10 Best High-Risk High-Reward Stocks To Buy Now

In this article, we discuss the 10 best high-risk high-reward stocks to buy now. If you want to skip our discussion, you can go directly to the 5 Best High-Risk High-Reward Stocks to Buy Now.

The year 2022 has been unkind toward hypergrowth investments. According to Ethan Harris, head of global economics research at Bank of America Corp, “we’re just on the edge of a global recession.” With interest rates soaring and risk appetites disappearing, many former high fliers have crashed and burned this year. But while financial conditions have tightened, there’s no shortage of ongoing innovation that can lead to strong investor returns. Given enough time, many investments have the potential to double the initial principal amount, but many investors are instead attracted to the lure of high yields in short periods of time despite the possibility of unattractive returns over the long-term. Although growth stocks offer a higher growth rate when compared to the mean growth rate prevailing in the market, high-risk, high-reward growth stocks that can provide investors with substantially stronger returns. With that said, they also come with less certainty of future returns.

At the same time, the meme-trading phenomenon proved more than a year ago that sometimes moving against the grain can catch even the most seasoned investors off guard. Therefore, diving into some of the high-risk, high-reward growth stocks to buy can generate some tremendous upside. Some growth stocks that can provide significant returns due to their growth catalysts, both for the short-term and the long-term, include Neogen Corporation (NASDAQ:NEOG), UiPath Inc. (NYSE:PATH), and C3.ai, Inc. (NYSE:AI), among others discussed below. Please keep in mind that these stocks may still experience very sharp losses in the short-term. Amazon lost more than 90% of its value at one point during the 2000-2002 market crash and it was possible to buy a single Amazon share for less than $1 (split-adjusted price) at that time.

Source: pexels

Our Methodology

Here is our list of the 10 best high-risk high-reward stocks to buy now. These companies were selected based on the products or services they offer. On their present fundamentals, they could grow or fail, but investors should consider them because of the potential they offer in the long term. Data from more than 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

10 Best High-Risk High-Reward Stocks To Buy Now

10. SNDL Inc. (NASDAQ:SNDL)

Number of Hedge Fund Holders: 1

SNDL Inc. (NASDAQ:SNDL), also known as Sundial Growers, engages in growing, distributing and selling cannabis for adult-use and medical markets in Canada. Headquartered in Calgary, Canada, the company has three business segments: cannabis cultivation and production as well as cannabis retail stores – together are under Cannabis Operations – and investment operations. Earlier this year, the pot titan completed its acquisition of one the largest private-sector retailers of alcohol in North America, resulting in a 2,344% increase in net revenue in Q2.

On December 21, SNDL Inc. (NASDAQ:SNDL) and Nova Cannabis announced that they have entered into an agreement creating a well-capitalized cannabis retail platform in Canada under a vertical integration model with SNDL’s upstream capabilities. According to the agreement, SNDL will vend into Nova’s cannabis retail business its existing 26 cannabis retail stores under the Spiritleaf and Superette banners located in Ontario and Alberta.

Just a single hedge fund was long SNDL Inc. (NASDAQ:SNDL) on September 30 among the select group of top funds that are tracked by Insider Monkey’s database, down from ten funds in the middle of 2021. That lone fund was Israel Englander’s Millennium Management, which has held a stake in the company since Q3 2020 and which owned 113,828 shares at the end of Q3 2022.

Similar to Neogen Corporation (NASDAQ:NEOG), UiPath Inc. (NYSE:PATH), and C3.ai, Inc. (NYSE:AI), SNDL Inc. (NASDAQ:SNDL) is a high-risk, high-reward stock that aggressive investors can look into.

9. Bionano Genomics, Inc. (NASDAQ:BNGO) 

Number of Hedge Fund Holders: 7

Bionano Genomics, Inc. (NASDAQ:BNGO) provides a platform to analyze the long segments of genomic DNA and other biomolecules structural variations. The company offers proprietary nanochannel chips, automated imaging instrument, integrated primary and secondary software, and application specific reagents. The company’s life science research business has been growing at a steady clip in recent quarters, with sales jumping by a healthy 55% in Q3 relative to the same period a year ago. Wall Street estimates that the company’s annual sales will rise by a staggering 72.5% in the upcoming year.

Earlier this October, Bionano Genomics, Inc. (NASDAQ:BNGO) and Hamilton announced that the Long String VANTAGE, a system for automated, high throughput isolation of ultra high molecular weight DNA for use in optical genome mapping is commercially available. The Long String VANTAGE is the result of collaborative development from the companies and features new, innovative tools and consumables used for consistent, high-quality UHMW DNA extraction using human blood samples. The Long String VANTAGE is expected to begin shipping in Q1 2023.

