The meme stock rally of 2021 will go down in the books of financial history as one of the craziest periods of euphoria. The big meme stock rally was followed by an extended period of correction for speculative stocks. With some notable meme stocks skyrocketing in the recent past, it seems that the meme season is back. It’s, therefore, a good time to look at meme stocks to buy that have remained relatively depressed.
An important catalyst is likely to back the meme stock frenzy. Potential rate cuts are impending in the second half of the year. It’s worth noting that tight monetary policies impacted the big rally in meme and growth stocks. With the possibility of expansionary policies in the coming months, speculative activity is likely to increase.
So, let’s talk about three meme stocks to buy that can deliver 2x or 3x returns within the next six months.
Riot Platforms (RIOT)
It’s worth noting that Bitcoin (BTC-USD) is back to $70,000 levels. With growing optimism related to Ethereum (ETH-USD) ETF approval, the rally in cryptocurrencies will likely sustain. Potential rate cuts in the second half of 2024 will also support upside in crypto assets. It’s, therefore, a good time to consider exposure to undervalued Bitcoin miners. Riot Platforms (NASDAQ:RIOT) is my top pick, with the stock trading at a forward P/E of 22.
While I am talking about meme stocks, RIOT represents a company with strong fundamentals. As of Q1 2024, the company reported a cash buffer (including Bitcoin holdings) of $1.3 billion. Further, with a zero-debt balance sheet, the company is positioned to make aggressive investments.
It’s also worth noting that as of Q1 2024, Riot reported a hash rate capacity of 12.4 EH/s. By the end of the year, the company is targeting a capacity of 31.5 EH/s. The big jump in capacity is likely to translate into stellar revenue and EBITDA growth. That factor will likely be discounted in the stock in the coming quarters.
Cronos Group (CRON)
With the presidential elections due later this year, it’s a good idea to hold some cannabis stocks for multibagger returns. The legalization of cannabis at the federal level will likely be a hot topic of discussion, and there will be price-action in some of the best cannabis picks.
Cronos Group (NASDAQ:CRON) looks attractive at current levels of $2.79. If cannabis is reclassified as a Schedule III drug and federal-level legalization is a key agenda after elections, I expect CRON stock to trade in double digits.
However, even if we leave these factors aside, Cronos is worth considering. The company ended Q1 2024 with a robust cash buffer of $855 million. This provides Cronos with high flexibility to pursue organic and acquisition-driven growth.
It’s worth noting that in the recent past, the company has entered new geographies of Germany, Australia and the United Kingdom. This will likely support accelerated revenue growth in the coming quarters. Further, I expect sustained improvement in EBITDA on the back of cost-cutting and operating leverage.
Blink Charging (BLNK)
Blink Charging (NASDAQ:BLNK) stock has witnessed a sharp correction of 55% in the last 12 months. Considering the business developments, BLNK stock looks oversold and is poised for a big rally. I would not be surprised if the stock doubles from current levels by the end of the year.
For Q1 2024, Blink Charging reported healthy revenue growth of 73% on a year-on-year basis to $37.6 million. Further, the company guided for a gross margin of 33% for the full year and positive adjusted EBITDA by December 2024. This is a key catalyst for BLNK stock upside in the coming quarters.
It’s also worth noting that Blink has 77% of chargers deployed in North America. The expansion in the European markets is still at an early stage. That will ensure healthy top-line growth.
At the same time, as the number of EV charging stations deployed increases, service revenue will swell. This will support EBITDA margin expansion beyond 2024. Therefore, with growth and margin expansion catalysts, I am bullish on a big rally for BLNK stock from oversold levels.
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.