People often pose the question “What are the top stocks to buy in 2022?”. However, the answer to this question is subjective. It solely depends on your personal financial condition, financial goals, liquidity needs, risk appetite, and expected returns. And yes, all investors need to set aside some emergency funds to tackle contingencies. So, you must do your homework before investing in any stock.
However, we have tried to identify some stocks which are likely to outperform the market in 2022. While this is not a comprehensive list, it is diversified as we have mentioned top stocks from different industries. Keeping that in mind, let us discuss some good stocks to buy in 2022, by analyzing the recent financial figures of each of them.
Some Top Stocks To Buy in 2022
Pinterest is a social networking app that allows you to upload images using keywords. It calls itself a “visual discovery engine” that facilitates you to create a life you desire. The best platform to provide as well as takes inspiration from others. It is also a robust digital marketing platform forlead generation, product positioning, and brand building.
Pinterest is a newbie at the US stock exchanges. It went public in April 2019 and post a successful IPO(Initial Public Offering) was valued at $10 billion. It started with a bang at Wall street with share prices soaring, a month after its upcoming IPO. However, its first quarterly earnings report post the IPO was a massive disappointment which led to its stock prices plummeting by 19% within 24 hours.
It continued to perform poorly till worldwide lockdowns due to COVID 19 came as a blessing in disguise. Pinterest witnessed 442 million user registrations all over the globe during the lockdown. An increased user base led to a 58% growth in sales that consequently led to revenue growth in all quarters of 2020. Its current market value is $42.3 billion.
Pinterest has added another feature to its cap by partnering with Shopify. This partnership is expected to bolster Pinterest’s business. Merchants can now pin their product and service catalogs on Pinterest. You just need to click on these ‘product pins’ to make a purchase through integrated e-commerce platforms like IBM commerce, Salesforce, etc.
Given all the above factors, Pinterest shows a strong growth potential with no signs of decline in the near future. Thus, this is one of the top stocks to buy in 2022.
Are you new to the world of investing? Do you have minimal knowledge of stock trading gimmicks? If yes, then Microsoft stocks are the best for you as they are blue chip stocks. Blue-chip stocks are known to generate higher returns at relatively lower risks.
Microsoft’s earnings were downhill between 2011-2017. But its successful transition from desktop computing to cloud computing led to a rise in the values of its stocks. Microsoft has continually expanded its operations that include the development of productivity software, server software, online games, web services, and computer hardware. Continual expansion of business operations is expected to reflect positively on its stock prices.
Microsoft stocks generated 32% returns in the first quarter of 2020-21 due to a 12% increase in sales. Thanks to the growing demand for its cloud computing services. The work-from-home culture accelerated during the COVID-19 lockdown that provided further impetus to Microsoft’s PC sales. Microsoft also regularly pays out a dividend income of 1.1% p.a.
Currently having a market value of $1.6 trillion, Microsoft is expected to generate higher returns in the next 5 years. As per industry estimates, Microsoft’s revenues will increase by 15% each year. Thus, it is one of the good stocks to buy in 2022.
Hilton Worldwide Holdings
If you are contemplating stock investments in 2022, then stocks of this multinational hospitality chain are a good option for investment.
Hilton Worldwide Holdings is a flourishing organization and long term shareholders have witnessed its stock prices rise by 116% in the last 5 years. Its current market valuation is $29.6 billion.
The year 2020 was unfavorable for this hospitality chain as the virus sucked up their sales by 50%. Consequently, their revenues declined by 64%. Well, that’s a steep decline.
However, the existing shareholders of this firm received some respite in the last 3 months. As the world is gradually recovering from the COVID19 damage and returning to normalcy, Hilton’s stocks gained 27% in the last 3 months.
But, you may still be wary of investing in this stock. Let us understand some more details about Hilton. In the last 1 year, Hilton hardly made any profits. Usually, companies that do not make profits grow their revenues faster, and Hilton is no different.
