Has your portfolio's value taken an unusually big hit this year? Perhaps you've suffered what most investors would consider a complete wipeout. Maybe you're rethinking when -- or even if -- you'll be able to retire.
Not to suggest that the emotional devastation isn't just as difficult as the financial loss, but these things happen.
The thing is, you can bounce back! You'll just need to do things a bit differently than you had originally intended. Namely, you'll need to be more aggressive with your stock picks, but still just as smart. Here's a closer look at three stocks with incredible potential for capital appreciation, but that aren't as risky as you'd typically expect when you're (proverbially) swinging for the fences.
Yes, this is the same Rivian Automotive (RIVN -3.88%) that recently announced a recall of nearly every one of the electric vehicles it's ever made. It's an inauspicious start for the company that only began meaningful mass production of its EVs earlier this year.
The market's response to the news was as encouraging as it was curious. Rather than rekindling the selling that dragged the stock sharply lower between November's post-IPO peak and May's low, investors mostly shrugged it off. It's a hint that people still believe the stock's current reduced price fairly reflects the company's plausible future despite the black eye stemming from the recall.
And that's arguably not a bad move.
Tesla may be the biggest name in the business, but it's not going to remain the only major player in the EV industry forever. Rivian's got a chance to be a key player too, and there's certainly going to be lots of business to go around. The U.S. Energy Information Administration estimates the number of electric vehicles traversing the world's roads will grow from a little over 10 million now to more than 670 million by 2050.
Shareholders won't have to wait that long to see marked success, though. Analysts are still calling for this year's projected top line of $1.8 billion to swell to $6.2 billion next year, taking another sizable bite out of Rivian's so-far-recurring losses.
Cybersecurity stocks aren't particularly scarce anymore. And, while few people would deny there's a stark need for protection from hacking and digital data breaches, a strange number of cybersecurity companies remain in the red. SentinelOne (S -2.94%) is no exception.
SentinelOne is making much faster profit progress than its peers, though, with expected top-line growth of more than 100% this year finally starting to reduce its per-share losses. Next year's the big proverbial pivot, however. Analysts are modeling 2023 revenue growth of 64%, which should reduce this year's likely loss of $0.81 per share to a loss of only $0.47 next year. A swing to net earnings is at least on the radar; shares could start to reflect that impending victory well before it actually happens.
The driver of all this growth is the nature of SentinelOne's flagship product. It's more than just firewalls and threat detection. Its flagship Singularity XDR (extended detection response) platform does it all, and does so largely on its own. See, Singularity XDR uses artificial intelligence to autonomously make decisions that it would take humans far too long to make.
And there's no doubt the company is great at what it does. IT consulting firm Gartner ranked SentinelOne as one of last year's leaders within the endpoint protection platform market, placing it shoulder-to-shoulder with Microsoft and McAfee.
The stock's currently trading about 40% below its consensus price target of $36.44. As the company proves itself with revenue and earnings growth, don't be surprised to see that average target price make its way higher.
Finally, add Danish biopharma company Genmab (GMAB -2.66%) to your list of stocks that offer a lot of upside potential but without imposing a lot more risk.
It's not a household name. The company only reported sales of around $1.1 billon last year, in fact, and while much better than that figure, this year's top line is still only on pace to reach roughly $1.6 billion.
But as the old adage goes, Genmab is just gettin' started.
The key to this stock's potential is the underlying science for its portfolio and pipeline. Genmab's tech facilitates the creation of antibodies that help cancer patients' own immune systems fight the disease better than some conventional cancer therapies can.
It's not a completely unheard-of approach. It is a relatively new idea, though, and Genmab is one of the companies leading the charge. Its technology is already the basis for six different approved treatments, with more than 20 products currently in clinical development.
Perhaps the most bullish argument for owning Genmab is the caliber of drug-development partners now working with the company. AbbVie, Johnson & Johnson subsidiary Jansenn Biotech, BioNTech, and Novartis are just some of the pharma companies using Genmab's proprietary know-how to develop therapies. Indeed, Johnson & Johnson reported $2 billion worth of sales of its cancer-fighting Darzalex during the third quarter of this year. Since it's a therapy built on Genmab's intellectual property, the company is collecting royalties on those sales as well as on sales of five other drugs -- and increasingly more of it. Royalty revenue through the first half of this year was 82% better than it was through the first half of last year.
The kicker: Although young, Genmab is already profitable. Not many biopharma companies of its size and age can make the same claim.