Motley Fool Australia

Could these 3 speculative stocks make you rich?

Micro-cap stocks are the best way for investors to see massive returns over a short period of time. There are 17 companies listed on the ASX that have returned over 1,000%, or increased in value 10 times, in just the last 12 months. Of course the risk is that these companies can (and often do) end up being a dud even after such spectacular runs.

I’ve run my eye over the list of companies that have delivered gains of over 500% in the last 12 months and found three great examples of small, speculative companies that have already made investors rich, but could still rise further.

The leader, with a 1,700% return over 12 months, is Cynata Therapeutics Ltd (ASX: CYP). Cynata’s stem cell technology aims to mass produce synthetic Mesenchymal Stem Cells that are used for heart repair, to rebuild bone and cartilage, and reduce inflammation. The production process is being researched now and once complete might be a catalyst for another jump in the share price.

Running close second with a 1,500% return is investor favourite Liquefied Natural Gas Limited (ASX: LNG). LNG has a revolutionary gas technology and production licences that investors expect to support huge profits in the future.

Third, with a less impressive but still massive return of 550% is OBJ Limited (ASX: OBJ). OBJ has developed a method of increasing the penetration of cosmetics into the skin with the use of magnets. While that description sounds unimpressive, the company is working with giants of the healthcare industry to develop its products.

These massive returns are possible for everyday investors, however remember that speculative stocks should only comprise a small percentage of your portfolio. There’s another company worth investigating which is not so speculative, but The Motley Fool thinks it could be huge. This small-cap tech stock has had a good run but could go much further.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Andrew Mudie owns shares in OBJ. You can find Andrew on Twitter @andrewmudie

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