Even while a flight to safety is underway, many investors are looking for stocks that could double. But aside from penny stocks, it may be overly optimistic to find stocks that will meet that criterion in 2023.
However, there’s something to be said for being greedy while others are fearful. If you have a long-term outlook, you can take advantage of the stock market’s upward bias. And in three years the equities market is likely to be dramatically different. If that’s true, stock prices will be much higher than they are today. That’s why now is the time to look for stocks that make good candidates to double by 2026.
In an effort to provide something for every investor, there is one large-cap, one mid-cap and one small-cap stock pick. Each of these stocks has a story that makes it a candidate to enter a position today and add to that position over the next couple of years when the market is likely to look much different.
After years of agreeing with Tesla (NASDAQ:TSLA) CEO Elon Musk that the company’s stock was overvalued, I believe that the recent selloff in TSLA stock is overdone. The transition to electric vehicles is likely to take longer than analysts were forecasting. Nevertheless, Tesla is the unquestioned leader in the space and there’s nothing to suggest it’s going to relinquish that position.
At this time, Tesla shares are trading in the lower half of its split-adjusted 52-week average, and TSLA stock is up an impressive 55% since the start of the year. It seems that investors are getting over concerns about Musk’s purchase of Twitter and are instead focusing again on the company’s fundamentals.
That seems to be the opinion of Moody’s (NASDAQ:MCO) which recently upgraded its credit rating on Tesla. This was a move that was, frankly, long overdue. Additionally, Barclays (NASDAQ:BCS) recently reiterated its Moderate Buy rating on the stock with a price target of $275. From there, the leap to approximately $360 over the next few years is very attainable when you consider that Tesla has a profit margin that’s more than double the sector average.
Sprouts Farmers Market (SFM)
The mid-cap stock on this list of stocks that could double by 2026 is Sprouts Farmers Market (NYSE:SFM). As a high-end retailer, investors may have expected a drop-off in revenue and earnings due to inflation. But that hasn’t been the case. The company has shown solid growth on both the top and bottom lines which is a trend that’s expected to continue in 2023.
With SFM stock trades at an attractive valuation of just 14x earnings, you can’t help but notice the company’s valuation. It has a profit margin that’s more than double the sector average, which makes it easy to see why Sprouts Farmers Market is expecting 25% sales growth over the next four years.
That should also be enough to raise the expectations of analysts, which currently puts the stock slightly above its consensus price target. Shareholders also benefit from the company’s ongoing share repurchase program.
Bark Inc (BARK)
For several months, I’ve been inclined to steer investors away from unprofitable companies. This is no time for moonshots. And I’ll admit that’s what you have with Bark (NYSE:BARK). The e-commerce dog-forward retailer went public during the pandemic as one of the many Special Purpose Acquisition Companies (SPAC) stocks. Traders flush with stimulus were attracted to the company’s business model which delivered a “mystery box” of dog toys, treats, and chews to eager consumers.
But like many SPAC companies, particularly those in the tech sector, Bark has lost its bite (if it ever had one). The company is not profitable and recently laid off 12% of its workforce in an effort to achieve profitability which isn’t expected until 2025 at the earliest.
With that said, BARK stock trades for just over $1. While it’s not heavily covered by analysts, those that do suggest that the stock could reach over $2 a share which would count it among the stocks that could double in the future.
On the date of publication, Chris Markoch did not have (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.