Many investors abandon highly promising shares with little chance of failing. The phenomenon has been exacerbated by overdone fears about elevated interest rates. Short sellers often believe that elevated rates will crush indebted, money-losing firms, regardless of their potential. These short sellers put huge downward pressure on small companies that are still in the red and have some debt. As their stock prices sink, many other investors also avoid buying their shares. As a result, the stocks keep continuously falling, especially if the Russell 2000 drops, further emboldening the short sellers and inhibiting potential buyers. Sometimes these names do wind up plunging by more than 99%, never coming back to their previous highs. But some such firms do make huge comebacks. One such case is online auto dealer Carvana (NYSE:CVNA) which has soared an incredible 917% over the past 12 months. Here are three other contrarian investments that look poised to follow in Carvana’s footsteps.

Bionano (BNGO) Bionano Genomics (BNGO) company logo on a website with blurry stock market developments in the background

Source: Dennis Diatel / Shutterstock.com

Bionano (NASDAQ:BNGO) created a method of DNA analysis called optical genome mapping (OGM). Last November, CEO Erik Holmlin explained that OGM is roughly 20% more accurate than standard DNA analysis tools, known as karyotyping. It enables 20% of leukemia patients, for example, to get more suitable treatments. OGM is also reportedly easier to use than karyotyping.

Some have suggested that an alternate technique, called sequencing, will replace karyotyping. However, sequencing analyzes a maximum of 10,000 base pairs of DNA, while OGM can analyze as many as 100,000 base pairs. OGM is also 20% more accurate than sequencing as a result.

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Many very prestigious hospitals, including Houston’s MD Anderson and Children’s Hospital Los Angeles, utilize OGM. What’s more, pharma companies are utilizing OGM to evaluate cells used in gene therapies. In November, Holmlin noted that usage by pharma firms had jumped 100% year-over-year.

Within the next two months, BNGO stock may benefit from a huge, game-changing catalyst. The American Medical Association (AMA) is slated to consider whether to approve OGM for use in cytogenomic chromosomal abnormalities in its meeting next month. Since Medicare determines its reimbursement policies for lab tests based on AMA’s approvals, the use of BNGO’s products is likely to soar if the AMA votes in favor of OGM.

Holmlin said that news about the AMA’s decision could surface near Q2’s end.

SolarEdge (SEDG) the solar edge logo on an iPhone. SEDG stock

Source: rafapress / Shutterstock.com



A combination of high interest rates in the U.S., elevated inventories of SolarEdge’s (NASDAQ:SEDG) solar inverters in Europe, and regulatory changes in California have caused SolarEdge’s financial results to plummet in the last few quarters.

But U.S. interest rates are still expected to drop over the long term, while European inventories will eventually be depleted, and SEDG expects “gradual” improvement in the California market.

SEDG has said that it expects its EPS to bounce back to $3 in a more “normalized” environment. Analysts are even more upbeat, as their average estimate calls for the company’s 2025 earnings per share to come in at $4.21. That means that the shares are currently changing hands at a very low forward price-earnings ratio of 13.3 times.

What’s more, many analysts expect the solar sector to get a boost from increased electricity consumption in the U.S.

SEDG’s low valuation and high growth potential make it one of the best contrarian stocks available.

Xpeng (XPEV) Xpeng (XPEV) car logo in Shanghai International Automobile Industry Exhibition. EV stocks to Buy

Source: THINK A / Shutterstock.com

Last month, Chinese electric-vehicle maker Xpeng’s (NASDAQ:XPEV) deliveries jumped 29% YOY to 9,026 EVs.

The automaker says that its new X9 EV is now the leading MPV (multi-purpose vehicle) in China, as XPEV delivered nearly 4,000 X9 EVs in March.

Meanwhile, the penetration of XPEV’s leading ADAS offering, XNGP, continues to increase as 82% of its customers utilized it in urban driving scenarios last month. And its “unlimited XNGP” offering was provided to more of its customers in March.

Also noteworthy is that it expanded recently to Thailand, Singapore, Malaysia and Germany.

Finally,earlier this year Xpeng expanded its partnership with Volkswagen (OTCMKTS:VLKAF), boding well for its long-term outlook.

On the date of publication, Larry Ramer held long positions in XPEV and BNGO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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