As we approach 2022, investors are anticipating a year of opportunity and attempting to decipher the tea leaves. Inflation and interest rates are just two of the many variables at play. The omicron variant ensures that the pandemic remains a formidable opponent. Semiconductor shortages are still wreaking havoc on the supply chain. While petrol costs are rising, EVs are becoming more common. The United States midterm elections will undoubtedly play a role. With so many balls in the air, how do you pick growth stocks?
That is why we have come. We have compiled a list of five firms that are well-positioned for the current environment – as well as what we expect to see in the future. Consider these options if you’re looking for fantastic growth stocks to add to your investment in January:
1. Choice Hotels (CHH)
Cambria Hotels, Quality Inn, and Econo Lodge are just a few of the well-known hotel franchises operated by Choice Hotels. Although persistent difficulty in corporate travel, the company has placed a strong emphasis on leisure travel, which has enabled it to rebound from the pandemic.
Choice Hotels’ domestic RevPAR (revenue per available room) increased by 11.4 percent in Q3 2019 compared to pre-pandemic levels, which was one of the more reassuring data for investors. Domestic travel in the United States is expected to expand by 28.4% in 2022, according to industry research released in November. Omicron isn’t taken into account in that study, but the effect of the variation is predicted to fade by the spring as people return to the outdoors. This implies more people will visit Choice Hotels.
The stock of CHH has risen 44 percent to this point in 2021, and we expect it to continue to rise as the travel industry recovers.
2. Avis (CAR)
The automobile rental industry is one of the industries that has had a bad rap in the last two years. The pandemic, which ravaged tourism in 2020 and destroyed the automobile rental industry in the process, was a large part of that. However, a public implosion of a vehicle rental behemoth that went through a costly bankruptcy and became a poster child meme stock contributed to the poor view of the business.
To be clear, that corporation was not Avis, even though the vehicle rental industry felt the effects of the epidemic. Avis reported a 67 percent drop in sales year over year in its second-quarter 2020 earnings. The corporation took steps such as canceling 185,000 new vehicle orders and reducing CEO pay. Avis emerged relatively unscathed from the 2020 lockdowns and has been making the most of the country’s gradual reopening.
Avis announced record sales of $3 billion in the most recent quarter, up 96 percent year over year. Interestingly, sales were up 9% from the third quarter of 2019. The market reacted to these figures by giving CAR stock a whopping single-day gain of 108 percent. CAR gave up a lot of that gain once the initial frenzy died down, but it’s still a growth stock in 2021, with a 512 percent return so far this year. In the short term, Omicron may make travel more difficult, but Avis and CAR shares are expected to continue to expand in 2022.
3. Nucor (NUE)
Charlotte-based Nucor is the largest steel producer in the United States. It’s also the largest steel recycler in the country. Steel demand increased as the economy recovered in 2021, benefiting the corporation and its stockholders. Nucor reported $2.13 billion in net income in the third quarter. This is a new high for the corporation, rising 41% year over year. With that kind of performance, it’s no surprise that NUE is a growth stock, with a year-to-date gain of 116 percent.
The following year’s event is predicted to be even greater. President Biden’s Build Back Better proposal is encountering some difficulties, but it is anticipated to pass in the end. When that happens, infrastructure spending will skyrocket, resulting in even higher steel demand. That will act as a trigger for NUE stock to continue to rise.
4. Pfizer (PFE)
Since 2020, the story of PFE stock has been inexorably linked to Covid-19. In 2020, Pfizer was the first company to receive FDA approval for a Covid-19 vaccine. In 2021, the pharmaceutical behemoth will have produced an estimated 3 billion doses of the vaccine with its German partner. Not surprisingly, PFE stock has enjoyed excellent growth in 2021, with a gain of 62 percent so far.
PFE stock will be determined by the market for its Covid-19 vaccine in 2022 (and presumably beyond). For protection, Omicron is requiring those who have been properly vaccinated to obtain a third, booster dose. Variants are likely to continue to be a problem, and booster shots may become an annual ritual. Pfizer is also one of the few businesses vying for FDA clearance of a Covid-19 treatment pill.
This is being hailed as a game-changer, with the potential to drastically cut hospitalizations and mortality among people affected. And another driver of PFE stock price appreciation.
5. Crocs (CROX)
During the pandemic, Crocs, the foam ugly duckling of the footwear business, became the “it” shoes. People who worked from home emphasized comfort overlooks, and Crocs rocketed off the shelves. Crocs produced in conjunction with Justin Bieber sold out and subsequently sold for hundreds of dollars on the secondary market.
However, in the year 2021, something unexpected happened. Although many individuals returned to work, Crocs continued to sell like hotcakes. The company’s revenue increased by 73 percent year over year in the third quarter. Despite supply chain interruptions, the business anticipates revenue to expand by 20% in 2022, compared to a stellar performance in 2021.
CROX stock has gained 127 percent so far in 2021, and it’s on its way to a 2,000 percent return over the last five years.
Disclaimer: The author has no explicit or implicit holdings in the securities referenced in this article as of the publication date. The writer’s views are expressed in this article, which is subject to the Zumm.org Publishing Guidelines.