One of the wildest years in stock market history is now in the books. Amazingly, after losing more than a third of its value in less than five weeks during the first quarter, the benchmark S&P 500 rallied to finish 2020 higher by 16%. For context, that's nearly double its historic average annual return over the last 40 years. It's pretty incredible outcome considering we're navigating our way through a pandemic and the worst recession in decades.
Yet the figure that stands out most is that 1 in every 10 stocks over a $300 million market cap rose by at least 100% in 2020. This includes nine of the 20 stocks I predicted could double your money for 2020. The average return for the 20 companies on last year's list was nearly 88%.
Though valuations are stretched, I believe the following combination of eight growth and comeback-story stocks have the tools to double your money in 2021.
1. Cresco Labs
One of the easiest ways to "go green" in 2021 is to consider buying into cannabis multistate operator Cresco Labs (CRLBF -4.57%). While it's possible we see some modestly eased restrictions on marijuana from the federal government, Cresco simply needs state-level legalizations and organic growth to thrive.
On one hand, the company has a small but rapidly growing retail presence. It holds 29 dispensary licenses and has 20 operational stores. Of these open locations, roughly half are located in Illinois. The Land of Lincoln began allowing recreational weed to be sold a year ago. Estimates suggest that Illinois could top $1 billion in annual pot sales by 2024.
But the even more exciting growth segment for Cresco is its wholesale division. Acquiring Origin House in January 2020 allowed Cresco to come into possession of a cannabis distribution license in California (the most lucrative pot market in the world). This lets the company to place pot products into more than 575 dispensaries throughout the Golden State. If we assume that California regulators continue to work through existing red tape, Cresco's access to dispensaries can soar in 2021 without it having to do much in the way of legwork.
Look for Cresco to push into recurring profitability in 2021 and make a run toward triple-digit gains by year-end.
2. SSR Mining
Gold stock SSR Mining (SSRM 2.35%) is a bit of a "homer" play, as it's been my largest holding for years. While it's rare to see a mining stock double in a single year, SSR has a confluence of factors that could allow a triple-digit gain to take place.
From a macro perspective, the outlook for physical gold has never been better. The Federal Reserve has pledged to keep interest rates near historic lows through 2023, and the central bank continues to buy $120 billion worth of federal government debt each month. Further, a record amount of investment-grade global debt recently boasted a negative yield. It's very difficult to find safe, inflation-topping returns, which is why physical gold can easily push beyond $2,000 an ounce in 2021.
But it's not just higher gold prices that'll help SSR Mining. It recently completed a merger of equals with Turkey's Alacer Gold. Alacer owns an 80% interest in the high-yield, low-cost Copler mine. In 2021, SSR Mining's production should handily surpass 700,000 gold equivalent ounces, with the company bringing in $450 million in free cash flow. SSR is also kicking off a dividend program in the first quarter.
Traditionally, gold and silver stocks rocket higher in the early stages of an economic recovery, implying that this is SSR's time to shine.
Finding a company involved in the cloud that's valued at less than 10 times sales is practically impossible. The coronavirus pandemic demonstrated how important online and cloud access are for businesses, which coerced investors to pay insane multiples. But one intriguing name slipped through the cracks: Cloudera (CLDR).
The thing about Cloudera is that it wasn't always a cloud company. Over roughly the past year, it's moved away from its legacy data platform and has pushed its new hybrid Private Cloud and Public Cloud offerings. This ongoing transformation allows the company to generate cash flow from its legacy operations, while also transitioning these enterprise customers into higher-margin, cloud-native platforms. In the October-ended quarter, subscription revenue jumped 18% from the prior-year period.
Cloudera is also looking out for its shareholders with a $500 million share repurchase program. If fully completed, Cloudera could retire an eighth of its outstanding shares. Buyback programs tend to lift earnings per share and make a company appear more fundamentally attractive to investors.
With sales growth likely to exceed Wall Street's expectations in calendar year 2021, and the company valued at just over 4 times forward-year sales, Cloudera has plenty of reason to rocket higher this year.
4. OrganiGram Holdings
Your eyes are not deceiving you -- OrganiGram (OGI 0.81%) is a Canadian pot stock. Though Canadian marijuana stocks have been an awful investment up this point, OrganiGram has a couple of unique advantages that could allow it to surprise Wall Street in a big way in 2021.
One of the biggest issues with Canadian pot stocks is that they've been hamstrung by regulators at the federal and provincial level. The good news is that key provinces, like Ontario, have begun opening new dispensaries at a steady rate. In other words, the supply bottlenecks that've crushed margins and consumer demand should become a thing of the past this year.
