The 5 best stocks with huge potential to invest in 2022

In this article we provide you with 5 solid investment ideas based on the best stocks with the potential to grow in 2022.

2022 will be a year of great economic challenges around the world. From the challenges that the Covid-19 pandemic still poses, to the change of focus in global monetary policy.

All of these scenarios will have consequences on global stock markets, so your investment decisions will need to be as well-grounded as possible to improve your chances of making money.

In the final part of the article we also tell you how you can invest in the companies mentioned with Freedom24 from freedom Finance, an innovative trading and investment platform with more than 1,000 ,000 of stock assets available from the major exchanges in the US, Europe and Asia.

In addition, as we will tell you later, this European trading platform allows something unusual to date: it makes available to retail investors the possibility of participating in Public Sales Offerings (IPOs or IPOs). . Something that, to date, was reserved for private investment funds and high net worth individuals.

Economic outlook for 2022: 5 key points

There are some key elements that must be taken into account to see the whole forest and not just the trees and their branches. Let's detail 5 of them:

1. Change of approach in the monetary policy of the US Federal Reserve.

High inflation, the highest since the early 1980s of the last century, implies a shift from an expansive policy towards a a gradually more conservative policy that allows for the easing of high prices.

This makes gradual increases in interest rates likely, as well as the cessation of buying corporate debt. So in that scenario there would be less liquidity flowing into the stock markets.

In addition, higher rates could have a recessive effect on an economy that has yet to recover.

All of this could lead to some major correction in the markets as the policy change materializes. An increase of at least 0.25% in interest rates is expected during the first quarter of 2022.

According to a Reuters survey of economists published on January 19, 2022, the Fed will raise rates three times this year to control inflation.

2. Quarterly behavior of the US economy and its labor market

The periodic statistics of the Gross Domestic Product will allow us to know if the momentum of previous quarters is maintained or, on the contrary, that momentum has slowed down due to the impact of the omicron variant of Covid-19.

On the other hand, the consistency of the labor market can shed light on this economic behavior. In particular, claims for unemployment benefits, as well as the number of new nonfarm workers and the unemployment rate.

A continuation of the economic improvement could allow for a softer adjustment of the markets in the face of the imminent change in monetary policy, while a reversal could mean a more severe adjustment.

As stated by Lance Roberts in an analysis published on December 10, 2021 for Investing.com's Stocks Market section:

“While stock prices may deviate from immediate activity, reversals to real economic growth eventually occur. This is because corporate profits are a function of consumer spending, corporate investment, imports and exports.

3. Evolution of the Covid-19 pandemic and its omicron variant

Although much more contagious than the previous ones, apparently omicron is less deadly for adults already immunized with two doses of those vaccines approved by the Administration Agency US Food and Drug Administration, FDA.

However, the impact of new infections and hospitalizations on economic activity should not be lost sight of. At stake is the recent ruling of the US Supreme Court that annuls the federal mandate for vaccination and mandatory testing in companies.

Vaccination is a highly contentious issue in the US, as there are significant sections of the population that distrust science and are unwilling to be immunized.

Despite this, there is cautious optimism. In Deidre McPhillips's note for CNN posted on January 19, 2022, she notes that omicron cases are declining in the US overall, but the wave is far from over in many parts of the country.

4. US Stock Market Election Cycle

There are midterm elections in the US in November 2022 and the ruling political party generally does not do very well in these appointments .

The current administration could lose both houses of the legislature. This could have economic repercussions whose impact on the markets must be taken into account.

On the other hand, historical evidence shows that the stock market tends to go down at this point. So this could be a catalytic event to monitor. Sergei Klebnikov commented on January 19, 2022 for Forbes:

“Years with midterm elections tend to have weaker stock returns overall.”

5. Geopolitical situation in Eastern Europe

The current tensions between Russia and Ukraine pose a very high risk of a war that could have serious repercussions for the US. The country would be forced to show how far it is willing to get involved.

Certainly, the sending of troops is not considered as occurred in Iraq or Afghanistan, but it would put pressure on the country at times of political and economic turbulence.

Karin Strohecker told Reuters on January 25, 2022, how conflict could affect the global economy:

“A potential invasion of Ukraine by neighboring Russia would be felt in a range of markets, from wheat and energy prices and the region's dollar sovereign bonds to safe haven assets and stock markets.”

Apart from considering each of these 5 elements separately, there is a dynamic interaction between them that can lead to multiple scenarios. However we will consider only two general scenarios:

Optimistic scenario: “Soft Landing”

In this case there is a quarterly increase of 0.25% in interest rates starting in March until reaching 0.50% or 0.75% by the end of the year.

