As mentioned recently in the U.S. News roundup of the best long-term ETFs to buy and hold, plenty of research shows it’s more profitable in the long haul to stick with diversified funds than to churn in and out of fashionable positions.
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That said, many investors hope to fall outside the norm and do make aggressive but highly profitable bets. Some younger investors even demand that kind of high-risk, high-reward performance since they’re far enough away from retirement — or of such modest means anyway — that a “YOLO” trade gone wrong is just the cost of investing to them.
If you don’t want to settle for vanilla index funds and prefer bolder flavors in your investing portfolio, here are seven ideas for you with high-risk, high-reward stocks to buy in pursuit of breakout gains. There are no guarantees here, but the potential still makes them worth a look:
| Stock | Year-to-date performance* |
| Albemarle Corp. (ticker: ALB) | -20.2% |
| Boeing Co. (BA) | -36.0% |
| Land’s End Inc. (LE) | 36.4% |
| New York Community Bancorp Inc. (NYCB) | -69.7% |
| Nvidia Corp. (NVDA) | 66.9% |
| Spirit Airlines Inc. (SAVE) | -77.8% |
| Tesla Inc. (TSLA) | -31.5% |
*Through April 25.
Albemarle Corp. (ALB)
This materials company may not be a familiar name to some investors, but North Carolina’s Albemarle is one of the world’s largest providers of lithium products and chemicals. With the rise of an electrified global economy as well as growing concerns over carbon emissions and climate change, lithium is an increasingly critical part of the modern energy storage landscape. Unfortunately for ALB stock, however, production worldwide has picked up to respond to this need even as a slowing economy in China has created a dip in overall demand. As these widespread commodity price trends influence Albemarle significantly, shares have been cut in half from their 2023 highs.
If and when the marketplace stabilizes, however, this nearly $14 billion lithium company could snap back in a big way.
Boeing Co. (BA)
You’d have to be living under a rock to be unaware of the highly publicized issues that have plagued aerospace giant Boeing lately. The most recent crisis started back in January when a Boeing 737 Max 9 operated by Alaska Air Group Inc. (ALK) lost a “door plug” midflight. The nightmare continued with the discovery of loose parts around other grounded flights and lost documents — culminating with a whistleblower complaint in March followed by the whistleblower being discovered dead. Shares are down 36% in 2024 alone, and there is clear risk of both a massive corporate scandal as well as fines, lawsuits, regulatory pressures and more.
That said, the hard reality is that making planes is an expensive and complicated business to get into, and other than France’s Airbus SE (EADSY), there aren’t many other alternatives to Boeing. That may mean this stock survives — and even thrives — if it can overcome this rough patch.
Land’s End Inc. (LE)
Once under the brand umbrella of now-defunct department store Sears, Land’s End was spun off in 2014 as a standalone apparel firm. It’s been rough going since then, as the company tried to stand on its own even as younger consumers failed to connect with the brand. But lately, LE has been figuring things out, going after Gen Xers who may remember it from their days at the mall a few decades ago, and the clothing is now on display at Target Corp. (TGT) and Kohl’s Corp. (KSS), as well as online at vendors like Amazon.com Inc. (AMZN). Shares have almost tripled since their 52-week low as the company has shown signs of stabilizing lately — but LE remains a high-risk investment all the same. Though it has proven to be “less bad” than naysayers have feared, there are legitimate concerns about how the brand will continue to connect in a crowded consumer marketplace.
[15 Best Dividend Stocks to Buy for 2024]
New York Community Bancorp Inc. (NYCB)
Last year, investors endured a lot of volatility in the regional banking sector as First Republic and Silicon Valley Bank both went into “receivership” with the Federal Deposit Insurance Corp. (FDIC). But while the news rocked Wall Street — SVB was the second-largest bank failure in history, second only to Washington Mutual during the 2008 global financial crisis — the dark predictions of contagion didn’t pan out. Recently, however, NYCB has been giving Wall Street the jitters thanks to credit downgrades and what some see as structural problems with its financial risk controls. Investors have seen shares bounce back from their lows of around $1.70 to the $3 range recently. However, there’s no guarantee that another round of bad headlines won’t send NYCB to zero on a crisis of confidence, so … buyer beware.
Nvidia Corp. (NVDA)
Some of the stocks on this list are definitely troubled, but could be an opportunity to buy low and sell high later. Gravity-defying NVDA stock, however, is a classic case of “buy high, sell higher” in a stock with amazing upside momentum. The company is now up to $2.2 trillion in market value after a jaw-dropping run of 1,800% in the last five years. Admittedly, Nvidia is going to have to deliver on all its ambitious future growth estimates to justify its valuation after this surge. And while the chipmaker has been a first-mover into areas ranging from cryptocurrency mining hardware to artificial intelligence, there’s the risk of disruption as competitors race to catch up. That said, the past performance of NVDA stock makes it hard to overlook entirely. It’s priced for perfection, but it has proven it can deliver in the past and may very well continue to do so going forward.
Spirit Airlines Inc. (SAVE)
Sure, Boeing was mentioned earlier, but carrier Spirit Airlines has a very different story than manufacturing and safety issues. The airline business has never been particularly reliable, as it’s tied to the ups and downs of consumer and business travel trends and bankruptcies in the sector have been fairly common over the past few decades. Spirit looked like it was going to roll into competitor JetBlue Airways Corp. (JBLU) via a $3.8 billion merger to save costs and join forces, but regulators scrapped the deal thanks to competitive concerns — and now that this small carrier has to figure it out on its own, investors are skeptical it has what it takes to protect its turf from other airlines. Shares crashed from about $16 to start January to $6 by February as the news broke, and shares have steadily drifted lower since then. There’s a chance another buyer emerges, or that Spirit can scramble to cut costs and compete on its own. If it does, you could see a quick and substantial rebound. If it can’t, there may be no way to save SAVE stock.
Tesla Inc. (TSLA)
One of the five worst-performing stocks in all of the S&P 500 this year, Tesla shares are down more than 30% since year to date through April 25. Part of it is the hard numbers, as Tesla’s vehicle deliveries declined by 8.5% in the first quarter compared with the same quarter a year ago. Part of it is also the tarnish on the brand: Iconic CEO Elon Musk continues to rub some folks the wrong way, and the hyped-up Cybertruck has suffered highly publicized issues including shorting out after carwashes and “finger guillotine” door closures. But Tesla has silenced its critics many times before, and the company has proven itself to be the clear winner in electric vehicle market share — so if you don’t mind a rash of recent bad news, this may be a high-risk stock to pursue for long-term upside.
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7 High-Risk, High-Reward Stocks to Buy originally appeared on usnews.com
Update 04/26/24: This story was previously published at an earlier date and has been updated with new information.
