One of the most time intensive aspects of investing is finding the best stocks to buy that fit in with your investment strategy. After all, between the Nasdaq and New York Stock Exchange, there are a whopping 6,100 different stocks to choose from. With so many choices, where do you start?
The list below outlines the top stocks to buy in January 2022.
Best Stocks to Buy Right Now
Not all stocks are created equal, and with a massive number of retail investors flooding into the market since the new year, it has been a bit of a wild ride. With unprecedented gains being created in the market, many expect a continuation of this recent increase in investment activity. At the moment, there are five types of stocks you should be looking into:
- Growth. 2021 has been a year of growth so far. With stimulus boosting the United States economy and a flood of new retail investors making their first trades, money is piling into publicly traded companies at the moment, with the top stocks on the market growing at compelling rates.
- Green. There has been a major change of guard in Washington, and changes in D.C. ultimately equate to changes in the stock market. The Democratic party, led by President Joe Biden and in control of all branches of government, has been clear about its views toward climate change and changes it believes need to take place in the energy industry. As such, companies focused on clean, renewable energy are doing overwhelmingly well.
- E-Commerce. The coronavirus pandemic led to a surge in shopping online. Many consumers who would never have purchased anything online suddenly found themselves buying groceries, gifts, clothing, and even medicine over the Internet. Moreover, many liked the experience and might not go back. As a result, e-commerce has been booming and will likely continue to do so.
- Travel. Vaccines are becoming increasingly available and more than half of Americans are now fully vaccinated. As more people receive their vaccines, they’ll not only be more comfortable traveling, they’ll be eager to do so after a long stay at home. As a result, the best travel stocks are likely to see a strong rebound ahead.
- Health Care. Health care stocks are generating quite a bit of excitement. While most companies working on COVID-19 vaccines and therapeutics are realizing overvaluations, there are plenty of opportunities to invest in companies across the sector, which is growing at a staggering rate.
With that in mind, here are nine of the best stocks to look into in January of 2022:
1. Amazon (NASDAQ: AMZN)
The coronavirus pandemic is a horrible thing. More than 219 million people around the world have gotten sick, with more than 4.55 million people losing their lives. There’s no downplaying the seriousness of this illness.
However, even the darkest cloud has a silver lining.
Online retail companies have become prime beneficiaries of the crisis. For months, consumers were told to stay at home, only leaving the confines of their homes in search of absolute necessities.
While there were already growing numbers of consumers shopping online, travel restrictions and temporary lockdowns led to a tidal wave of consumers who shifted from brick-and-mortar shopping to shopping on the web. Naturally Amazon.com, one of the most successful e-commerce websites in the world, seemed likely to benefit greatly from this trend — and benefit it has.
Since June 2020, the company’s stock price has climbed from around $2,545 per share to nearly $3,500 per share. With this kind of growth, the e-commerce pioneer has not only become one of the largest companies in the world, but one of the strongest growth stocks on the market today.
As a result of the growth, the stock trades with a pretty high valuation, with a price-to-earnings (P/E) ratio of around 60, compared to the e-commerce average of around 55. However, the high price-to-earnings ratio is offset by the outsize earnings and revenue growth seen from Amazon.com when compared to other e-commerce players.
Perhaps that’s why all 32 analysts covering the stock rate it a Buy according to TipRanks, which outlines an average price target of a whopping $4,202.39 per share.
All in all, with e-commerce dominance at a time when more and more people are shopping online, Amazon.com stock is one to watch closely.
2. Upwork (NASDAQ: UPWK)
Upwork is a tech play that’s focused on connecting contractors and those in need of contract work in the gig economy. Those who need articles written, graphics created, websites built, voiceovers added to videos, and a long list of other services will find talented experts in these crafts on the company’s website.
Of course, Upwork needs to make money in the process, and it makes plenty. In order to use the platform, freelancers must agree to the following fee schedule:
- Freelancers pay 20% of their billings to the company for the first $500 paid by a new customer.
- From $500.01 to $10,000 in billings of the customer, the platform charges a fee equal to 10% of billings.
- Finally, for all billings of a single customer with total billings of $10,000.01 or more, the company takes a 5% cut.
Prior to the coronavirus, the gig economy was already taking off. Consumers who have dreamed of working from home finally had a way to do so. Then, as the world shut down, the gig economy boomed.
