As summer approaches, investors are currently wondering which stocks to place their bets on. While the analyst community expects volatility to continue in the near term, it also anticipates that stocks will rally this summer, even if only due to typical seasonal fluctuations. Some also warn of the possibility of a pre-crash “melt up,” CNN Business reported.
Needless to say, it’s important to keep a close eye on the market and make your own judgments.
Investment opportunities can come from many different sectors, and you should remain vigilant to find the best options for you and avoid any expensive mistakes. If you’re looking to buy stock in 2022, here’s what you need to know.
Top 10 Stocks To Consider in 2022
Before we dive deeper into which stocks you should be buying in 2022 and why, here’s a quick rundown of the top contenders. All statistics are current as of May 23, 2022.
|American Eagle Outfitters Inc.||$12.91||$2.186 billion|
|Travel + Leisure Co.||$47.14||$4.027 billion|
|Mueller Industries Inc.||$54.07||$3.077 billion|
|Salesforce Inc.||$157.23||$156.293 billion|
|Herc Holdings Inc.||$108.77||$3.251 billion|
|Devon Energy Corp.||$71.08||$47.042 billion|
|Marathon Oil Corp.||$27.84||$19.667 billion|
|Hewlett Packard Enterprise Co.||$14.40||$18.709|
|Berkshire Hathaway Inc.||$464,510.00||$685.208 billion|
|Micron Technology Inc.||$69.00||$77.352 billion|
Stocks With Growth Potential for 2022
When companies have a strong leadership team, strong sales, a large audience and a good growth market, they offer solid long- and short-term opportunities for investors. Here are some to consider investing in for the current year.
1. American Eagle Outfitters Inc. (AEO)
According to the Piper Sandler Teen Survey released on April 6, American Eagle is one of teens’ three favorite brands, right up there with Lululemon and Nike. That’s not surprising considering the success of its Aerie line, which helped drive year-over-year sales growth of 17% and 15% on a two-year basis at the end of 2021, according to Zacks Investment Research. Store revenues were up 32% thanks to increased traffic.
Share prices are down 63% since in the last year, but that hasn’t deterred analysts. They rate the stock a “buy” and predict an average price target of $27.18 — a 108% increase over the current $13 price.
2. Travel + Leisure Co. (TNL)
Formerly known as Wyndham Destinations, Travel + Leisure is a hospitality products and services company that operates vacation ownership and travel and membership segments in the U.S. and internationally.
The company benefited from a return to travel in the first quarter of 2022, with record sales per guest for timeshares. Revenue was up 35% year over year. Analysts rate the stock a “strong buy” and set an average price target of $75.13.
3. Mueller Industries (MLI)
Mueller Industries manufactures and sells aluminum, brass and copper, as well as plastics, in North America, the U.K., the Middle East and China. The Tennessee-based company was founded in 1917. Its operating segments include piping, industrial metals and climate.
A strong first quarter has helped Mueller shares remain relatively stable, and analysts say the short-term outlook is positive. They rate the Mueller a “buy” and call the stock undervalued — not surprising given it’s low 5.45 P/E ratio.
4. Salesforce Inc. (CRM)
Salesforce has long been ubiquitous among Fortune 500 companies that rely on its customer-relationship and marketing software-as-a-service product, but it since has expanded into a full-fledged communications and e-commerce platform with the acquisition of Slack and the launch of Commerce Cloud.
Shares are trading a hair’s breadth above their 52-week low of $154.55. Price to revenue and price to free cash flow are near 10-year lows, according to U.S. News, giving investors a chance to buy at a significant discount.
The consensus price target among analysts polled by Yahoo Finance is $278.80, which is a slight downgrade but nearly 78% higher than the current price. Analysts’ rate the stock a “strong buy.”
5. Herc Holdings Inc. (HRI)
Herc Holdings is a Florida-based equipment supplier that rents out aerial equipment, air compressors, compaction, earthmoving and material handling equipment, trucks and trailers and lighting equipment. It also provides equipment maintenance, repair, training and labor, among other services.
Last month, Simply Wall St. reported that shares could be trading as much as 42% below their intrinsic value. According to Yahoo Finance, the stock has a positive short-term performance outlook, a “strong buy” rating and an average price target of $198.88.
To measure stock performance, analysts and investors should take into account the stock’s potential and ability to increase its shareholders’ wealth during an estimated period. Here are some of the best-performing stocks to keep on monitoring throughout 2022.
6. Devon Energy Corp. (DVN)
This company’s stock price has recently gone up due to its capital return for shareholders, outstanding financial performance and geopolitical conditions that have sent energy stocks soaring.
It’s projected that DVN’s share price will continue to climb this year because of its high-dividend play status. This makes Devon Energy shares worth considering. This stock’s EV/EBITDA attractive valuations could potentially lead to increasing the company’s stock value.
