James Glassman’s 10 Stock Market Picks for 2022
Last December, after topping the S&P 500 index five years in a row, I wrote, “This kind of streak is not supposed to happen, and readers should be warned that there is no guarantee that it will last.”
Well, it’s over. My Annual Picks for 2021 It performed well, with an average return of 17.4%, but the S&P fared much better, gaining 35.8%. (Returns and statements throughout the story extend through November 5th.)
Since 1993, I’ve made a list of 10 stocks for the next year. Nine are chosen from among the choices of experts I trust, including one. In 2021, I’m happy to say, my pick was the biggest winner: ONEOK (Okay), the 115-year-old natural gas pipeline company, which benefited from a 139.9% rise in oil prices.
I will come to my choice of 2022 eventually. Let’s start with one of value line survey of investment, A kind of succinct research that has a strong predictive record as well. My strategy is to choose among the stocks value line Highest ratings (“1”) for both timeliness and safety. This list is short now: nine companies, including obvious ones like Apple (AAPLand the visaFifth).
outside is T. Rowe Price Group (TROW), a Baltimore-based asset manager whose earnings have risen every year since 2009 despite the growing popularity of low-cost index funds. value line He notes that “equities have made significant progress over the past year. However, our expectations … suggest that a worthwhile appreciation can be made over the next three to five years.”
Parnassus Endeavor (Parrox), which is a socially responsible fund – a fund that invests particular Environment, Social and Governance (ESG) Over the past 10 years, we’ve had an impressive annual rate of 18.3%. In 2021, Jerome Dodson stepped back from running Endeavor and other Parnassus funds, but he remains a guiding force in the company he founded 35 years ago. My portfolio picks for 2019 and 2020 were microchip companies with average gains of around 100%.
For 2022, I love PepsiCo (PEP), which was acquired by Billy Huan, the fund’s new single manager, for the first time in July. In addition to soft drinks, the company owns such respected brands as Lay’s, Quaker and Gatorade. Revenues are constantly rising, and PepsiCo may be able to benefit from general inflation with sharp price increases.
The other big winner for 2021 came from Dan Abramowitz, of Hillzone Financial Management in Rockville, Maryland, an expert on working in small businesses. His pick was IEC Electronics, which Creation Technologies bought in October for 53% more than the stock price when it put it on the list, noting that “IEC is also a potential acquisition target.”
For 2022, Dan recommends DXC . Technology (DXC), a mid-sized IT company based in the suburbs of Washington, D.C., is in the midst of a transformation, Dan writes, “However, we’re still in our beginnings here.” Earnings are improving, but the stock is “valued at less than 10 times the current fiscal year’s earnings.”
a few months ago, I recommended AB Small Cap Growth (Coax), a fund that has generated an impressive annual return of 29.8% over the past five years. The fund was adding to the Louisiana-based holdings LHC . group (LHCG), a company that provides acute aftercare services, including home health and aged care services, at more than 700 locations. The stock price appears to be doing well after the setbacks caused by the hurricanes and because health care workers were forced into quarantine due to COVID-19. As the population ages, healthcare has become a growing industry.
Fidelity Advisor Growth Opportunities (Vajax) is red-hot, ranking first on 3% of funds in its category for five-year returns. The problem is that they carry a whopping 1.82% expense ratio and are mostly sold through advisors. Still, you can scan her portfolio for ideas. Most of the fund’s holdings are technology stocks, but the only new purchase of 2021 among the top 25 holdings was Freeport McMorran (FCX) and minerals (copper, gold, silver) and an oil and gas producer. The stock has doubled over the past year, but the price-to-earnings ratio, based on analysts’ forecasts for 2022, is just 11.
A disappointment in 2021 was Upland Software (UPLD), down 47%. The pick of Terry Tillman, a software analyst at Trust Securities, whose previous picks on my annual list have outperformed the S&P 500 for nine consecutive years has been an astonishing one. Tillman recently started covering the day EngageSmart (ESMT) with a buy rating. The company, which helps healthcare professionals manage their practices, only went public in September but already has a market capitalization of $5 billion, and Tillman sees the price going up a lot.
It has not been a good year for big Chinese companies, which the Chinese government apparently believes have become big enough to threaten the Communist Party. As a result, the worst performer on the 2021 list was Alibaba Group Holdings (Baba), the e-commerce giant, with shares down nearly half.
However, if you have an appetite for risk, Chinese stocks offer remarkable value these days. Matthews China (MCHFX), my favorite Asian stock fund, stuck to Tencent Holdings (TCEHY), which is down about 40% from its peak in February. Tencent, with a market capitalization of $576 billion, operates worldwide and provides social media, music, mobile gaming, payment services, and more.
Last year, it turned for the first time into Schwab Global Real Estate (Swaxand pleased with the 21% return of her choice, Singapore-based UOL Group (nasty), with an office, residential and hotel portfolio. The fund’s third largest holding is general storage (PST), owner of 2,500 facilities in 38 states. Is there a better job? Each year, I receive an email notification telling me that my storage rental price has gone up, and what should I do about it? Moving my stuff is a terrifying idea. I’ve always wanted to own this stock. It’s expensive, but waiting can make it more expensive.
Over the years, the assets of the Berkshire Hathaway Company (BRK.B), Warren Buffett’s holding company, is getting more diversified. In the last report, the company owned 40 publicly traded shares. Berkshire Hathaway’s biggest possession By far Apple, at about $135 billion. Guess what’s the second? American bank (buck) at $49 billion. I’m a huge fan and longtime shareholder of Bank of America as well, and it looks especially good at a time when interest rates are soaring.
My contradictory bias paid off last year when I dumped my disastrous 2019 choice for Diamond Offshore Drilling (I went bankrupt) and scored a double with ONEOK. Searching for value again, you’ve arrived Starbucks (SBUX), which took a big (and, in my opinion, unjustified) hit over the summer when the company warned of a slower recovery in China. So I take advantage of volatile investors and recommend Starbucks, one of the best managed companies in the world, which is steadily growing with 33,000 outlets worldwide.
I will conclude with my usual warnings. These 10 stocks vary by size and industry, but are not intended to make a diversified portfolio. I expect them to outperform the market in the next twelve months, but I wouldn’t recommend holding the stock for less than five years. Buy and hold business! Finally, these are my recommendations, but consider suggestions for your study and decision making. No guarantees.