There is a huge range of adjectives that are used to define investors; conservative, aggressive, passive, active, balanced, high-risk, low-risk, income-focussed, growth-focussed or any combination of these. In 2015 however, I believe the only real distinction that needs to be made is how willing an investor is to risk their capital on traditional high or low risk stocks.
High Risk Stocks
Investors (and speculators) are attracted to high risk stocks because of their potential for massive returns. Just look at Liquefied Natural Gas Ltd (ASX: LNG); its share price rose from just 26 cents to $4.49 in the space of 12 months following a number of solid announcements. Three similarly high risk stocks for 2015 are:
Santos Ltd (ASX: STO) shares have been smashed as the oil price has plunged to consecutive five-year lows to start the year. Santos shares are again close to making new five-year lows after the oil price plunged to US$46 on Tuesday. The biggest risk remains a downgrade by ratings agency S&P or Fitch, which would likely result in a capital raising to avoid breaching their debt conditions.
Ensogo Ltd (ASX: E88) has to be one of the highest risk stocks on the market, but could also reward investors quickly if takeover rumours are correct. Shares have surged from 7 cents to a high of 17.5 cents last week but have fallen back to 13 cents this week. The company's flash deals websites throughout Asia are yet to be profitable, but like some Australian counterparts that may not stop a buyer paying a massive fee for the company.
Newsat Limited (ASX: NWT) – Australia's largest pure-play satellite communications company – needs to make 2015 a big one after disappointing delays to the launch of its flagship Jabiru-1 satellite. The launch, planned for early 2016, will be a company-maker, however a number of hurdles need to be overcome in 2015 for that to occur. Of principal concern appears to be funding of the satellite, while apparent slow demand for the satellite's capacity also hasn't helped. This great little company could be a source of massive shareholder returns if the launch is successful.