Devon’s strong performance over the last 60 days has prompted Zacks to increase its consensus estimate by more than 33% and assign the company a Zacks Rank of #1 (Strong Buy).
7. Marathon Oil Corp. (MRO)
Shares of this stock have advanced almost 60% since the beginning of the year, while the Dow and S&P 500 have lost considerable ground. The effects of the Russian invasion of Ukraine are certainly a factor, driving share prices to just below their 52-week high.
A great deal of uncertainty exists around the short-term energy outlook, according to the U.S. Energy Information Administration, but analysts still recommend MRO as a “buy.”
When considering a stock, value investors tend to choose those trading for less than what they’re worth. The strategy includes measuring fundamental business metrics against the stock price with the hopes the price will rise alongside the company’s worth. Here are some of the best value stocks for 2022.
8. Hewlett Packard Enterprise Co. (HPE)
Hewlett Packard Enterprise, created when HP divided its operations, calls itself a “global edge-to-cloud” company that helps businesses connect, protect, analyze and act on their data and applications.
The company reported a strong first quarter with heightened customer demand driving orders up 20% compared to the same quarter last year, Zacks reported. And the company is flush with cash — $1.8 billion to $2 billion worth. As a result, it’s paying a healthy 3.39% dividend yield and repurchasing shares.
Trading at just 5.17 times earnings with a $14.40 share price, analysts’ consensus price target is $17.60, a nearly 22% increase.
9. Berkshire Hathaway Inc. (BRK-A)
It might seem counterintuitive that the world’s most expensive stock could be considered a good value, but consider this: Berkshire Hathaway is a holding company for businesses representing dozens of brands in industries as diverse as insurance, freight rail transportation, utilities, furniture, confections, batteries and recreational vehicles, to name a few, and it’s helmed by one of the world’s most successful value investors.
Berkshire Hathaway shares are up over 2.5% since the beginning of the year and almost 7% from a year ago. While not as “cheap” as a year ago, Barron’s says the stock is still a good deal.
Diversified earnings, excellent management and a recent spending spree — a deal to acquire Alleghany, an insurance company, and the purchase of a 15% stake in Occidental Petroleum — which Barron’s says investors love, bode well for patient investors. Of course, most will have to buy a fractional share of the $464,510.00 stock or pick up budget-priced Class B shares.
10. Micron Technology Inc. (MU)
Micron stock has taken a hit over the last year, but it checks a lot of boxes as a value stock — low price-earnings ratio, high earnings-per-growth forecast over the next year through the next five years, and a target price better than 30% above the current price. Analysts polled by Yahoo Finance rate the stock a “strong buy.” Their average price target is $110.42 in a range of $83 to $165.
It’s worth noting that Micron has beaten estimates by an average of 6.6% over the last four quarters.
Stephen “Sarge” Guilfoyle, Real Money columnist for TheStreet, believes that “demand for what Micron does will outpace supply and/or capacity for some time.” As for Micron’s financials, Guilfoyle noted that “the balance sheet is as clean as a whistle and gets high marks on the Sarge test.”
The stock market is in constant evolution, and those looking to invest need to pay close attention to its frequent ups and downs. When looking to invest in new stocks and diversify your portfolio, do your research and evaluate what’s best for you in the long run. The guide above is meant to give you some insight into some of the best options in the stock market nowadays. Be aware that these conditions may vary over time.
Good To Know
Experts recommend investing in stocks over bonds if your goal is growth and you have a strong appetite for risk. Although stocks are more volatile than bonds, historically, they have produced larger long-term gains. If investing in individual stocks is too risky for you, consider a mutual fund that invests in a basket of growth stocks.
Stock Investment FAQs
- Will small caps do well in 2022?
- Small-cap stocks are set to keep climbing in the current year. According to stock analysts, these alternatives are projected to have an edge over their large-cap counterparts. In recent months, the small caps have significantly outperformed stocks in the S&P 500, Dow and Nasdaq Composite.
- How do you pick stocks?
- When picking stocks, the main goal is often to find good value. If you’re looking to diversify your portfolio, look for trends in earnings, company strength, debt-to-equity ratios and dividend yield.
- What are the best industries to invest in right now?
- The current global situation has drawn attention to many industries that hadn’t been on the investors’ radar in previous years. Some of the best industries to put your money on nowadays are:
- – Artificial intelligence
- – Cloud computing
- – Green energy
- – Virtual reality
- – Sustainable industries
- – Transport
- – Cybersecurity
- – Pharma and healthcare
- – Biotechnology
- How do I buy stocks?
- You can buy stock through an online stockbroker, a full-time broker, or directly from the company. While you don’t need a broker to buy stock, having a middleman could give you more options and simplify your life when investing.
Daniela Rivera-Herrera contributed to the reporting for this article.
Data was compiled on May 23, 2022, and is subject to change.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.