High risk shares aren't for everyone but they can be an attractive option for those investors who are comfortable with high levels of volatility and the potential for big capital gains (and losses).
With that in mind, here are four shares that risk-tolerant investors might want to consider as part of an overall balanced portfolio:
Speedcast International Ltd (ASX: SDA)
Speedcast is a leading provider of telecommunications and satellite services for remote-based businesses such as offshore oil rigs and cruise ships. The shares have suffered a pretty big fall over the past six months after the company announced a large acquisition that virtually doubled the size of the business overnight. Understandably, the market is a little nervous about integration risks, but I think the shares could bounce back very strongly if the acquisition integrates smoothly and the company realises the synergies it has previously identified.
Cash Converters International Ltd (ASX: CCV)
Cash Converters has been a terrible performer over the past few years as regulatory changes and legal proceedings have eaten away at the company's business model and profits. Unsurprisingly, the market has lost total faith in the short-term lender and pawnbroker and the shares are now trading on a price-to-earnings ratio of just 7. The shares are clearly not for everyone, but I think the company is moving towards a more sustainable business model by exiting the pay-day lending sector and focusing on other sectors of the lending market. If it can make the transition successfully, I think the current valuation is cheap enough to provide a good amount of upside to risk tolerant investors.
Airxpanders Inc (ASX: AXP)
AirXpanders is an exciting small-cap healthcare company that has developed a novel product for breast reconstruction procedures following mastectomy. The company recently received initial approvals by the FDA and has subsequently launched its Aero-Form product in the U.S. It is still in the very early stages of being rolled-out and AirXpanders is still a long way out from being profitable which means the company is still very high risk. However, I think the company will only need to capture a small percentage of the overall market to be successful, as the potential market size is quite compelling.
Sirtex Medical Limited (ASX: SRX)
Sirtex has been a disappointing performer over the past few months thanks to a profit downgrade and shady insider selling. Looking forward, however, I think much of the biotechnology company's success and recovery will be reliant on positive clinical trial results that are expected to be completed this year. If the results are positive, it is likely that the shares will rebound strongly on the expectation that its SIR-spheres will become more widely used. On the other hand, unfavourable results will likely result in a negative reaction and a share price that will struggle to regain any meaningful positive momentum.