Businesses deemed to be nonessential were forced to close their doors. This left many workers without a job and standing in unemployment lines of record length. Many of these displaced workers began looking for work-from-home opportunities, leading to a flood of demand for Upwork and its competitors. Moreover, this increased demand is likely to continue.
There have also been major changes for employers. Employers now have access to talent around the world, not just in close proximity to the office. What’s more, companies are finding that not only do workers prefer to work remotely, but they’re more effective when they do, according to Business News Daily. COVID-19 led countless companies to realize this, many of which say they’ll never bring employees back into the office, according to CNN.
Analysts absolutely love this stock because of the growing work-from-home trend and Upwork’s ability to capitalize on it, demonstrated by its significant revenue and earnings growth. According to TipRanks, four analysts cover the stock, all of whom rate it a Buy. Price targets range from $57 and $76 per share, averaging out to $67.50 and suggesting the potential for nearly 50% gains compared to current levels. Granted, you shouldn’t blindly follow Wall Street analysts, but these ratings are encouraging.
The bottom line here is simple. Upwork has seen tremendous growth already, and considering the flourishing of the gig economy and the trend toward remote work, that growth is likely to continue. As a result, the stock is one to pay close attention to.
3. Apple (NASDAQ: AAPL)
Staying on the tech trend, Apple is next on the list. With a market cap of more than $2.46 trillion, the tech giant is one of the largest companies in the world, the largest company listed on the Dow Jones Industrial Average, and like the stocks mentioned above and the majority of those mentioned below, it has become a household name.
As you likely know, Apple is the creator of the iPhone, iPad, and Mac computers, with the iPhone representing the vast majority of the company’s revenue.
The stock had a strong start to the year, but gains tapered off in late January and again in late February, bringing the stock down to what many believe is a discount. While the stock has rebounded from the lows, there’s still a strong argument that the stock is undervalued.
In big tech, there are few growth stories that are quite as strong as Apple’s, especially in the fiscal third quarter of 2021. Here are some key stats from the earnings report:
- Revenue. The company generated $81.43 billion in revenue, up 36.44% on a year-over-year basis.
- Net Income. Net income came in at 21.74 billion, up 93.2% year-over-year.
- Earnings Per Share (EPS). Finally, EPS came in at $1.3, up 100% year-over-year.
All of these figures beat analyst expectations by wide margins.
Some argue that the growth is the result of Apple’s status as the leading global device manufacturer. Others argue that the growth was fueled by spending as a result of stimulus payments given to U.S. consumers. Some say it’s a mix of the two.
No matter where it came from, this growth is impressive.
It’s these impressive numbers that form the basis for the overwhelmingly positive analyst opinions on the stock. Out of 23 analysts covering AAPL stock, 17 rate it a Buy, six rate it a Hold, and none rate it a Sell, with an average price target of $167.09 per share, representing the potential for more than 12% gains, according to TipRanks.
Notwithstanding recent volatility, the stock is currently trading with a relatively high valuation when compared to the industry average. However, like other big tech names on this list, the high valuation associated with the stock is offset by the strong growth seen in revenue and earnings, growth that many believe will continue for the foreseeable future.
4. Gevo (NASDAQ: GEVO)
Gevo isn’t necessarily the type of company you would expect to see on a list like this. The company is anything but profitable, and the stock was still trading in the penny category in late 2020.
Nonetheless, Gevo has seen an exceptional rise thus far in 2021. Year to date, GEVO stock has climbed by more than 60%, and that’s after recent profit taking as the stock touched record highs.
Gevo is a clean energy company, but the company isn’t making solar panels, windmills, or batteries. Gevo is focused on the production of clean, renewable fuels, making it an interesting take on exposure to energy stocks.
Over the past several years, the company has perfected technology that allows it to turn renewable feedstock like waste wood and food scraps into clean, renewable fuels, including jet fuels that have been used to power commercial flights.
Recently, Gevo has been getting quite a bit of attention from proponents of clean energy and demand from airlines and fuel distributors around the world. That attention has been amplified in recent months as a result of a change in political tides.