More specific to OrganiGram, it has just one major cultivation site: Moncton in New Brunswick. Instead of opening multiple grow sites, acquiring other businesses, and overextending capacity, OrganiGram has been exclusively focused on Moncton. Having just one site allows it to be more nimble with regard to cost-cutting, production, and product mix.
To build on this point, OrganiGram also employs three tiers in its cultivation rooms, which maximizes its licensed space and helps to improve overall yield.
It wouldn't surprise me if OrganiGram's cost-cutting, coupled with the maturation of the Canadian pot industry, allowed the company to eke out a profit in 2021. With its shares so deeply depressed, it wouldn't take much for this stock to double.
In the financial space, online insurance marketplace EverQuote (EVER -2.14%) could give investors an encore performance after rocketing higher in 2019 and mostly going sideways in 2020.
The beauty of the EverQuote model is that it's built to take advantage of insurers switching their customer capture activity online. An estimated $146 billion in spent annually on advertisements and distribution by insurance companies -- $5.6 billion of which is digital spending. This digital spend is expected to grow by 16% annually through 2024, and is where EverQuote makes its home.
Though the company has historically generated most of its revenue from auto insurance, it's been shifting into new verticals organically and through acquisitions (e.g., the purchase of health insurance agency Crosspointe in early September). This includes health, home, renters, and life insurance. These newer verticals have been growing at a much faster pace than its traditional insurance segment, and they've been responsible for EverQuote regularly upping its full-year sales forecast.
The simple fact is that EverQuote's platform is a win-win for both parties. It's a simple platform for consumers to quickly price-shop for insurance without filling out a mountain of forms, and it's an efficient way for insurers to land motivated consumers. EverQuote offers sustainable double-digit growth, yet is valued at less than 3 times forward-year sales. That's a bargain I suspect won't stay a bargain for much longer.
6. Teva Pharmaceutical Industries
Brand-name and generic-drug developer Teva Pharmaceutical Industries (TEVA -2.29%) is a logical choice to bounce back in a big way in 2021.
To keep things short and sweet, Teva's been clobbered in recent years by a bribery settlement, its association with the opioid crisis, and due to allegations of generic-drug price-fixing. That's not good news, but the company also has a secret weapon: CEO Kare Schultz.
Schultz's tenure began in November 2017. Since taking over, he's reduced Teva's annual expenditures by $3 billion and cut the company's net debt by over $10 billion. At this trajectory, Teva's net debt should decline from north of $34 billion in 2017 to potentially less than $15 billion by 2023.
Aside from improved financial flexibility, Schultz should also be responsible for navigating Teva out of its legal mess. If the company can resolve its outstanding opioid and price-fixing lawsuits without much in the way of cash penalties, that alone could more than double Teva's share price.
At less than 4 times forward earnings, I'll be looking for a serious rebound in 2021.
7. Jushi Holdings
In case you haven't noticed, U.S.-based marijuana stocks are a big theme this year. Despite more than quadrupling in value over the trailing six months, vertically integrated multistate operator Jushi Holdings (JUSHF -4.26%) gets my nod as a candidate to double.
What's unique about Jushi is the company's focus on the limited license states of Pennsylvania, Virginia, and Illinois. A limited license state caps the total number of dispensary licenses they issue, or assigns licenses based on a specific territory. The advantage of this approach is that it protects Jushi from facing much, or any, competition.
Jushi also stands out for its management team have a healthy amount of skin in the game. Of the roughly $250 million in capital raised since inception, executives and insiders have contributed $45 million. When insiders and investors are on the same team, good things usually happen.
The opening of retail locations in Virginia, along with organic growth opportunities in Pennsylvania and Illinois, could see Jushi nearly triple its sales in 2021. That could be more than enough to double its share price.
Following a nearly 170% gain in 2020, I'm seriously suggesting that a furniture company could tack on back-to-back triple-digit returns for investors.
Lovesac (LOVE 2.17%) is unique in a variety of ways -- and it begins with the company's modular furniture. Targeted at millennial investors, the yarn used in Lovesac's sactionals is made from 100% recycled plastic bottles. Its furniture can also be rearranged to fit any living space, with over 250 machine-washable covers that can be purchased. It's eco-conscious and puts the consumer in complete control of their living space.
Beyond a compelling and superior product, Lovesac has done a bang-up job of adjusting its game plan to operate during the pandemic. With showrooms closed in certain regions, the company has predominantly shifted its sales platform online. Though it's still landing major showroom partners (e.g., Best Buy), the pandemic has shown that Lovesac can successfully operate with minimal overhead on a direct-to-consumer basis. This effectively expedited its push to recurring profitability.
The crazy thing is that Lovesac is still only valued at 1.6 times its forward-year sales. As this young bull market stretches its legs, look for Lovesac to become a favorite among growth-seeking investors in 2021.