I strongly believe that investors need to have a dynamic approach when it comes to the world of modern investing. For sure, long-term investment delivers the best results. However, it makes sense to capitalize on all good opportunities. Be it the meme frenzy, penny stock investing or considering exposure to short-term profit stocks.
I personally like the idea of allocating 15% to 20% of my portfolio towards short-term profit taking. First, it becomes a source of some cash inflow on a regular basis. Further, it makes sense to capitalize on euphoria or trading opportunities and reallocate profits to long term ideas.
The focus of this column is on three short-term profit stocks to buy for 30% to 50% returns within the next three months. I would like to emphasize that the ideas discussed are not speculative bets. Instead, these are fundamentally strong ideas where stocks have been relatively subdued. Further, there are near-term catalysts that can spark a significant rally.
Let’s talk about the catalysts to be bullish on these trading ideas.
MINISO Group (MNSO)
Even wit stellar quarterly numbers, Miniso Group (NYSE:MNSO) stock has remained sideways year-to-date. At a forward P/E of 15.3, the lifestyle retailer looks attractive and is poised for a strong breakout. In my view, the stock is likely to rally by 30% to 50% in the next three months.
An important point to note is that Miniso reported stellar Q1 numbers even amidst macroeconomic headwinds. Revenue and EBITDA increased by 26% and 36.7% on a year-on-year basis. Further, the company is undertaking aggressive expansion plans and targets to open 900 to 1,100 new stores annually through 2028.
For Q2, it’s likely that growth will remain attractive coupled with EBITDA margin expansion. I therefore expect a pre-result rally that’s likely to sustain on the back of undervaluation. Of course, Miniso is also a good business to consider with a long-term horizon. For now, traders can look at making some quick gains.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) is possibly the most undervalued Bitcoin (BTC-USD) mining stock to buy. After a correction off 40% year-to-date, RIOT stock trades at a forward P/E of 14.9.
I believe that there are two catalysts that can take RIOT stocks higher by 50% in the next few months. First, Bitcoin has witnessed some correction. However, with rate cuts likely, I expect new highs for the digital asset. That’s one reason to be bullish on Riot.
Further, Riot Platforms has big growth plans. If the execution is right, the stock is likely to rally. For Q1 2024, Riot reported a hash rate capacity of 12.4EH/s. The company ended Q2 with a capacity of 22EH/s. Riot seems to be on target to achieve or possibly exceed the year-end capacity of 31.5EH/s. With Q2 results on the cards, I expect a rally on the back of healthy revenue and EBITDA growth.
Archer Aviation (ACHR)
I maintain my view that flying car stocks will be among the hottest names in the coming months. Archer Aviation (NYSE:ACHR) is a quality name to consider and ACHR stock has rallied by 33% in the last one month.
This might just be the beginning of a sustained rally. I must add here that the short interest in ACHR stock is still at 17% of the free-float. A short-squeeze rally seems likely on the back of the meme stock frenzy. This can translate into a 50% rally from current levels.
Specific to the business, Archer is on-track to commercialize eVTOL in the U.S. next year. At the same time, the company is constructing its manufacturing facility to scale-up production. With partnerships in the UAE, India and Korea, the company is positioned for robust growth and value creation.
For now, the focus is likely to be on the commercialization plans for next year. With the company having received its Part 135 Air Carrier & Operator Certificate from the U.S. Federal Aviation Authority, the stock will remain positive.
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.