Inflationary pressures ease a bit, allowing the Fed to change monetary policy gently gradually.

On the other hand, the US economy manages to resume the pace of recovery that it had in previous quarters with growing participation in the labor market and this allows companies to increase their income and profits.

Regarding the pandemic, despite the high omicron contagion, there is no return to closures or greater restrictions on economic and social activity thanks to a slow but growing vaccination rate.

In fact, as evidenced by Anneken Tappe for CNN Business on January 25, 2022, 4 states have already fully recovered the jobs lost during the pandemic, and others are moving in that direction.

Mixed results are given in the midterm elections with the administration narrowly losing the lower house, but maintaining a balance in the senate.

And finally, common sense prevails and a war in Ukraine is avoided with the US making some minor concessions to Russia.

In this soft landing, stock markets slowly metabolize the change in the monetary outlook.

No apocalyptic crashes as many expect, but perhaps several gradual fixes.

There would be room for big moves in many stocks with good fundamentals, while others with valuations too high for their potential will tend to correct more strongly.

Pessimistic scenario: “Hard Landing”

This scenario assumes greater inflationary pressures that force the Fed to act more quickly on interest rates. The impact on market psychology is more pronounced.

The economy slows further due to higher rates and their impact on credit and consumption, already dampened by high inflation.

Vaccination rates do not improve and the impact of omicron affects the labor market for fear of getting infected. Let's remember that it is no longer mandatory to get vaccinated by federal mandate.

Corrections in the stock market are faster and deeper. Also, in November, the Biden administration loses both chambers by a wide margin.

Geopolitically speaking, Russia could finally attack Ukraine, with the US in a position to show how strong its sanctions and military measures would be.

Markets hate uncertainty and events like these can affect their stability, generating great volatility in share prices.

In this hard landing there is more depth in the market adjustments with a complicated overall picture for the US economy.

A scenario like this would mean greater caution when entering the market, since investment strategies would be affected by increasing volatility.

However, it could present interesting opportunities for short operations in stocks that are heavily overvalued and without fundamental support. You can also make money in the short term when the market goes down.

5 stocks with great potential to invest in 2022

Next, once given the most important macroeconomic keys of the current moment, we present 5 companies whose stocks can be an excellent investment alternative in 2022.

We show you a broad perspective with a technical analysis based on weekly charts of Japanese candlesticks, volume and MACD, as well as some other tools of interest.

Microsoft Corporation (MSFT)

The chart for this NASDAQ-listed tech giant spans a 3-year period, between 2019 and 2022.

Microsoft continues to show solid fundamentals that have kept it on the path of growth.

At the worst moment of the pandemic, in March 2020, it reached a minimum of $132.52 to trade in November 2021 at an all-time high of $349.67; for a solid 163.9%.

The stock closed the January 24 session at $296.37 and is testing a support level near $279.00.

The markets seem to be making a correction due to the complex economic situation in the US and the geopolitical situation in Europe.

In fact, the price broke the uptrend line that the stock has held for the past two years.

Watch how the price behaves around this support level. However, using Fibonacci Retracements on the vertical distance between the mentioned minimum and maximum, we can define a critical retracement area between 38.2% ($269.00) and 61.8% ($215.00). $).

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If the markets continue to correct and there are more shocks, it is likely that the price will move within this band in the short term.

Although the MACD indicator is still in positive territory, a downward crossover of its lines has already occurred and volume is below average at this time. So the technical analysis suggests to be cautious at this precise moment.

Nevertheless, the strength of this company suggests that this setback can be used as an opportunity for buying positions as the unknowns that we discussed in the section "Economic Outlook for 2022" are cleared up.

If there is a “soft landing” scenario for the US economy, after the price stabilizes it could start to grow towards levels close to its all-time high.

For the third quarter of 2021, Microsoft Corporation revenue reached $45.32 billion. Its operating income rose 5.9% to $20.24 billion, while its net income rose 24.6% to $20.51 billion from the prior quarter.

Its earnings per share went from $2.17 to $2.27 for an increase of 4.6%. Its P/E ratio stands at 33.13 while the industry average is 111.39, which is a reasonable valuation and therefore far from speculative prices.

Sunrun Inc. (RUN)

The weekly chart for this NASDAQ-listed solar equipment manufacturer covers a period of just over 2 years, between 2020 and 2022.

Sunrun represents an alternative with a lot of potential, we are probably facing an undervalued stock by the market.

After reaching highs of $82.42 and $100.93 in September 2020 and January 2021 respectively, the stock entered a bearish channel as we can see on the chart.

At the close of the session on January 24, 2022, the share was trading at $27.04.

