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Ever since special purpose acquisition companies (SPACs) first became popular last year, some have proven extremely lucrative. In the electric vehicle (EV) space, for example, Lucid Group (NASDAQ:LCID) — which announced it would merge with Churchill Capital Corp IV back in February — has jumped from around $20 in April to nearly $45 as of Nov. 15. ChargePoint (NYSE:CHPT) has been another lucrative SPAC for some investors. Back in September 2020, the company announced it would merge with Switchback Energy. From Sept. 28, 2020 to Dec. 21, 2020, the shares surged from $15.53 to above the $45 mark.

History shows that the best strategy here is usually to buy SPACs after they've announced a merger target but before the actual completion of the combination. Investing in a pre-merger SPAC when you don't know exactly what stock you're getting is often similar to driving in thick fog or a bad snowstorm; you may have some idea of where you're going, but you can't be entirely sure. And sometimes, you can end up with bad results.

For example, Bill Ackman's Pershing Square Tontine Holdings (NYSE:PSTH) was close to a deal to buy 10% of Universal Music Group (OTCMKTS:UMGNF), but the U.S. Securities and Exchange Commission (SEC) pushed back on the transaction. Before that, PSTH had been rumored to be interested in a stake of Bloomberg.

Now, however, it looks as though the SPAC is going to pay its investors $20 per share. Still, many have undoubtedly lost money on this name, which spent the majority of its brief history over the $20 level.

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The moral of the story? Be careful and thoughtful when you invest in SPACs. That said, these four pre-merger SPACs are unlikely to similarly disappoint:

• Supernova Partners Acquisition II (NYSE:SNII)
• Digital World Acquisition (NASDAQ:DWAC)
• Novus Capital II (NYSE: NXU)
• Oxus Acquisition (NASDAQ:OXUS)

SPACs to Buy: Supernova Partners Acquisition II (SNII)

First up on this list of SPACs is Supernova Partners Acquisition II. This company's merger target is Rigetti Computing. Founder and CEO Chad Rigetti has said that "in the next decade one Rigetti quantum computer could be more powerful than today's entire global cloud."

If the company can accomplish that lofty goal — or even come close to it — Rigetti's shares could be worth a tremendous amount of money. What's more, as the Supernova closes in on this target, its share price should climb exceptionally.

Furthermore, Chad Rigetti seems to be a good leader for the company as it seeks to accomplish its goal. An IBM (NYSE:IBM) alumnus, Rigetti is a quantum computing physicist with a Ph.D. from Yale.

But that's not all. Rigetti Computing has been further validated by its deal with Astex Pharamceuticals and Riverlane, another quantum computing company. Under the agreement, the companies will seek to "develop an integrated application for simulating molecular systems using Rigetti Quantum Cloud Services," a project that could help "transform drug discovery."

Astex is a subsidiary of Otsuka (OTCMKTS:OTSKY), a very successful Japanese drug maker. Otsuka has a market capitalization of more than $20 billion.

Cleary, SNII stock has some big potential.

Digital World Acquisition (DWAC)

Next up on this list of SPACs is a name that has agreed to merge with Truth Social, the upcoming social media company of former President Donald Trump. As I wrote in a previous column, Truth Social should appeal to many fans of the former president, as well as those who are weary of Trump's suspensions on both Twitter (NYSE:TWTR) and Meta Platforms' (NASDAQ:FB) Facebook.

In that previous piece, I estimated that Truth Social could generate revenue of more than $900 million and a bottom line of $180 million in its first year. With DWAC stock trading at a market cap of around $2.2 billion, the shares could have a price-earnings (P/E) ratio of just 12.2 and a price-sales (P/S) ratio of 2.4 based on my estimates.

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If Truth Social does meet my estimates and grows rapidly, its P/E multiple should be more like 20 to 30. In my opinion, as a result, the shares could jump as high as $180. That's triple their current levels around the $60 mark.

SPACs to Buy: Novus Capital II (NXU)

Novus Capital II is the next pick of the SPACs on this list. Back on Oct. 18, Novus announced that it would merge with Energy Vault, which develops large-scale energy storage products.

Energy Vault's systems work on the same "gravity-based" principles as energy storage solutions used for hydroelectric power. However, instead of water, the company's products store power derived from falling solids that can be made from cheap materials like soil. As such, its systems obviously do not have to be used in conjunction with large amounts of water.

These systems save energy for roughly two to 12 hours at a time. That's ideal for utilities looking to store energy from renewables for later use. According to the press release, the systems are also "automated with advanced computer control and machine vision software."

Further validating Energy Vault's solutions are investments from Softbank (OTCMKTS:SFTBY) — a huge Japanese investment bank — and Saudi Aramco, one of the world's largest companies. All told, NXU stock could prove to be a solid play on the energy space

Oxus Acquisition (OXUS)

Last up, OXUS stock is the only one on this list of SPACs that hasn't yet chosen a target. However, I have included it here because there are indications that the company may choose a target that will be truly disruptive.

This SPAC is reportedly focused on clean energy businesses in emerging countries. Its sponsor is Kenges Rakishev, a "global investor and entrepreneur from Kazakhstan." More interesting, though, is that Rakishev is the same investor who reportedly founded Singulariteam, one of the initial investors in Israeli battery maker StoreDot. Could StoreDot potentially be the target for Oxus?

There would certainly be some benefits if that is the case. For example, this Israeli company has developed an EV battery that can be recharged in "only 10 minutes." Furthermore, it is in advanced talks with multiple automakers. Plus, BP (NYSE:BP), Samsung and Daimler (OTCMKTS:DDAIF) have all invested in StoreDot. Back in March, StoreDot was also reportedly looking to launch an initial public offering (IPO) through a SPAC.

But the icing on the cake? Early Bird Capital — which has launched many high-profile SPAC IPOs like Tatooed Chef (NASDAQ:TTCF), Velodyne (NASDAQ:VLDR) and Microvast (NASDAQ:MVST) — is an underwriter of Oxus.

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So, even if Oxus does not merge with StoreDot, there's a great chance this SPAC will find a target that greatly excites investors — especially given the combined talents of Rakishev and Early Bird.

On the date of publication, Larry Ramer held long positions in DWAC and OXUS. 

Larry Ramer has conducted research and written articles on U.S. stocks for 13 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 GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

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