3 stocks I believe could double your money

These stocks have already doubled investors’ money. It looks as if they have the potential to do so again.

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Investing would be a lot simpler if it was easy to pick the stocks with potential to double or triple in price. Unfortunately, there is no way of telling which shares will be tomorrow’s winners. 

However, I’ve stumbled across three stocks which I believe have the potential to generate tremendous returns for investors. They might not double in value, but I think these are some of the market’s best growth stocks.

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Beating the market

One of the qualities I look for when assessing the future potential of any business is how it has performed in the past.

Since the end of the first quarter of 2016, shares in Harwood Wealth Management (LSE: HW) have returned 82% excluding dividends, compared to just 23% for the FTSE 250.

The last time I covered the company, it had just reported its numbers for the six months to the end of April, which showed an increase in assets under management (AUM) of around of a third. Following this update, analysts have reiterated their full-year growth forecasts. The City is expecting EPS growth of 463% for 2018 (giving a full-year P/E of 23.9) and 27% for 2019 (forward P/E of 18.8). If AUM continue to expand, I believe Harwood could surpass City growth targets for 2019. 

With approximately 24p per share in cash on the balance sheet, the stock is trading at a cash-adjusted 2019 P/E of just 16. In my opinion, this is far too cheap for for the wealth management group.

One of a kind 

My next stock with multi-bagger potential is Breedon (LSE: BREE). What I like about this business is that it already has a strong track record of creating value for investors. Over the past five years, through a combination of acquisitions and operational improvements, net profit has grown at a compound annual rate of 61%. This expansion has helped the company’s shares add 170% since mid-2013.

Breedon owns and operates over 300 quarries and concrete plants throughout the UK and Ireland. These assets have high barriers to entry — it’s not easy to start a new quarry in the UK. Breedon, therefore, has a virtual monopoly in some areas of the market.

With monopoly control of some parts of the UK aggregate market, Breedon should be able to continue to grow at a rapid pace for many years to come. With this being the case, I believe it is worth paying the current multiple of 15.8 times forward earnings for the shares.

Rising output 

My final potential blockbuster is Kaz Minerals (LSE: KAZ). Last week, after several years of restructuring the business, it declared its first dividend since 2012. This announcement has helped restore confidence among investors who have been questioning the group’s decision to pay $900m to acquire a Russian copper project from Roman Abramovich. 

Despite shareholder opposition, management believes this deal has legs and is a vital part of the group’s long term growth strategy. I’m inclined to side with management on this one. Over the past five years, executives have proven they know how to handle the business. After investing $3.5bn in two major copper mines, Bozshakol and Aktogay in Kazakhstan, production in 2016 leapt 73% to 140,000 tonnes and is projected to hit 300,000 tonnes for 2018. 

For the full year, analysts have pencilled in EPS of $1.40 giving a P/E of 5. In my opinion, the stock is worth significantly more. 

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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