2 Super-Bold Growth Stock Picks for 2020
The average investor can expect a long-term annual return of 4-6% from well-established, blue-chip stocks. Meanwhile, investors with an appetite for modest risk can achieve low double-digit annual growth through beaten-down oil stocks or commercial real estate investment trusts.
However, even double-digit percentages aren’t enough for some investors. What if you’re looking for a highly speculative bet that promises triple digits? What if you’re looking to gamble with a small fraction of your portfolio? Here are two bold growth stocks that might satisfy your inner venture capitalist.
WELL Health Technologies
You may not have heard of it, but Vancouver-based Well Health Technologies (TSXV:WELL) has been trying to revolutionize one of the largest and most lucrative industries in the world: healthcare.
The company provides software as a service that helps medical practitioners store and manage critical client health records in the cloud. Recently, the company has been starting up its own tech-enabled clinics. At the moment, the team owns and operates 19 medical clinics that serve roughly 180 physicians across British Columbia.
In the third quarter of 2019, sales jumped 328% from the previous year, while margins improved from 29.2% to 35.2%. Unsurprisingly, the stock price jumped 90% in the week after earnings were released. Altogether, the stock is up 250% over the past 12 months.
Healthcare in Canada alone is a multi-billion-dollar industry. Across North America, it’s worth trillions. This company has an unbelievably large potential opportunity, which makes it a bold addition to a hypergrowth-seeking investor’s portfolio.
Drone Delivery Canada
Similarly innovative is Toronto-based unmanned aerial vehicles operator Drone Delivery Canada (TSXV:FLT). The company has spent the past year striking major supply testing deals with remote communities and commercial airlines across the country.
However, investors have been unimpressed, and the stock is down 40% over the past 12 months. At the moment, the company is pre-revenue and is worth just shy of $141 million. I believe the stock could skyrocket once the technology is ready for mainstream commercial use.
According to experts, the global drone delivery market could be worth as much as $100 billion in 2020 alone. Using drones for last-mile delivery could make online goods, critical parts, and medical supplies more accessible. Across the world, nice drone delivery startups are emerging to solve this issue.
In Canada, DDC seems to be the clear leader at the moment. Considering its first-mover advantage in this immense industry, the stock is a perfect buy for any investor looking for a speculative bet on an enticing new technology.
Foolish takeaway
I firmly believe that investors should reserve a small portion of their portfolio for speculative stocks with the potential for hyper-growth. Young and innovative companies that are trying to revolutionize their industry are long shots that could deliver incredible returns, even though the odds are stacked against them.
WELL Health Technologies and Drone Delivery Canada are both innovative startups in rapidly expanding industries and are capable of triple-digit growth rates, which should earn them a spot on your growth watch list. However, investors should be aware of the potential risks and pitfalls of investing in early-stage companies like these before they dive in.
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Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned.
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