You've probably heard the old adage, "It takes money to make money." And it's true. You do have to have some initial money to invest.
But you don't necessarily have to have a lot of up-front cash -- especially if you pick the right stocks. Got $2,000? Here are three stocks to buy that could double your money.
1. Madrigal Pharmaceuticals
If Wall Street is right, Madrigal Pharmaceuticals (MDGL -0.54%) stock could go a long way toward doubling your money over the next 12 months. The average price target for the biotech stock reflects an upside potential of 65%. All three of the analysts surveyed by LSEG in November rate Madrigal stock as a buy.
There's a simple explanation for this bullishness. Madrigal could win U.S. Food and Drug Administration (FDA) approval for resmetirom in treating nonalcoholic steatohepatitis (NASH) by March 14, 2024. The FDA isn't even planning to convene an advisory committee to review the application for resmetirom. That's a good sign.
NASH is a leading cause of liver-related deaths. It has become an increasingly expensive disease for healthcare systems across the world. As of now, there aren't any FDA-approved therapies for treating NASH. Resmetirom has a great chance of becoming the first.
If approved, the drug will almost certainly become a blockbuster. Analysts' peak annual sales estimates range from SVB's $2.5 billion to Evercore ISI's $8.5 billion projection. With Madrigal's market cap below $3.8 billion right now, it's not very hard to envision a successful commercial launch helping this stock to double over the next few years.
2. TransMedics Group
TransMedics Group (TMDX 3.17%) doesn't have a huge near-term catalyst as Madrigal does. However, the prospects of this stock doubling or more over the next five to 10 years look excellent, in my opinion.
The most important thing to understand about TransMedics is just how much it's disrupting the organ transplant market. For decades, donor organs have been placed in coolers for transport to their intended target patients. Unfortunately, many of the organs don't survive the trip. TransMedics' Organ Care System (OCS) keeps donor organs functioning without cold storage, resulting in much higher utilization rates and much fewer post-transplant complications.
TransMedics is also solving another big issue. In the past, the lack of availability of airplanes to fly donor organs to their target destinations has been a problem. TransMedics recently acquired private charter operator Summit Aviation to create the first provider of air logistics operating across the U.S. that's dedicated exclusively to organ transplantation.
In the third quarter of 2023, TransMedics' revenue soared 159% year over year. The company isn't profitable yet, but I think it has a clear path to profitability. TransMedics is going after a multibillion-dollar market opportunity with a game-changing solution. Its current market cap is only around $2.3 billion. Those are the right ingredients for delivering exceptional returns, in my view.
3. UiPath
Wall Street doesn't have great expectations for UiPath (PATH 0.26%) over the near term. The average 12-month price target for UiPath is only 3% above its current share price. But Cathie Wood's Ark Invest team thinks that this stock could be part of an "AI sleeper wave." I suspect they could be right.
UiPath is a leader in business process automation software. The company believes that AI-powered technology could eventually do anything that a person can do related to processing data -- but faster and better.
Generative AI, in particular, could provide a nice tailwind for UiPath. The company launched "Project Wingman" in August in a "private preview" for select customers. This tool combines UiPath's AI Computer Vision product with generative AI to enable customers to automate processes using simple natural language prompts.
I think that UiPath should be able to continue growing revenue in the ballpark of 20% per year, with earnings increasing at an even faster rate. If so, the stock could double or more over the next few years.