It’s unlikely that investors can always make money in the markets. During bull markets, the focus should be on maximizing returns by taking relatively higher risks. During bear markets, the objective should be to minimize the drawdown by remaining invested in low-beta stocks. Currently, the markets are in a phase where money-making is relatively easy.
Investors can use various strategies to maximize portfolio returns. One method that has gained significant popularity after the meme euphoria is exposure to short-squeeze stocks, which offer quick returns at the blink of an eye. These stocks have high short interest, and a trend reversal can trigger a massive short-covering rally.
There are some short-squeeze stocks that have the potential to double your investment by the end of the year. In my view, these stocks are undervalued with positive impending catalysts. Let’s discuss the company- or industry-specific reason for being bullish.
Riot Platforms (RIOT)
As the markets talk about the possible revival of Trumponomics, Bitcoin (BTC-USD) is back to $67,000. With likely rate cuts in the coming quarters, it’s likely that the cryptocurrency will surge to new highs.
One way to benefit is through exposure to Bitcoin miners. Riot Platforms (NASDAQ:RIOT) looks attractive. With a short interest of 21%, a massive short-squeeze rally from oversold levels is on the cards. The meme stock mania will likely support a quick double before the end of the year.
From a fundamental perspective, Riot has a strong balance sheet with zero debt. Further, a cash buffer of $1.3 billion (including digital assets) can support aggressive investment plans.
The company expects to increase its deployed hash rate from 12.4 EH/s in the first quarter to 31.5EH/s by the end of the year. While Bitcoin halving is likely to have an impact on margins, the negative impact will be minimized or completely offset if Bitcoin continues to surge higher.
Blink Charging (BLNK)
Blink Charging (NASDAQ:BLNK) is down 10% so far this year. I expect a big breakout rally on the back of positive business developments. With a short interest of almost 20%, the short squeeze can accelerate the upside momentum.
A major concern for emerging EV charging infrastructure companies has been operating-level losses. Blink has guided to achieve positive adjusted EBITDA by December, which is a strong reason for BLNK stock to go ballistic.
Additionally, the company has a big addressable market in North America and Europe. This will ensure that healthy top-line growth is sustained, and as services revenue swells, I expect margin improvement in the next few years.
In a recent development, Blink received “in process” designation from the Federal Risk and Authorization Management Program for its EV charging solutions. This takes the company closer to providing cloud-based EV charging solutions to the U.S. government.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) has surged by 26% in the last month. However, on a 12-month basis, ACHR stock is up only 2%, underperforming the market. Therefore, I expect a bigger rally in the coming months. It’s also among the attractive short-squeeze stocks with a current short interest of 17%.
In terms of business positives, Archer is on track to commercialize eVTOL next year. Recently, the company received additional funding of $55 million from Stellantis (NYSE:STLA) on completion of the flight test milestone. United Airlines (NASDAQ:UAL) is also an investor and strategic partner in the eVTOL company.
In another development, Archer signed an agreement with Southwest Airlines (NYSE:LUV) to “develop operational plans for electric air taxi networks utilizing Archer’s eVTOL aircraft at California airports.” The company has international partners for entry into the UAE, India, and Korea in the next 24 months. With these positive developments, ACHR stock will likely surge higher as it nears commercialization.
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 held a LONG position in BTC-USD.