Everyone has a company or two that they keep on their watchlists even though they’re long shots. Maybe it is our desire to root for the underdog or our dreams of bagging a multibagger, but these potential-laden companies catch the eye of many investors. If you aren’t averse to risk and don’t mind rolling the dice on a small chunk of change then this can be a fun way to spice up your portfolio. Who knows, if the company succeeds you could be sitting on a small windfall. Here are four long-shot stocks (don’t be offended if we don’t agree on their “long shot” status) to invest in.
KiOR Inc (NASDAQ:KIOR)
KiOR was the latest victim of the sustainable chemical IPO guillotine. The company converts wood chips into drop-in cellulosic gasoline and diesel, not ethanol or biodiesel. Its products are currently blended into the fuel supply, but that will change soon enough once it gains full certification status. After opening its first commercial-scale facility with 13 million gallons per year (MMgy) of capacity, KiOR Inc (NASDAQ:KIOR) is already looking forward to opening a second facility with three times the capacity in 2014.
The company currently produces fuel at a cost of $6 per gallon, but should it achieve the desired improvements to its production process, costs could plummet below $3 per gallon in 2015. The upgrade in efficiency would also increase fuel capacity by 64%, giving KiOR Inc (NASDAQ:KIOR) over 90 MMgy of cellulosic gasoline and diesel capacity. Throw in government credits for producing cellulosic fuels and the company could rake in profits of over $5 per gallon of fuel. That could be definitely be considered a longshot, although all news coming out of the company to date has been positive.
Kraton Performance Polymers Inc (NYSE:KRA)
Kraton Performance Polymers Inc (NYSE:KRA) offers a world of potential while leaving much to be desired. The company boasts a wide range of engineered polymers that enhance the performance of products from over 800 customers in dozens of industries. Those broad opportunities captured $1.42 billion in revenue last year, but the company’s operating profit fell considerably from 2011. That could all correct itself if one highly hyped product lives up to its potential.
Highly Modified Asphalt, or HiMA, is a new polymer technology for paving applications that could revolutionize transportation. After two years of extensive testing at the National Center for Asphalt Technology at Auburn University (yes, it really does exist) Kraton Performance Polymers Inc (NYSE:KRA)’s product had 67% less rutting than traditional asphalt despite being 18% thinner. This would require less material to fix roads, make roads last longer before needing repairs, save taxpayers money, and require the state of Pennsylvania to remove the orange construction cone from its state flag. The product just launched, but could find its way into a road near you soon.
Protalix BioTherapeutics Inc. (NYSEAMEX:PLX)
Protalix is a biopharmaceutical company that wields a novel production platform for the development of recombinant therapeutic proteins. The company’s ProCellEx plant-cell-based expression system deviates from more traditional cell lines involving mouse and human cells, but has proven effective in producing key pharmaceutical products at reduced costs. It has also landed Pfizer Inc. (NYSE:PFE) as a major development partner. Elelyso, Protalix BioTherapeutics Inc. (NYSEAMEX:PLX)’s first product, became the first FDA-approved plant-cell-based recombinant therapeutic protein. And there’s more potentially on the way.
The biotech pioneer has an intriguing early stage pipeline. That being said, sales of Elelyso have yet to blow anyone away just yet. Given the heated competition in biologic manufacturing, I could see Protalix BioTherapeutics Inc. (NYSEAMEX:PLX) and its ProCellEx expression platform having a big advantage over competitors. Investors would like to see more products hit the market, though — and that will take years. I hate speculating on buyouts, but this definitely fits the bill.