In the last 5 years, Hilton’s revenues declined by 3.8% but share prices grew at a compounded rate of 17% p.a. This is a reminder of the fact that share prices always reflect expectations of the future. Historical trends have lesser significance. Stock market experts are quite bullish about Hilton’s stocks as demand is picking up as the virus is gradually fading away. This positive sentiment will lead to an increase in Hilton’s stock prices in the future.
The Total Shareholder Returns (TSR) of Hilton were 228% in the last 5 years and 3.1% in 2020, irrespective of a downslide due to the global pandemic.
Thus, this is definitely one of the top stocks to keep a watch on in 2022.
Castle Biosciences (CSTL)
Are you ready to explore the Diagnostics and Research industry for investment purposes? If yes, then consider the stocks of CSTL.
Before we analyze the current stock trends of CSTL, we will give you a brief background of this firm. CSTL specializes in developing and commercializing tests for skin cancer. They make use of genomic information to provide better treatment for skin cancer. Their product and service portfolio is wide.
CSTL went public in July 2019 and has grown by 262% since its IPO offering of $16 per share. It is currently valued at $1.2 billion.
A major chunk of their shareholders is institutional investors. Institutional investors hold 50% of the total shares with ownership predominantly controlled by the top 17 stockholders. This implies that CSTL enjoys a decent level of credibility among the investor community. But, the risk posed by crowd trades cannot be overlooked.
However, the positive aspect of their shareholding pattern is that insiders own CSTL shares worth $130 million. Proper insider alignments are a healthy sign for a stock’s growth.
Industry experts have forecasted CSTL’s revenues to grow by 100.1% per year for the next 3 years. Therefore, it is safe to conclude that you can expect a bull-run of CSTL stocks in the near future.
Hence, this is definitely one of the best stocks to buy in 2022.
Are you willing to go the extra mile and take some risk to earn higher returns? If yes, then you can consider the stocks of a small company like IEC Electronics which has a current market capitalization of $121.9 million.
IEC mainly caters to the defense and medical sectors and develops customized electronic devices for them.
As per stock analysts, IEC stocks are like diamonds in the small-firm category.IEC stocks had a bull-run in October 2020, with its stock prices rising by 9.4%. It generated 18% ROE (Return On Equity) in the third quarter of the fiscal year 2020-21, much higher than the industry average of 9.9%. Their net incomes rose by 43% in the last 5 years. This phenomenal income growth can be attributed to efficient management and high retained earnings. IEC has also registered a net revenue growth rate of 11%, higher than the industry average, in the last 5 years.
Looking at these impressive figures, we think you should not be doubting the future growth potential of this stock. So, this is one of the best stocks to buy in 2022.
United Parcel Service (UPS)
Are you speculating what stocks to buy for 2022? Are you interested in investing in the freight and logistics industry? If your reply is in the affirmative, then UPS may be the right stock for you.
The current market value of UPS stands at $146.2 billion – much higher than that of its arch-rival FedEx. The prime reason for these high figures is UPS’s ability to generate profits and free cash flows from revenues. In other words, UPS’s capital expenditure per share is lower thereby leading to higher free cash flows.
The lockdown fostered a stay-at-home culture that led to a phenomenal surge in e-commerce volumes. However, to meet the increased volumes and service new customers, UPS had to increase its capital expenditures. They had to ramp up their logistics infrastructure too. That exerted downward pressure on its free cash flows in 2020.
However, recently UPS CEO Carol Tome clarified that their capital expense outlay will reduce in 2022. She further stated that the sole focus of UPS is to improve profit margins and bring free cash flow generation back on track in 2022.
While there is no guarantee that UPS will achieve its goal in 2022, such convincing words from the CEO are enough to generate a positive sentiment among investors. This positivity will reflect in its stock prices too.
Thus, you can be bullish on this stock in the near future and it can be one of the best stocks to buy in 2022.
This Netherland-based specialty chemicals firm currently valued at $29.6 billion may be one of the top stocks to watch out for in 2022.