On December 12, BTIG analyst Mark Massaro assumed coverage of Bionano Genomics, Inc. (NASDAQ:BNGO) with a Buy rating and $3.50 price target. According to the analyst, the company is well on its way to transform the way the world sees the genome through optical genome mapping, and believes that Bionano offers an elegant solution to accurately identify structural variation, SV, and changes in chromosomes.

By the end of the third quarter, Bionano Genomics, Inc. (NASDAQ:BNGO) was part of 7 hedge fund portfolios. The consolidated stakes these funds had in the company were worth $5.5 million, down from $7.9 million the prior quarter.

8. Spire Global, Inc. (NYSE:SPIR)

Number of Hedge Fund Holders: 10

Spire Global, Inc. (NYSE:SPIR) is a space-to-cloud data and analytics company that specializes in the tracking of global data sets powered by a large constellation of nanosatellites, such as the tracking of maritime, aviation and weather patterns.

Earlier this October, Credit Suisse analyst Scott Deuschle initiated coverage of Spire Global, Inc. (NYSE:SPIR) with a Neutral rating and $2 price target. The analyst describes Spire as a global provider of space-based data and analytics. Furthermore, he appreciates the company’s growth potential and “strong “unit economics of its core offerings.

On November 9, Spire Global Inc. (NYSE:SPIR) posted earnings for the third quarter of 2022, reporting an EPS of $0.16, which fell short of market estimates by $0.06. The revenue over the period however, was $20.4 million, up 113.4% compared to the revenue over the same period last year and surpassing market estimates by $0.51 million.

At the end of the third quarter of 2022, 10 hedge funds in the database of Insider Monkey held stakes worth $2.2 million in Spire Global, Inc. (NYSE:SPIR), compared to 9 in the previous quarter worth $2.8 million.

7. Sorrento Therapeutics, Inc. (NASDAQ:SRNE)

Number of Hedge Fund Holders: 10

The epitome of a high-risk, high-reward stock, Sorrento Therapeutics, Inc. (NASDAQ:SRNE) is a biopharmaceutical company that researches human therapeutic antibodies for the treatment of cancer, inflammation, metabolic, and infectious diseases. The company’s most valuable product candidate is arguably its third-generation tyrosine kinase inhibitor, abivertinib. This drug is presently in late-stage development for advanced non-small cell lung cancer, and in mid-stage development for metastatic castrate-resistant prostate cancer.

Earlier this November, Cantor Fitzgerald analyst Brandon Folkes initiated coverage of Sorrento Therapeutics, Inc. (NASDAQ:SRNE) with an Overweight rating and $5 price target. According to Folkes, Sorrento has the potential to deliver multiple best-in-class products in high-value areas of oncology, pain and infectious disease. He believes the breadth of the company’s product pipeline has driven a valuation discount, which provides an attractive risk/reward.

D E Shaw owned roughly $7.9 million worth of stakes in Sorrento Therapeutics, Inc. (NASDAQ:SRNE), becoming the company’s leading stakeholder in Q3 2022. Overall, 10 hedge funds tracked by Insider Monkey owned stakes in the company in Q3, growing from 6 in the previous quarter. These stakes hold a combined value of over $13.9 million.

6. Tilray Brands, Inc. (NASDAQ:TLRY)

Number of Hedge Fund Holders: 16

Tilray Brands, Inc. (NASDAQ:TLRY) is an American pharmaceutical, cannabis-lifestyle and consumer packaged goods company, incorporated in the United States, headquartered in New York City. According to Morningstar’s equity strategist Kristoffer Inton, Tilray’s stock could rip higher by a noteworthy 219% over the next 12 months. Armed with these insights, Tilray Brands, Inc. (NASDAQ:TLRY) might be a worthwhile speculative buy for ultra-aggressive investors.

At the beginning of November, Bernstein analyst Nadine Sarwat initiated coverage of Tilray Brands, Inc. (NASDAQ:TLRY) with a Market Perform rating and $3.90 price target. The analyst believes that Tilray’s cannabis business has “best-in-class” gross margins and should be free cash flow positive this fiscal year. However, he also states that Tilray, just like other licensed producers, has suffered from meaningful share loss in Canadian cannabis. Sarwat states that she would be more constructive if Tilray regains meaningful share in Canada and/or Germany legalizes recreational cannabis.

According to Insider Monkey’s data, 16 hedge funds were bullish on Tilray Brands, Inc. (NASDAQ:TLRY) at the end of Q3 2022, compared to 14 funds in the last quarter. D E Shaw is a prominent stakeholder of the company, with 3.4 million shares worth $9.3 million.

Tilray Brands, Inc. (NASDAQ:TLRY) ranks among the likes of Neogen Corporation (NASDAQ:NEOG), UiPath Inc. (NYSE:PATH), and C3.ai, Inc. (NYSE:AI) as high-risk, high-reward stocks to buy now.