With President Joe Biden in the White House and Democrats in control of Congress, many expect there to be major clean energy legislation in the coming months. As a result, companies that operate in the clean energy space are likely to benefit from the following:
- Grants. Grants will likely be provided to clean energy companies like Gevo to fund research and to increase the supply of clean energy products.
- Tax Cuts. The federal government is likely to further support clean energy companies through tax policies that benefit green energy producers, helping these companies to keep funds in house and offer more competitive pricing of clean energy to consumers.
- Increasing Demand. Many expect tax credits to be provided to consumers who take advantage of clean energy products. Should this be the case, consumer demand for these products will likely increase — yet another plus for Gevo.
Expecting a rise in demand, Gevo is in the process of building its first Net Zero production facility, where it will be able to produce massive amounts of clean fuel with a net zero carbon footprint. The facility is expected to be completed and operational by the end of 2021. This has quite a bit to do with its lack of profitability. The company is following a growth business model like that of Amazon.com, investing in infrastructure early to stay ahead of the curve later.
At the same time, Gevo has a strong balance sheet due to a recent capital raise, and with the clean energy movement gaining steam, it has plenty of support from the retail investing community. This, combined with a recent dip in price that creates a compelling value opportunity, makes Gevo stock worth its position on your watchlist.
5. The Walt Disney Company (NYSE: DIS)
The Walt Disney Company is yet another household name on the list. Even if you’ve never been to Disney World or DisneyLand, you likely grew up watching Mickey Mouse or another Disney character bouncing around on your television screen.
Moreover, if you’re like most millennials who have cut the cable cord and chosen to stream entertainment, you’ve at least heard about Disney+, if you’re not already one of its growing number of subscribers.
When it comes to investing in the company, there are two big reasons you may want to consider diving in:
- COVID-19 Recovery. Disney felt quite a bit of pain as a result of COVID-19. Without consumers wanting to travel, its theme parks, hotels, and cruise lines have been struggling. The company’s theme parks and travel attractions are open. Although Disney hasn’t officially updated its capacity allowance, capacity has increased to about 50%, according to TheDisInsider. Around the world, however, consumers dream about going to Walt Disney theme parks, and considering the state of the COVID-19 crisis, demand is likely to boom ahead when capacity restrictions are relaxed, leading to a significant rebound.
- Streaming Entertainment. One of the major drivers in Disney’s recent stock growth has to do with its activities in the streaming entertainment space, which it has knocked out of the park. Launched in November 2019, Disney+ had more than 116 million subscribers as of September 2021, up from 86.8 million in December 2020 and 60.5 million in early August 2020.
Between a likely recovery in Disney’s travel-related business and incredible growth in the company’s streaming entertainment business, the company is firing on all cylinders.
Although it’s never a good idea to blindly follow analyst opinions, it is helpful to use their opinions as a source of validation for your own. When it comes to The Walt Disney Company, analysts seem to love the stock: 19 analysts currently cover it, with 16 rating it a Buy and three rating it a Hold with an average price target of $217 per share, representing the potential for more than 17% growth over the next year.
All in all, Disney has struggled from time to time, but you can never count the stock out. The company has a history of pivoting and making changes that are best for its growth and its investors. That’s not likely to change. The Walt Disney Company has plenty of potential for dramatic growth ahead.
6. Netflix (NASDAQ: NFLX)
Netflix, like many others on this list, is a household name. The company rose to fame by giving consumers the ability to stream entertainment, rather than buy it or subscribe to cable services. In fact, the company is known as one of the pioneers of streaming video.
As with other home entertainment stocks, COVID-19 proved to be a positive for the company, resulting in increased subscribers, revenue, and earnings. However, early 2021 wasn’t so great for the company.
As competition continues to flood into the space, many wondered if the company had what it takes to maintain its leadership position. Its stock suffered steep declines from mid-April through mid-May.
However, those declines proved to be short-lived, with the stock currently trading above early-year highs.
Although it has made up for the losses, there’s a strong argument that there’s plenty of room left in the recovery, especially with Netflix continuing to pour cash into the development of exclusive content.
Moreover, the concept of cord cutting isn’t expected to dissipate any time soon. In fact, as the cost of cable services continues to climb and consumers focus on saving money, cord cutting is likely to continue.
