TLRY - You've Been Warned! 3 Meme Stocks to Buy Now or Regret Forever
2024-07-12 06:58:00 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With the S&P 500 trading near all-time highs and the possibility of rate cuts, the meme stocks season is very much on the cards. Investors should, of course, remain focused on their core long term portfolio. At the same time, it’s a good idea to capitalize on the euphoria.
When the meme rally is underway for a stock, 3x or 5x returns can come in the blink of an eye. These returns can change the overall health of the portfolio. Therefore, instead of missing a good opportunity and regretting it, investors should consider some allocation to meme stocks.
This column discusses three meme stocks that can be at least 3-baggers in the next 12 months. The meme rally undoubtedly has a significant element of speculation. However, the rally can be fueled by fundamentally strong ideas with a robust growth outlook.
Let’s discuss three stocks that represent attractive businesses and are poised for a massive meme rally.
Joby Aviation (JOBY)
The flying car industry is at an interesting point, with multiple companies on track to commercialize eVTOL in the next 12 to 24 months. It’s therefore likely to be among the hot sectors in the coming quarters. Joby Aviation (NYSE: JOBY ) is an attractive pick among eVTOL stocks after a 49% correction in the last 12 months. I expect a big breakout rally as business developments remain positive and the meme frenzy builds.
Regarding business progress, Joby became the first “ electric air taxi company to have their final airworthiness criteria” published by the U.S. Federal Aviation Authority. The flying car company has also widened its partnership with the U.S. Air Force to deliver two aircraft in 2025.
Last month, Joby announced the acquisition of Xwing’s autonomous division. The latter has completed 250 fully autonomous flights and more than 500 auto-landings. It’s also the first company to receive an “ Air Force Military Flight Release in 2024.” This acquisition will likely help deepen ties with the U.S. Department of Defense.
I must add here that Joby already has partnerships for expansion in the UAE and Saudi Arabia. With these positives, it’s only a matter of time before JOBY stock skyrockets.
Bitfarms (BITF)
Bitfarms (NASDAQ: BITF ) stock has remained relatively subdued in the last 12 months. I see this as a good buying opportunity and expect 5x returns in the next 12 months. Besides the meme euphoria factor, there are two reasons for being bullish on BITF stock.
First, with the possibility of expansionary monetary policies, I expect another big rally in Bitcoin ( BTC-USD ). This is likely to benefit the crypto miner.
Further, Bitfarms has aggressive expansion plans. As of Q1 2024, the company reported a hash rate capacity of 10.4EH/s. Capacity is expected to increase to 21EH/s by the end of the year and further to 35EH/s by the end of 2025 . This is likely to translate into stellar revenue and EBITDA growth.
It’s also worth noting that for Q1, Bitfarms reported an adjusted EBITDA margin of 42%. With potential upside in Bitcoin and capacity expansion (operating leverage), EBITDA margin will likely be above 50%. With these positives, BITF stock will likely go ballistic in the coming quarters.
Tilray Brands (TLRY)
Tilray Brands (NASDAQ: TLRY ) stock has remained sideways in the last 12 months. I expect the cannabis stock to surge due to positive industry tailwinds and healthy revenue growth.
An impending catalyst for Tilray Brands is the likely reclassification of cannabis as a Schedule III drug in the U.S. The company has raised $250 million through an at-the-market offering. The liquidity infusion aims to look for opportunities in the U.S. once the reclassification is announced.
It’s also worth noting that U.S. Presidential elections are due later this year. With most Americans in favor of cannabis legalization, it’s likely to be a hot topic of debate. This will keep speculators excited about cannabis stocks and TLRY looks undervalued.
From a business perspective, Tilray has already been delivering healthy growth in the cannabis segment. Growth will likely accelerate as regulations get friendlier and the addressable market expands.
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 .
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
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