As we enter 2022 and think about the past year, investors may have mixed emotions. The year 2021 was exciting as many hot stocks flew by and many fell back to earth. Some who fell in addition to other stocks with hypergrowth may not have noticed the corrections that were justified. For those looking for relative value in a rather overpriced market, buying a fall of such stocks can be a fruitful long-term strategy.
The question is: how do investors differentiate between wheat and chaff? It’s not as easy as it seems.
There are a few places to start. The basics are always important. Competitive positioning of companies must also be taken into account. In addition, the outlook for these shares is significant in the medium to long term.
Looking at these factors above, the next seven stocks certainly look interesting. Each of these companies has impressive growth profiles, a strong market position and attractive medium- to long-term prospects. However, each of these companies was sold out to some extent late.
Let’s delve into why these hot stocks might be worth buying at this recent fall:
- Modern (NASDAQ:MRNA)
- Target (NYSE:TGT)
- Home Depot (NYSE:HD)
- Apple (NASDAQ:AAPL)
- International business machines (NYSE:IBM)
- Amazon (NASDAQ:AMZN)
- Spotify (NYSE:SPOT)
Hot Stocks: Modern (MRNA)
As the world faces the effects of another version of Covid-19, economic growth, which many may have taken for granted in 2021, is under siege. However, there are some companies that benefit directly from the continuation of the pandemic. From this point of view, these shares can be viewed positively as a kind of protection of the coronavirus portfolio.
As one of the leading manufacturers of Covid-19 virus vaccines, Moderna’s positioning in the market remains impressive. One of the few vaccines accepted in the US, Modern’s MRNA-based vaccine is generally considered to be one of the best vaccines against Covid.
This company has gained an impressive market share not only at home but also abroad. It has been sent since 4 January 800 million doses its vaccine in more than 60 countries. This tripled Modern’s cash and cash equivalents and reached $ 17 billion by the end of 2021.
The last two months have not been good for Moderna’s shareholders. This is a stock that has been under pressure for some time, despite the bull news accelerating shots approved for adults 18 years of age and older. Additional approvals for Covid-19 for young people – and the likelihood that we will constantly need more reinforcement – improve the medium-term outlook for this stock.
For investors looking to buy for growth with proven potential for incredible returns, part of MRNA is something you should think about in the face of this downturn.
Target is a retail giant that has done incredibly well overall. This is a share that is only 15% lower than its highest value reached at the end of last year. However, there is reason to believe that Target has more room to operate if the economy continues to gain power.
This is because his business model is deeply rooted in American life. Three out of every four people living in the U.S. reside within 10 miles target locations. As far as companies that have a ditch around their core business are concerned, Target is definitely worth considering in the US retail bulls in the coming years.
It is also a company that is generally resilient to rising interest rates. With impressive cash flows and rising margins, TGT shares are looking much more attractive. According to their own report for the third quarter, digital sales increased by 29% compared to the same period last year. Revenue in the third quarter was up 13% to $ 25.3 billion.
Overall, Target is moving in the right direction. Although it is currently hot, it is a stock that would be worth buying in the event of any prolonged fall compared to current levels.
Hot Stocks: Home Depot (HD)
Another best retail stock, I’ve been in favor of Home Depot for a while now. The biggest retailer for home improvements in the U.S. has also been in impressive traffic lately.
Many now attribute this incredible success to the pandemic. As we got stuck at home, many of us noticed those annoying chores around the house that we never got to while we spent most of the day outside of our homes. Forced home time has proven to be a good thing for home improvement retailers – who would have thought?
Nevertheless, there are many who believe that the recent appearance of the Home Depot was not a one-off. The activity of buying housing remains elevated, as many millennia have been looking for their first home. Given that general economic activity is strengthening, the prospect of a Home Depot likes a lot from here.
This company is recent quarterly profit they talk about the value these short-term winds had for this business. The company’s nearly 10 percent sales growth and total revenue of $ 36.8 billion is amazing.
Even more impressive is that net profit increased by 20%. In other words, Home Depot has found a way to become extremely profitable at a time when goods have risen. For long-term investors, this is a business model worth liking.
