached a valuation of just under $60 billion in 2022. Analysts believe that the space could expand at a compound annual growth rate (CAGR) of 27.5% to 2030. At the culmination point, the industry could be worth $435.36 billion.
As for Vuzix, the company posted revenue of $13.15 million in 2023. For next year, the Street pegs sales to land at $15.14 million, 15% increase over the prior year’s result. That’s on average. The high-side target calls for sales of $17 million or over 29% up.
Looking ahead, analysts forecast shares to hit $3.50, implying nearly 119% upside potential. If so, that would easily make VUZI one of the stocks to buy.
On the date of publication, Josh Enomoto did not have (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.