This time last year, heading into the 2020 holiday season, stock watchers were hyping the companies that had thrived by adding value during the pandemic. Amazon, of course, was at the top of many lists, as were companies like UPS and FedEx, which helped to get all those cardboard boxes onto all those porches.
Fast-forward one year and the big fears are creeping inflation, a precarious labor market, and widespread shortages caused by supply-chain backlogs. All of that stirred together makes for high prices and tight supplies heading into the holiday buying season.
The companies that are best positioned to weather that perfect storm and emerge as winners in 2022 are the stocks you should be putting on your watchlist right now. Thanks to a market-wide September sell-off, many of them are currently on sale.
No one can say for sure, of course, which companies will be sitting pretty in February or March, but there is plenty of reason to believe that these 10 stocks will be among the big winners heading into the new year.
Last updated: Oct. 20, 2021
Thanks to a damaging whistleblower leak, Mark Zuckerberg and the social media giant he built have been in the news for all the wrong reasons lately. Even so, if you’re considering buying Facebook, the runup to winter might be a good time to make your move.
Facebook is trading “conservatively” compared to its long-term potential, according to Motley Fool, and the company is heading toward its busy season. Facebook earns one-third of its annual revenue over the holiday quarter.
Target is one of the companies that President Biden recently enlisted to help ease the massive supply chain backlogs that are disrupting every level of retail commerce heading into the holiday season. But even without a presidential partnership, Target is a hot stock right now.
As Invezz points out, Bank of America named it as one of its top four retail picks heading into quarter four. The news sent the stock’s price climbing by 1.57%, but the best gains might be yet to come. Also, Target’s 18.34 P/E ratio is something that must be making value investors perk up their ears.
Like Target, Walmart has had an ugly month. Its stock lost 8% of its value since mid-September — Target lost 13% — over supply-chain fears. Also like Target, President Biden called out Walmart specifically as one of the companies he has enlisted to work toward a resolution.
Both companies are well-positioned to ride out a holiday supply crunch, according to Yahoo Finance, thanks to things like strong inventory, chartered vessel capacity, long-term shipping agreements and favorable port access.
Go Green: Building a Green(er) Portfolio
Just like Target and Walmart, Nike stock is on sale right now. Although it has bounced back some, Nike shares cratered 6% on the same supply-chain anxiety that tanked the big-box retailers. But by mid-October, the stock was climbing again on news that Goldman Sachs had given Nike a “buy” rating after determining the company was well-positioned to weather its “transient” supply troubles.
Its factories in Southeast Asia — which had been shuttered by the Delta variant — are now opening and resuming production again, according to TheStreet. Sales in China are up 11% over last year. They’re up 15% in North America, Nike’s biggest market.
Analysts were already sweet on Affirm by the end of the summer. The buy now, pay later (BNPL) fintech — so popular with young shoppers — was disrupting the traditional credit card industry and changing the very nature of how buyers financed purchases.
Its price has been volatile since reaching its high in February, but the last few months have brought nothing but good news. Affirm, which already had a relationship with Walmart, saw a huge bump in its stock price when it struck a deal with Amazon, according to Investor’s Business Daily. It then went skyward again when it announced a partnership with Target.
Bank of America predicts that BNPL usage will increase by 10-15 times by 2025.
All of Disney’s theme parks are now open for business — even some of its cruises are again accepting passengers. The company survived the pandemic despite the long-term closing of its parks — the Disney brand’s lifeblood — because it has so many business divisions to lean on should one of them fall on hard times.
The alternative revenue stream that came through the biggest for House of Mouse was Disney+, which beat expectations when it reached 116 million subscribers during the third quarter. When you add in Disney-owned ESPN and Disney-controlled Hulu, the company’s combined streaming services beat expectations by topping 174 million subscribers, according to Investor’s Business Daily.
Theaters are now open again and Disney has been crushing it at the box office with hits like “Black Widow” and "Shang-Chi and the Legend of the Ten Rings."
Dividend stocks have long been seen as a hedge against inflation, and with prices on the rise, one dividend stock stands out above all the rest. AT&T is flirting with lows it hasn’t seen since 2010 and has dropped 7.5% in six sessions. While the share price has been falling — making it historically cheap to buy — its dividend yield has been steadily climbing.
AT&T’s yield is now a mouth-watering 8.18 percent. Even if it cuts its dividend in 2022 as it said it might, you would still be hard-pressed to find even a handful of companies on the S&P 500 that are more generous to their shareholders.
If value stocks and dividend stocks are too vanilla for your taste, and the only thing you want out of 2022 is growth, growth and more growth, consider the AI segment — and Upstart, in particular. The company is working to replace the FICO score through artificial intelligence, according to Motley Fool, and it promises to dramatically reduce defaults without lowering loan acceptance rates.
Its stock price leaped by more than 660% in 2021, earning the company a $23 million valuation. By the end of 2022, Upstart is expected to grow its revenues fourfold.
It’s impossible to ignore the fact that Chewy stock has lost nearly half its value since its February highs, but it is still one of the top shops for online buyers in the $98 billion pet supply business. According to Seeking Alpha, the company’s Autoship and subscription services have convinced legions of Chewy loyalists to put their pet’s recurring purchases on speed dial.
Pet ownership is still experiencing a meteoric rise, and Chewy’s customers spend more the longer they remain with the company — an average of $400 the second year, $700 the third year, and $900 the fourth year.
Its impressive fulfillment operation can ship overnight to 80% of the U.S. population, according to Motley Fool, a fact that helped Chewy’s Autoship business grow by 32% in the first half of 2021 alone.
Like Chewy, GoPro has walked a rocky road as of late — but many analysts think investors will want to have their cameras turned on to record the stock’s speedy path to recovery. GoPro has added a subscription service as part of a complete renovation of its business model — and now, according to many analysts, the stock looks cheap as GoPro stages a comeback.
It grew its subscription base from 372,000 to 1.16 million between the second quarter of 2020 and Q2 2021 — that represents a growth of 212 percent. Its revenue is up 48% over that same time. Its Quik camera app is new as of March but has already picked up 100,000 paying subscribers.
More From GOBankingRates