Investors tend to be interested in low-priced stocks. A probable reason is having a diversified portfolio with limited funds. A bigger reason is the speculative activity associated with these stocks. Three stocks under $2 are likely to skyrocket within the next 12 to 18 months.
While I mentioned speculative activity in low-price stocks, it does not imply that these stocks represent companies with poor fundamentals.
There can be one or a few business catalysts that can trigger a massive price action. A good example of my point is Novavax (NASDAQ:NVAX), which has surged from $4.5 to $12.6 in two trading sessions. This rally was triggered by a single news item related to a deal with Sanofi (NASDAQ:SNY).
Therefore, when looking at stocks under $2, the idea is to identify names with potential catalysts to trigger a big upside. Let’s discuss three probable ideas that might be positioned for stellar upside.
Tilray Brands (TLRY)
At the beginning of October 2020, Tilray Brands (NASDAQ:TLRY) stock was trading just below $5 levels. With Biden elected President, TLRY stock skyrocketed to $65 by February 2021. Of course, the rally fizzled out quickly, and TLRY stock continued to trend lower due to regulatory headwinds. However, the rally is a good example of the stock’s potential.
It’s a good time to talk about Tilray for multiple reasons. First, Presidential elections are due later this year, and there might be renewed hopes of federal-level legalization of cannabis. Further, there is a high possibility of cannabis being reclassified as a Schedule III drug. These potential developments can trigger a massive rally.
Recently, Germany legalized recreational cannabis. Other European countries are likely to follow suit. Further, medicinal cannabis has been gaining growth traction in Europe. Therefore, from a regulatory perspective, Tilray is well positioned to benefit. Even from a company-specific perspective, it’s likely that revenue growth will accelerate as the addressable market gets bigger. This is another potential catalyst for upside for TLRY stock.
Bitfarms (BITF)
Bitfarms (NASDAQ:BITF) is among the undervalued Bitcoin (BTC-USD) mining stocks to buy for multibagger returns. It’s worth noting that BITF stock has been in a downtrend for year-to-date. The reasons include equity dilution and stock discounting, which are relatively challenging mining environments after halving.
However, the correction seems overdone, and a sharp reversal rally is on the cards. An important assumption is the potential upside in Bitcoin. It’s being estimated that the cryptocurrency is likely to hit $115,000 this year. Further, the crypto bull market will continue in 2025, and the target for Bitcoin will likely be more prominent by the end of next year.
If this scenario holds true, Bitfarms is well positioned to benefit as the company boosts its mining capacity. At the end of 2023, Bitfarms reported hash rate capacity of 6.5EH/s. It’s expected that capacity will increase to 21EH/s by the end of 2024. If this is associated with a big rally in Bitcoin, BITF stock can trade in double digits quickly.
Solid Power (SLDP)
Solid Power (NASDAQ:SLDP) stock had touched lows of $1.1 in January. The stock is higher by 70% from those levels at $1.88. Positive business developments have triggered the big rally from deeply oversold levels. I remain optimistic about the further upside with Solid Power’s gradual progress toward commercializing solid-state batteries.
A key development in January was the company’s deepening partnership with SK On, Korea. Under this agreement, Solid Power will license its designs and production processes to SK On. The company will also install a pilot cell production line for SK On at the Korea facility. The agreement will help Solid Power make inroads into the Korean battery market.
It’s also worth noting that the company delivered A-1 sample cells to automotive partners in 2023 for validation testing. This year, the company focuses on A-2 cells with planned improvements from the previous version. Positive results from validation testing can trigger a big rally for SLDP stock.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.