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2 Beaten Down Stocks With 10X Potential

In a recent episode of The Rank on Fool Live, recorded on Aug. 23, longtime Fool.com contributors Matt Frankel, CFP, and Jason Hall ranked six beaten-down stocks to try to find the best bargain opportunities in the market. Of the six companies -- Outset Medical (NASDAQ: OM), Pinterest (NYSE: PINS), Zoom Video Communications (NASDAQ: ZM), Seritage Growth Properties (NYSE: SRG), SoFi Technologies (NASDAQ: SOFI), and Appian (NASDAQ: APPN) -- here are the ones these experts think have the best chance of producing 10X returns over the next five years or so.

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Matt Frankel: Which of these stocks, and I'll let you go first on this one, which do you think is most likely to 10X in value? I'll give you a timeframe, I'll say five years.

Jason Hall: Probably Outset Medical. I just think because it's starting from such a low base, it already has a product that looks like it's disruptive. It has a really clear economic case and the trends are in its favor. I'm going to say Outset Medical.

Frankel: I would say that with the exception of maybe Zoom, all of these could 10X in five years. I think with Zoom, that would be a heavy lift.

Hall: Yeah.

Frankel: We don't invest in stocks because we think they're going to 10X in five years. That's an ultra aggressive target. But if I were to name one of these that was most likely to 10X in five years, I would have to say SoFi. I would say that if they are successful, remember, SoFi just got a windfall of cash to build out their business. They are doing the same things that a lot of other FinTech disruptors are doing and they're doing it better. I mentioned Robinhood (NASDAQ: HOOD). What's Robinhood's valuation right now is something like $40 billion? SoFi is a small fraction of that.

Hall: Probably and more diversified and one could argue maybe a better business because of that diversification.

Frankel: Right, already almost profitable. A big, loyal user base, people who use SoFi's products, whether it's a personal loan, whether it's their bank account, whether it's their brokerage platform, they love it. The customer engagement is fantastic. Before COVID they actually had member meet-ups in a lot of cities around the country. They really tried to build a community, which is one thing I love about the business. But like I said, I think all of these could 10X other than maybe Zoom, I own four out of them. I own Appian, Pinterest, SoFi, and Seritage. I think all four of those could 10X within the next five years potentially. I'd be very happy if they did.

Jason Hall: I own them all, but SoFi. I would also be happy.

Jason Hall owns shares of Appian, Outset Medical, Inc., Pinterest, Seritage Growth Properties (Class A), SoFi Technologies, Inc., and Zoom Video Communications. Matthew Frankel, CFP owns shares of Appian, Pinterest, Seritage Growth Properties (Class A), and SoFi Technologies, Inc. The Motley Fool owns shares of and recommends Appian, Outset Medical, Inc., Pinterest, Seritage Growth Properties (Class A), SoFi Technologies, Inc., and Zoom Video Communications. The Motley Fool has a disclosure policy.


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