Stocks to buy

If you want to retire a millionaire, invest early in millionaire-maker stocks. Easier said than done, right? If there was a reliable formula for pinpointing which stocks would return 100 to 1,000 times your money, we’d all be rich. Unfortunately, that “holy grail” doesn’t exist. But we can help point you in the direction of stocks that could eventually be your next millionaire-maker stocks. In fact, here are seven you may want to consider.

RIOT Riot Platforms $5.64
LAC Lithium Americas $25.75
SLDP Solid Power $3.36
DETNF Aker BP $29.66
PSNY Polestar Automotive $5.73
PINS Pinterest $24.78
RIG Transocean $7.34

Riot Platforms (RIOT)

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There finally seems to be some revival among cryptocurrencies. If recovery sustains, there are potential multibagger crypto stocks to buy. Riot Platforms (NASDAQ:RIOT) looks undervalued at current levels of $5.51.

The Bitcoin (BTC-USD) mining company looks attractive for several reasons. As of Jan. 2023, Riot reported production of 740 Bitcoin. On a year-on-year basis, production increased by 62%. Further, Riot reported a hashing capacity of 9.3EH/s. The company expects to boost capacity to 12.5EH/s in the first half of the year. With sustained growth in capacity, digital assets in the company’s balance sheet will swell.

It’s also worth noting that for the first nine months of 2022, Riot reported gross margin of 65.4%. With Bitcoin gradually trending higher, the low-cost miner is positioned to benefit. Assuming a bullish outlook for cryptocurrencies, Riot is positioned to deliver healthy cash flows. With zero debt and $255 million in cash, Riot is also positioned to invest aggressively in the next leg of expansion.

Lithium Americas (LAC)

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With expectation of acute shortage of lithium in the coming decade, the metal is an attractive investment theme. Lithium companies are positioned to benefit from higher demand and better price realization. Lithium Americas (NYSE:LAC) is among the best millionaire-maker stocks to buy. At a current market valuation of $3.5 billion, the stock looks significantly undervalued. To put things into perspective, the company’s Thacker Pass project in the U.S. has an after tax-net present value of $4.95 billion.

Recently, the company signed an agreement with General Motors (NYSE:GM) for joint development of the U.S. asset. The latter will be infusing $650 million in equity in the company. Funding commercialization of the project is unlikely to be a challenge.

Lithium Americas also has assets in Argentina. The company has decided to split international assets into a separate entity (Lithium International). This is likely to result in value unlocking and will make project financing easier. Once the assets are commercialized, Lithium Americas will be a cash flow machine.

Solid Power (SLDP)

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Solid-state batteries are being considered as the batteries of the future for electric vehicles. Of course, these batteries are still under development, but it’s the right time to pick potential winners for multibagger returns.

Solid Power (NASDAQ:SLDP) is among the attractive players to consider. With several positive developments in the recent past, SLDP stock has been trending higher. I expect this momentum to sustain. In Jan. 2023, Solid Power was awarded $5.6 million from the U.S. Department of Energy for the development of solid-state cells. The government funding underscores the importance of solid-state cell development.

In December 2022, Solid Power announced that it has licensed the design and manufacturing process to BMW (OTCMKTS:BMWYY). This will allow parallel research and development activity and can potentially accelerate the commercialization. Solid Power reported cash and equivalents of $507.6 million as of Q3 2022. With the backing of BMW and Ford (NYSE:F), funding growth is unlikely to be a challenge.

Aker BP (DETNF)

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Aker BP (OTCMKTS:DETNF) is a hidden gem from the oil and gas sector. DETNF stock has multibagger returns potential and offers an attractive dividend yield of 7.1%.As an overview, Aker BP is focused on the Norwegian Continental Shelf. The company has low break-even oil assets with production upside visibility. Even with some correction in oil price, Aker BP will remain a cash flow machine.

To put things into perspective, Aker BP reported revenue and EBITDA of $4.9 billion and $4.5 billion for Q3 2022. Clearly, EBITDA margin is robust and Aker BP reported free cash flow of $1.9 billion for the same period. With robust financial flexibility, the company can aggressively invest in exploration projects. At the same time, dividend growth is likely to remain attractive. For the current year, Aker BP has production upside visibility as Johan Sverdrup (Phase 2) becomes operational. Therefore, free cash flows are likely to swell further.

Polestar Automotive (PSNY)

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Among early stage electric vehicle stocks, Polestar Automotive (NASDAQ:PSNY) looks attractive. PSNY stock seems poised for multibagger returns from current levels of $5.62. The company’s delivery growth has been robust through 2022 with global volumes of 51,500 cars. On a year-on-year basis, deliveries surged by 80%. Polestar has a bright outlook for 2023 with a guidance to deliver 80,000 cars. As deliveries remain robust, PSNY stock is likely to trend higher.

There is a strong reason to believe that deliveries growth will remain healthy in the coming years. For 2023, the first delivery of Polestar 3 will act as a growth catalyst. The company has plans to launch delivery of Polestar 4 in 2024. One concern is widening EBITDA level loss. However, with operating leverage, it’s likely that margins will improve. Currently, Polestar has sufficient funds through 2023. For a growth company, I don’t see cash burn as a concern.

Pinterest (PINS)

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Pinterest (NYSE:PINS) stock has been sideways in the last 12 months. This seems like a strong consolidation zone and a breakout on the upside is imminent. PINS stock is among the best millionaire-maker stocks at a forward price-earnings ratio of 34.25.

I believe that the worst is over for Pinterest in terms of active user decline from the peak. As a matter of fact, the company’s MAU increase in Q4 2022 on a quarter-on-quarter basis. Also, I am of the view that the company’s average revenue per user will continue to improve in the coming years. Pinterest is likely to be a cash flow machine as the ARPU swells. One reason to be bullish is the fact that Pinterest is transforming into a shopping friendly platform. As SKUs swell and advertising increases, the ARPU will improve. Furthermore, the ARPU from emerging markets is significantly lower as compared to the U.S. and Europe.

Pinterest has also been heavily investing in research and development. For Q4 2022, the R&D expense was 19% of sales. With continued platform development, user engagement is likely to remain high.

Transocean (RIG)

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Transocean (NYSE:RIG) stock has surged by almost 120% in the last 12 months. However, the rally from oversold levels is likely to sustain on positive business developments. As an overview, Transocean is a provider of modern ultra-deep-water rigs. With oil sustaining around $80 per barrel, offshore drilling activity has remained strong. Transocean is well positioned to benefit and the company’s order backlog has been increasing.

As of January 2023, Transocean reported an order backlog of $8.3 billion. The backlog is front-end loaded and provides clear cash flow visibility. Another point to note is that new orders have come at a higher day-rate. This positions Transocean for EBITDA margin expansion in 2023.

With an industry leading backlog, Transocean is also positioned to deleverage. As credit metrics improve, the stock rally is likely to sustain. I also believe that Transocean will add new rigs if industry conditions remain favorable. This is a potential growth catalyst beyond 2023.

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.

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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