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TheStreet Open House

3 High-Risk, High-Reward Stocks You Need to Know About

Stocks in this article: SCCO FELE DRI

By James Brumley

NEW YORK ( StreetAuthority) -- After being in the investment business for longer than I care to admit, surviving two nasty bear markets, experiencing the advent of the Internet, seeing more corporate scandals than I care to remember and more, I've decided there are only two basic kinds investment mistakes -- taking on too much risk, and not taking on enough risk.

The latter may be more prevalent than you'd believe.

Granted, you start a portfolio with conservative holdings. If you've got that piece of your allocation in place, though, and now have some extra cash to take on more risk in search of bigger rewards, here are three aggressive stocks that could offer outsized gains.

1. Franklin Electric (FELE - Get Report)

Investors who have never heard of Franklin Electric might assume it's a utility company. Franklin actually makes electrical equipment -- groundwater and fuel pumping systems to be exact. It's far from being a riveting business, but what it lacks in pizzazz it makes up for in reliable growth.

Why now: There are a couple of different good reasons to own Franklin Electric right now, not the least of which are growing sales and profits. You just have to take a big step back and look at the bigger picture to see the growth potential for this stock.

Last year's top line of $821 million and bottom line of $63.1 million are both record-breakers for the company. Earnings are projected to swell by 14% this year after last year's 61% improvement. Boring or not, that's impressive growth many corporations envy.

Investors can still count on earnings volatility going forward, but the results are impressive for those who can commit for a year or more.

The other reason investors may want to consider stepping into Franklin Electric now is a little less sophisticated: Shares are in a long-term uptrend and the well-paced rally shows no signs of stopping.





2. Darden Restaurants (DRI - Get Report)

You may know this company better as Red Lobster or The Olive Garden -- a couple of cliché casual-dining chains that are occasionally the butt of restaurant jokes. Those taking jabs at the company, however, may also want to realize the company is laughing, too -- all the way to the bank.

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