To the moon? The rallying cry for Dogecoin (DOGE 0.05%) fans doesn't seem all that realistic these days. The cryptocurrency's price has plunged more than 70% below the peak set in early May.
Simply proclaiming that an asset will go "to the moon" won't make it happen. There's almost always a lot of hard work required. A good bit of luck helps, too.
If you're seeking to make outsized returns, the best alternative is to buy shares of companies working hard to succeed and that could be huge winners with a lucky break or two. Ditch Dogecoin -- here are three stocks that could double your money.
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Axsome Therapeutics
My Motley Fool colleague Cory Renauer views Axsome Therapeutics (AXSM 0.49%) as one of the top biotech stocks to buy this summer. I think that Cory's take on this up-and-coming biotech is spot-on.
Axsome doesn't have any products on the market yet. However, that could change very soon. The U.S. Food and Drug Administration (FDA) is scheduled to make an approval decision on AXS-05 in treating major depressive disorder (MDD) by Aug. 22.
The company plans to file for FDA approval of AXS-07 in treating migraine any day now. It expects to submit for FDA approval of AXS-14 in treating fibromyalgia in the fourth quarter of 2022. Axsome also plans to advance AXS-12 into late-stage testing this year for treating narcolepsy and is evaluating AXS-05 in clinical studies as a potential treatment for Alzheimer's disease agitation and smoking cessation.
Axsome thinks that AXS-05 could generate peak annual sales of between $1 billion and $3 billion in the MDD indication with the possibility of another $1.5 billion to $3 billion in treating Alzheimer's disease agitation. The biotech believes that its other three experimental drugs could rake in peak sales of between $500 million and $1 billion each if approved.
Currently, Axsome's market cap is around $2.7 billion. The biotech should only need one or two of its pipeline candidates to succeed for its stock to double or more.
Cresco Labs
One of the biggest opportunities for investors right now is in buying U.S. marijuana stocks. Cresco Labs (CRLBF -5.34%) stands out as a top pick. The vertically integrated cannabis company operates in 10 states and ranks as the No. 1 wholesaler of branded cannabis products in the U.S.
Cresco's revenue soared 169% year over year in the first quarter of 2021. Cresco already generates positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). It has a clear growth runway with current cannabis markets expanding and new markets opening for business.
What I really like about Cresco is its valuation relative to its peers. The stock trades at less than four times sales. That's one of the lowest price-to-sales multiples in the cannabis industry, including both U.S. and Canadian pot stocks.
I think that Cresco stock could double simply by continuing to expand into new markets. However, if federal cannabis laws are changed in a way that allows the company to list its stock on a major U.S. stock exchange, my hunch is that Cresco could deliver more than 2X returns over the next few years.
DermTech
DermTech (DMTK -4.66%) is an overlooked healthcare stock that could be a huge winner, in my view. The company currently markets Pigmented Lesion Assay (PLA), a genomics product used for early melanoma detection.
It's still only the early stages for DermTech. The company continues to pick up payer reimbursement deals and introduce PLA to dermatologists. However, sales are booming with Q1 revenue jumping 62% year over year.
The consensus analysts' 12-month price target on the stock reflects close to a 50% premium above DermTech's current share price. I think Wall Street's optimism about DermTech is well-founded. But can DermTech really double your money? My view is that it definitely could over the next few years.
The company estimates the total addressable market in diagnosing skin cancer via genomics totals close to $10 billion. DermTech's market cap currently stands at $1.2 billion. Capturing only a fraction of the total addressable market would likely enable the stock to deliver a 100% or greater return.