Sure, there’s plenty of competition on the playing field, but it’s hard to bet against a pioneer, especially one with a long history of investing in content, technology, and marketing strategies that have yielded fruit.
Maybe that’s why analysts love the stock. Of the 33 analysts covering the stock, 23 rate it a Buy, seven rate it a Hold, and only three rate it a Sell. The average price target of $617.93 represents the potential for nearly 5% gains over the next year. Moreover, considering the strong growth the stock saw over the past month, and stellar second quarter results, analysts are likely to update their price targets in the positive direction relatively soon.
All told, Netflix has competition to contend with, but as it continues to develop market-leading content, offer services at competitive prices, and expand its membership base through effective marketing strategies, the stock has plenty more room for growth.
7. NVIDIA (NASDAQ: NVDA)
NVIDIA isn’t necessarily a household name — that is, unless you’re a tech junky. However, if you use technology at all, there’s a strong chance you are an end user of the company’s products.
The company is the inventor of the Graphics Processing Unit, or GPU, a computer chip that was designed to expand the capabilities of computers and game consoles to provide improved graphics for the end user.
However, the GPU has gone far beyond what NVIDIA probably ever expected it would.
Today, the company’s high-tech computer chips are used in various servers and data centers. Given the company’s dominance in the data-center space, chances are its chips are being used in the server that’s feeding you the content you’re reading right now.
As technological innovation continues, GPUs are becoming increasingly important. Over the years, the company has proven that through continued innovation, its chips are likely to stay on top of the competition.
Moving forward, these chips are going to become more ingrained in day-to-day life, playing important roles in the development of artificial intelligence, autonomous driving, and other technologies of the future.
Now might just be the perfect time to get involved.
NVIDIA completed a four-for-one stock split on July 20, when shareholders received four shares at a quarter of the current price in exchange for each single share they own. The move is far more than cosmetic.
With the stock trading over $800 per share, access to the stock has been limited for those with less money to invest. The split effectively cut the price of each single share by 75%, bringing it down to around $200 and making it a more accessible price for investors with smaller portfolios.
This move worked wonders, leading a rush in demand for the stock and resulting in a spike in value.
In any case, NVDA is a stock well worth watching. Not only is the company a pioneer in the high-end computer graphics and processing space, it continues to innovate, consistently staying one step ahead of the competition and making the stock one worth watching closely.
8. United Airlines (NASDAQ: UAL)
United Airlines is a pure COVID-19 travel recovery play. With control over 12% of the United States domestic air travel market, it’s a name you likely know well or at least have heard of.
The airline industry has been suffering for some time. Who wants to be breathing recycled air thousands of feet in the air in a metal tube with hundreds of people they don’t know during the COVID-19 crisis? Nobody, that’s who.
Like all other publicly traded airline companies, United Airlines lost billions of dollars in 2020. These dramatic losses have led to a seriously low share price, which will prove to be a massive undervaluation as the travel sector continues to recover.
That could happen sooner than you think.
Vaccines have been administered to consumers for some time, with more than 179 million Americans fully vaccinated according to Google. The availability of these vaccines increases by the day. The COVID-19 new case trend slowed significantly early this year, with growth in case counts falling to levels that haven’t been recorded since before March 2020. While there has been somewhat of a resurgence in cases, many believe that thanks to the widespread availability of vaccines, the second wave of the virus will be short-lived.
That’s great news for airlines and any other stock in the travel industry.
As COVID-19 cases continue to wane, people aren’t just going to be more likely to travel, they’re going to be itching for it. If you’re like most people, you’ve been stuck in your house for a year. Maybe you decided to abort the annual vacation plans, you haven’t seen your family much, and you’re going stir crazy. So, what do you need?
As soon as the pandemic is largely under control, consumers are going to start traveling again, and I’m expecting to see a big boom in the sector. Moreover, considering the economic impact of COVID-19, consumers are probably going to be looking for the best deals they can get on travel, which bodes well for United because it’s a discount airline.
At the same time, while Delta Airlines and Southwest Airlines have already begun their recovery in a big way, United Airlines has only seen minimal growth since mid-pandemic lows. Its stock has seen the slowest recovery in the industry since the start of the COVID-19 pandemic, leading to an extreme undervaluation that would be hard for most value investors to ignore.