Now, we come to the part where we talk about the middle ground The biggest – and perhaps the best – a company in the world. Apple is a technology stock that every investor wants to buy 10 years ago. In the past, it has been observed that high-profile investors like Warren Buffett have stepped in to buy as many shares as possible – and with good reason.
Apple has what could be considered a “perfect” feature set. It is a (partly) luxury brand with a loyal consumer base and absolutely amazing margins. Over time, it has found a way to expand into services and increase the margins of its existing product lines. This led to Apple becoming the absolute king of cash flow.
Apple is a leader in many ways and recently exceeded a market capitalization level of $ 3 trillion – the first company to do so. Investors can avoid these stocks at these levels during such a run.
The thing is, Apple isn’t extravagantly overpriced at its current price. Instead, considering the money in the company’s balance sheet and its projected growth rate, the valuation of AAPL shares looks fair given the growth it provides.
Long-term investors looking for hot stocks on which to hang their hats can’t go wrong if they own Apple in the long run.
Hot Stocks: International Business Machines (IBM)
It may be difficult to qualify International Business Machines (IBM) as a “hot stock” in any conversation. This is because this stock has been relatively obedient over the last decade and has actually lost value to shareholders.
However, with strong dividends and long-term prospects for impressive growth among computer giants, there is a reasonable thesis about IBM’s share ownership. From a fundamentals perspective, investors should like a 24-fold price-to-earnings ratio (P / E) and a 4.9% dividend yield. This type of value is very difficult to find in the technology sector today.
If I increase the chart a little, things look much better for IBM. Shares have risen more than 8% in the last month alone and have become more attractive to investors with value.
Accordingly, IBM is an interesting stock to consider for those who expect further value rotation from growth. The company he estimated it will bring in $ 35 billion of free cash flow over the next three years. This is largely due to his success in the cloud computing sector.
So there may be little room for hope about this company’s growth potential. For now, IBM remains an interesting stock for investors to keep on its watch list.
One of the hottest stocks on the market in decades should be Amazon. This e-commerce giant has absolutely dominated the online retail market and has become one of America’s biggest players in this regard. However, AMZN shares have fallen 14% from a recent high in history, an interesting entry point for investors at these levels.
Much of this success is related to Amazon’s dominance in the cloud computing segment. He is currently one of the top global players in this space with an enviable market position.
Among the largest stocks with mega-capitals, Amazon continued to increase its top line in an amazing way. In fact, many investors have not seen this, so stocks have progressed since the start of the pandemic.
Like some of the other names on this list, Amazon has benefited from Covid-19. However, the secular growth trends on which AMZN shares are based remain strong. This is a company that I look at very bullishly in the long run.
I would consider buying at any significant drop below $ 3,000 per share. Given the recent barriers posed by interest rates, anything is possible in this regard.
Hot Stocks: Spotify (SPOT)
We finally have Spotify. Shares of SPOT, one of the hottest shares of the pandemic, absolutely jumped at the end of 2020 as investors searched for games to stay at home.
However, in the last year, Spotify has given up most of these profits caused by the pandemic. Currently, SPOT shares have fallen more than 40% from their 52-week high.
For those looking for growth stocks at an impressive price, it may be worth considering Spotify. Many still believe that this stock is overvalued due to rising interest rates and technological sell-offs. However, those who would like to buy some blue chips may want to consider this mid-range player. With a market capitalization of just under $ 45 billion, Spotify is a company that can grow into its valuation.
Now, the fact that this company has brought $ 2.5 billion in revenue in the third quarter hints that Spotify trades about four times its annual revenue. It’s not incredibly cheap, but it’s also not incredibly expensive. So a shift in market sentiment could put Spotify up and running this year. It all depends on which direction the wind is blowing.
At the time of publication, Chris MacDonald did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are the subject of InvestorPlace.com Guidelines for publication.
Chris MacDonald’s love of investing has led him to pursue an MBA in finance over the past 15 years and to take on a number of leadership roles in corporate finance and venture capital. His past experience as a financial analyst, along with his zeal in finding undervalued growth opportunities, contribute to his conservative, long-term investment perspective.