Stocks to buy

3 Stocks to Buy for Lottery Jackpot Style Returns

While the idea of making it big with the winning lottery ticket sounds appealing to practically anybody, the reality is that you’re better off targeting stocks with high returns. Don’t get me wrong – this segment of the capital market presents incredible risks. But looking at the numbers, you’re truly better off with high-growth stocks as a legitimate strategy.

For example, Harvard University statistician Mark Glickman stated that the odds of winning the Powerball jackpot sit at one in 292.2 million (assuming you buy a single $2 ticket). I’m not entirely sure what the odds are regarding stocks with lottery-like returns. However, I’m certain they’re a heckuva lot better than one in 292 million.

Another advantage regarding stocks to buy for big returns is that, at the end of the day, picking market ideas represent an investment. That means you don’t have to worry about your ticket expiring and becoming worthless. You shouldn’t necessarily hold onto losing investments. Nevertheless, the point is that you choose when to buy and sell.

With that, leave the scratchers for another day and grab these top 3 high return stocks.

Etsy (ETSY)

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An e-commerce firm focused on handmade or vintage items and craft supplies, Etsy (NASDAQ:ETSY) doesn’t quite strike investors as one of the stocks with high returns, if we’re being honest. However, D.A. Davidson analyst Tom Forte disagrees. Recently, Forte reiterated a bullish assessment of ETSY stock along with a $166 price target. Should ETSY reach the target, we’re talking about an upside potential of over 72%.

To be fair, ETSY does have some issues that make it a risky idea for stocks with lottery-like returns. First, the company doesn’t exactly have the most stable balance sheet. For example, its Altman Z-Score sits at 2.24, which gets uncomfortably close to the distressed zone.

What’s more, ETSY trades at a forward earnings multiple of 28.4. In contrast, the sector median stat rates far lower at 15.28x. Still, on the positive side, Etsy represents a growth machine. Right now, the company posts a three-year revenue growth rate (per-share basis) of 46%, ranked above 94% of the competition. Therefore, it’s worth putting on your radar for high-growth stocks.

bluebird bio (BLUE)

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A biotechnology firm, bluebird bio (NASDAQ:BLUE) develops gene therapies for severe genetic disorders. Given the sector’s innovative profile, it’s no surprise that BLUE ranks among the stocks with high returns. Specifically, analysts peg shares a consensus moderate buy with an average price target of $7.86. Should shares reach that lofty level, we’re talking upside of over 98%.

In the spirit of full disclosure, Bluebird isn’t an investment for everyone. For example, the company suffers from a poor balance sheet. Conspicuously, its Altman Z-Score sits at 7.47 below zero, indicating deep distress and higher-than-average bankruptcy risk. Also, the company’s trailing-year profit margins fell into the abyss of crimson ink.

On the positive side, should Bluebird continue to perform well on the clinical front, BLUE could skyrocket quickly. Also, BLUE trades at a multiple to tangible book value of 1.23. In contrast, the sector median stat clocks in at a much higher 2.68X.

Rigel (RIGL)

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Another biotech firm, Rigel (NASDAQ:RIGL) is dedicated to discovering, developing, and providing novel therapies that significantly improve the lives of patients with hematologic disorders and cancer. Analysts that have covered Rigel over the past several months believe in its upside narrative. The most bullish expert is H.C. Wainwright’s Joseph Pantginis, who forecasted a $15 price target. That’s a gargantuan 1,081% return.

Of course, you want to be super-careful when dealing with stocks to buy for big returns in the biotech ecosystem. Aside from the volatility that can materialize in the clinical realm, Rigel suffers from questionable financial stats. For example, its Altman Z-Score sits at 14.37 below zero, again an extremely distressed reading.

However, on the positive side, the company’s three-year revenue growth rate of 25.3%, is above 71.11% of its peers. As well, BLUE trades at an enterprise value to forward revenue of 2.05x. In contrast, the sector median stat is 6.73X, making it an interesting idea for the top 3 high-return stocks.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.