Not to mention, Southwest Airlines has been forced to cancel several flights as a result of a workforce shortage, which gives its competition — namely United Airlines — an opportunity to jump in and pick up the slack.
There’s no guarantee that COVID-19 will be under control any time soon, nor a guarantee that the travel industry will recover in the near term. However, all signs point to these being the most probable outcomes, making United Airlines a stock that shouldn’t be overlooked.
9. Bio-Rad Laboratories (NYSE: BIO)
Given current times, the medical sector garners quite a bit of conversation. While the majority of focus is being placed on companies working to develop vaccines and therapeutics for the coronavirus, a huge opportunity is emerging surrounding the technology that makes the development of these products possible.
Bio-Rad Laboratories doesn’t develop vaccines or therapeutics. Instead, it focuses on providing other companies in the biotechnology space with the technology, documentation, and equipment needed to develop new therapeutics and vaccines.
This puts the company in the perfect position.
For some time now, the U.S. has been going through an evolution in medicine. New technologies have given experts an understanding of how the human body ticks like never before, paving the way for the development of cures for some of the world’s most devastating conditions.
Just 30 years ago, hepatitis C was a death sentence. Today, it can be cured. The same goes for a wide array of ailments for which advancements in medicine have led to cures or better treatments.
For all of this to happen, clinical trials must take place and equipment and data must be acquired. As such, companies like Bio-Rad Laboratories realize high levels of demand.
As of the second quarter of 2021, revenue came in at $715.93 million representing year-over-year growth of more than 30%. As the medical community works to solve more significant problems, the company’s leading products and services will continue to experience high levels of demand.
At the moment, only one analyst covers the stock, but that coverage carries a Buy rating and a price target of $930 per share, representing the potential for more than 15% growth in the stock over the next year.
All told, Bio-Rad Laboratories offers up a long list of in-demand products in the biotechnology space. With expectations for a continuation of the recent innovation in the medical space, there’s no reason to expect any slowing in the company’s growth, making it a stock that’s hard to ignore.
Avoid Playing the Short Squeezes
One of the hottest topics on Wall Street so far in 2021 has been the Big Short Squeeze, an event that saw retail investors take aim at hedge funds that profit from taking large short positions in stocks.
By banding together and purchasing a massive number of shares in these stocks, retail investors on the WallStreetBets subreddit forced massive short squeezes, causing incredible losses for hedge funds and leading to just as significant profitability for many of the retail investors involved.
As a result, GameStop, Blackberry, AMC, and even Canadian cannabis company Sundial Growers saw dramatic gains. Millions of newcomers started to follow the WallStreetBets subreddit in hopes of tapping into these incredible gains.
Unfortunately, the short squeeze is a complex trade to play, and a large number of the newcomers to the stock market bought in at the wrong time, losing a massive amount of money on the downswing.
This has even led to a rush into Bitcoin after WallStreetBets posted about the electric vehicle maker Tesla accepting Bitcoin as a form of payment, becoming the first vehicle manufacturer to do so.
Following the herd may seem like an exciting concept, especially when it seems as though the herd is winning. But the reality is that by following the herd on these highly volatile moves, you’re opening the door to potentially significant losses, especially if you’re not an experienced stock trader.
Wise investment decisions, built on research and made for the long run, are the decisions that ultimately result in wealth for those who make them.
Whether you’re looking to invest in the stock market for the first time or you want to rebalance your portfolio to take advantage of the hottest trends on Wall Street, the 9 stocks listed above are compelling opportunities to look into.
You’ll notice that each of the stocks on the list fall into the big tech and e-commerce, travel, clean energy, or health care categories. These categories seem to be the home of the biggest opportunities on the market today.
Nonetheless, you should never blindly follow the opinions of any expert. Doing your own due diligence is the only tried-and-true way to make successful long-term investments.
Disclaimer: The author currently has no positions in any stock mentioned herein nor any intention to hold any positions within the next 72 hours. The views expressed are those of the author of the article and not necessarily those of other members of the Money Crashers team or Money Crashers as a whole. This article was written by Joshua Rodriguez, who shared his honest opinion of the companies mentioned. However, this article should not be viewed as a solicitation to purchase shares in any security and should only be used for entertainment and informational purposes. Investors should consult a financial advisor or do their own due diligence before making any investment decision.