Every investor dreams of making millions from the markets. And that dream is realistic with a proper investment strategy and patience. By investment strategy, I mean the creation of a well-diversified portfolio. Exposure to blue-chip stocks is essential, but not the formula to make millions. It’s quality growth stocks and non-speculative penny stocks that can make millionaires by delivering multibagger returns.

The focus of this column is on penny stocks that represent companies with a good business model. A low stock price does not imply that the idea is purely speculative. On the contrary, I would hold these penny stocks for the next five years. Of course, it’s important to analyze business developments on a quarterly and annual basis.

I must add that I would not allocate more than 15% of your total portfolio towards these stocks. Given the multibagger returns potential, this allocation can create significant wealth without outsized risk.

Tilray Brands (TLRY)

If federal level legalization of cannabis were to happen today, Tilray Brands (NASDAQ:TLRY) could be a 10-bagger in the next few months. That’s the potential the cannabis stock holds and I believe that TLRY stock is deeply undervalued at current levels of $2.

Tilray recently reported Q1 2024 results and revenue growth was 15% on a year-on-year basis to $177 million. While Canada’s cannabis revenues grew by 16.5%, international cannabis revenue growth was robust at 37%.

Besides encouraging quarterly numbers, Tilray has established itself as the fifth largest U.S. craft beer brewer. The diversification is likely to support growth. Further, the Company has established a strong strategic infrastructure in the U.S. Tilray can leverage on this to make aggressive inroads in the cannabis market on potential legalization.

I must add that Tilray expects to generate positive adjusted free cash flow for the financial year. As financial metrics improve, TLRY stock is likely to trend higher from deeply oversold levels.

Curaleaf Holdings (CURLF)

Curaleaf Holdings (OTCMKTS:CURLF) is another cannabis penny stock with millionaire-making potential. In the last six months, CURLF stock has rallied by 67%. However, valuations still look attractive and I expect multibagger returns from current levels.

It’s worth noting that Curaleaf has established strong presence in the United States. Even without legalization at the federal level, the cannabis market in the U.S. is expected to be worth $71 billion by 2030. This provides ample headroom for growth in the coming years.

Besides the United States, Curaleaf is expanding its presence in Europe. According to the company, the potential addressable market in Europe is $248 billion for recreational and medicinal cannabis.

Another important point to note is that Curaleaf has high focus on research and development. Last year, it launched 171 new products. R&D will ensure that the product pipeline is healthy and it supports revenue growth.

Solid Power (SLDP)

Solid Power (NASDAQ:SLDP) stock has plunged by 61% in the last 12 months. I see this correction as a good opportunity to accumulate the stock. Assuming that Solid Power can commercialize solid-state batteries by 2026, the stock can deliver 10x or 20x returns from current levels of $1.80.

In the coming quarters, the biggest catalyst for the stock is the impending delivery of A-sample EV cells to automotive partners. Solid Power expects to deliver EV cells to BMW (OTCMKTS:BMWYY) for testing in their demo car program. If results are positive, it will be a big step towards commercialization.

It’s worth mentioning here that the SLDP has already licensed its cell design and technology to BMW for parallel research and development. With the backing of a strong automotive partner, Solid Power can potentially commercialize solid-state batteries.

The company ended Q2 2023 with cash and equivalents of $443 million. The cash buffer ensures that Solid Power is fully financed for the next 12 to 18 months.

Standard Lithium (SLI)

Lithium prices have corrected sharply in 2023 and has translated into downside for some of the best lithium stocks. However, considering the long-term demand potential for lithium, it’s the best time to accumulate quality stocks. Standard Lithium (NYSEAMERICAN:SLI) is among the best lithium penny stocks to buy right now.

Even with the plunge in lithium prices for year-to-date, SLI stock has trended higher by 5%. This is an indication of the extent that the stock has been undervalued. A big breakout rally is impending once lithium firms-up.

In terms of assets, the company’s Phase 1A Project and South West Arkansas Project have a combined net present value of $3.7 billion. Further, Standard Lithium is also pursuing expansion work in the East Texas Smackover region where high quality lithium brine has been confirmed.

I must add that Standard Lithium recently annouced a 45,000+ acre project at the Bristol Lake. This can be another potential game-changer in the coming years in terms of proved reserves addition.

Bitfarms (BITF)

Bitfarms (NASDAQ:BITF) stock had surged to highs of $2.20 in July. However, with the decline in Bitcoin (BTC-USD), the stock has corrected to current levels around $1. This seems like a good opportunity to accumulate as I am bullish on Bitcoin considering the impending halving in 2024.

Specific to Bitfarms, there are multiple reasons to be bullish. First, the company has a strong balance sheet. By February 2024, Bitfarms aims to be debt free and the current liquidity buffer stands at $65 million. Bitfarms therefore has high flexibility for aggressive expansion.

As a matter of fact, the company has already been boosting mining capacity. As of September, Bitfarms reported capacity of 6.1EH/s, which was higher by 45% on a year-on-year basis. The target is to achieve capacity of 7EH/s by March 2024. Once Bitcoin trends higher, Bitfarms will be well positioned to deliver strong revenue growth coupled with cash flow upside.

Kinross Gold (KGC)

I believe that gold is forming a strong base in the range of $1,800 to $2,000 an ounce. After consolidation, a big breakout is impending and the precious metal can potentially touch $2,500 an ounce. Factors of geopolitical tensions and the potential lowering of interest rates in 2024 could be strong catalysts for gold price upside.

Kinross Gold (NYSE:KGC) is among the massively undervalued gold miners that’s positioned for a big rally. KGC stock trades at a forward price-to-earnings ratio of 12 and offers a dividend yield of 2.5%. In a scenario where gold surges to $2,500 an ounce, I would expect at least 5x returns from KGC stock.

It’s worth noting that Kinross has an investment grade balance sheet. As of Q2 2023, the Company reported a cash buffer of $1.9 billion. Further, even at current gold price, the annual operating cash flow visibility is in the range of $1.6 to $2 billion.

With high financial flexibility, Kinross is positioned for acquisition driven growth. The company had to sell Russian assets in 2022 due to geopolitical factors. That’s likely to be compensated with some asset acquisitions to boost production growth.

Aker Carbon Capture (AKCCF)

Aker Carbon Capture (OTCMKTS:AKCCF) is an interesting name among penny stocks. Currently, AKCCF trades at 90cents and I would not be surprised if the stock delivers 10x or 15x returns in the next five years.

As an overview, Aker is a provider of product, services, and solutions in the carbon capture technology business. Among the positives, the AKCCF’s revenue has been in an uptrend on a quarter-on-quarter basis. While EBITDA remains negative, it’s not a concern with the Company investing in R&D, sales, and tendering activity.

Aker Carbon is targeting to secure contracts to capture 10 million tonnes of CO2 per annum by 2025. With growing presence in Europe and with the first study conducted in North America, the addressable market is significant. I expect Aker to continue delivering healthy revenue growth backed by a healthy order backlog of 3.3 billion Norwegian kroner (approximately $300 million USD).

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.

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