LyondellBasell is one of the largest polymer and petrochemical manufacturers in the world with state-of-the-art refining facilities. Its refinery business comprises jet fuel, diesel, and gasoline.
If you are a value investor proficient at understanding the different valuation metrics, then this may be the best value stock to buy in 2022.
LyondellBasell shares are currently trading at a P/E ratio of 12.64. Its average P/E ratio in the last 12 months stands at 10.63, which is fairly decent when compared to the industry average of 22.37.
Currently, LYB shares hold a median PEG ratio of 1.51 which also factors in the stock’s forecasted revenue growth rate. It is comparable to the industry average of 3.45.
While the valuation metric figures look impressive, there are some factors you must be aware of before taking the plunge. On the surface, LYB looks like a diversified business model. But, chemical companies are cyclical in nature. So during times of recession, the stocks of such companies take a massive hit. LYB is no exception. LYB’s stocks registered a 65% fall in March 2020. However, the December 2020 figures showed positive signs of business recovery.
The bottom line here is that the stock is currently priced very low. As per the basic rules of investing, you should buy stocks when their prices fall and sell them off when prices rise. The increased investor preference for value stocks over growth stocks in 2020, further makes LYB a strong candidate for investment.
With positive vibes surrounding its momentum of growth, LYB is definitely not a stock you can afford to miss in 2022.
In December 2020, the Federal Reserve permitted banks to resume their buy-back operations in the first quarter of 2022. This is a positive sign for all banks in general.
MS has already authorized 8.1% of its current market capitalization (equal to $10 billion) for its buyback programs in 2022. This move is likely to bolster the Earnings Per Share (EPS) of MS. MS stocks are already generating an EPS which is 13.2 times the forecasted EPS. Its current EPS rating is 96 which is very good.
It registered a revenue growth of 16.2% and net income growth of 25% in December 2020. This uptrend is unlikely to decline in the near future.
Moreover, MS stocks have the highest composite rating of 90 among all large bank stocks. Bank stocks, in general, are soaring as more COVID19 vaccines are on the horizon. The Federal Government is also likely to announce economic stimulus packages soon.
In October 2020, MS purchased the $13 billion firm E-Trade Financial. It has also announced a 100% buy-out of the firm Eaton Vance. Thus, the market valuation of MS is expected to rise phenomenally in 2022.
Thus, this is a top stock to buy in 2022.
A tobacco company isn’t generally a top choice for investors. But, historical trends have indicated the inherent resilience in the tobacco industry.
Altria is one of the largest tobacco companies in the world that owns Philips Morris USA. Altria has always followed aggressive policies. While its legacy business continues to be that of cigarettes, it has diversified itself by penetrating the smokeless tobacco products market. It has 10% ownership in hard-drinks firm Anheuser-Busch InBev and 45% holdings in cannabis firm Cronos Group.
Currently, Altria stocks are trading at 9.3 times the forecasted earnings and pay an annual dividend of 8.5%.
The current figures, undoubtedly, look great. However, there are some risks that you must be well aware of.
You can buy this stock in 2022 if you’re willing to take some risks and explore some unconventional sectors for investment.
So, these were some hot stocks from different industries to buy in 2022.
Decision Time For Stocks To Buy In 2022
After reading the above article, it might be clear to you that experts are expecting a post-pandemic boom. Retail stocks are expected to do well in 2022. Dividend-paying thematic stocks show high-profit potential too. The gaming industry is likely to cross $180 billion by December 2022. So you can invest in some attractive gaming stocks too. The global pandemic has boosted the healthcare sector to unprecedented heights. So check out some hot healthcare stocks as well. Tech stocks will always remain top choices as the wave of digital transformation continues.
Thus, keeping all the above factors in mind and based on your personal preferences make the final choice of stocks to buy in 2022.
For more finance-related concepts you can have a look at the FinanceShed, and stay tuned for more updates.