Currently testing a support level around $24.00. If the stock maintains this level and consolidates, we could begin to see a recovery in its value from the first quarter of 2022.

The MACD indicator is in negative territory with a descending crossover of its lines. The volume, for its part, is below average.

These technical indicators lead us to closely follow the behavior of the action around the mentioned support.

As technical signals for future purchases, it is necessary an upward crossing of the MACD lines on the middle line of the histogram and a volume equal to or greater than the average as the price increases.

For the third quarter of 2021, Sunrun's revenue increased 9.4% to $438.8 million, while its net income increased 158.5% to $24.1 million, coming out of negative territory.

Its earnings per share went from -$0.20 to $0.11, which is a sign of improvement.

Sunrun could grow significantly in 2022 if it overcomes certain business operational challenges and increases its revenues much more. For many analysts, his target price could be around $68.00.

Walt Disney Company (DIS)

The chart for this major global entertainment company listed on the NYSE spans a 2-year period from 2020 to 2022.

Walt Disney has maintained an upward trend for the last two years, from a minimum of $79.07 in March 2020 to a maximum of $203.02 in March 2021 for a growth of 156.8%.

From there, the price fell slightly and entered a lateral channel, until breaking the trend line in September 2021.

Since November, the price has entered a short-term downward trend mainly motivated by the slowdown in growth in streaming service subscribers.

However, Walt Disney is expected to increase its international efforts to attract more customers from its extensive catalogue, as well as with the production of new film content.

It has a solid base of 180 million subscribers to its streaming services, with the Disney+ platform being a resounding success.

And if the pandemic does not force restrictions on aspects such as travel, it could increase its income with visits to its network of theme parks, which contributed approximately 40% of its income before the appearance of Covid-19 .

We can use Fibonacci Retracements to get a broad perspective of retracement levels between the two-year low and high, establishing a critical area between 38.2% ($155.00) and 61.8 % ($127.00).

In fact, the price is currently in this critical zone. By the close of the session on January 24, 2022, the share was trading at $137.44.

If there are no major disturbances in the economy, it is likely that the stock will remain in this range and from there it can start to grow. Otherwise, the price could break this important psychological level of 61.8% and go to the next support around $108.00.

The MACD indicator is in the negative zone and the volume is below its average. The two technical warning signals for buy positions are the upward crossing of the MACD lines on the central line of the histogram and a volume equal to or greater than the average.

Remember that significant price movements would be accompanied by a palpable increase in volume. Many analysts place their price target around $200.00.

For the fiscal year ending October 2, 2021, Walt Disney's revenue increased 3% to $67.42 billion. However, the company must improve its margins and expand its streaming activity much more to better remunerate its shareholders.

Exxon Mobil Corp. (XOM)

Chart of the NYSE-listed oil and gas energy company spans an 8-year period, 2014-2022.

After having reached a maximum of $104.72 in July 2014, the stock entered a downward trend for the next 6 years until reaching a minimum of $31.11 in October 2020 (-70.3%) .

Crude prices have declined since mid-2014 from levels above $100.00 per barrel to average levels between $50.00 and $60.00 in the following years.

This profoundly affected the company's performance and was exacerbated by the Covid-19 pandemic in March 2020. The West Texas Intermediate crude futures contract price hit an unrealistic -$40.32 per barrel in April of 2020.

However, the recovery in black gold prices since then, as well as the gradual reopening of the US economy, has allowed the company to increase its profits.

The stock is in an intermediate uptrend with a price of $72.78 at the close of the session on January 24, which has already broken the primary downtrend of previous years.

On the other hand, the MACD is already in positive territory with an ascending crossover of its lines. It should be noted how strong the volume is at the close of the coming weeks, but if the price consolidates on this crossover trend, the stock could increase its value much more.

The next critical resistance level is around $95.00 per share, so this could be a good time to go long.

On the same date, the price of crude oil was trading at $83.31 per barrel. The consensus of analysts is a scenario of high oil prices in the medium term, especially if the economic opening returns to normal. In addition, geopolitical tensions with Russia, one of the world's largest producers, could reinforce this trend.

According to the words of its CEO, Darren Woods, regarding future dividend distributions:

“We hope that the company's good cash flow forecasts will allow us to increase shareholder remuneration by up to 10,000 million through a share buyback program in a period of 12 to 24 months from 2022”.

On the other hand, the company intends to implement an ambitious investment plan to double its cash flow and profits by 2027. Annual capital expenditure is estimated at between 20 and 25 billion dollars per year until that year.

So the prospects for Exxon Mobil are very good. Many analysts anticipated its current share price levels and it is estimated that there is room for further growth.

Virgin Galactic Holdings Inc. (SPCE)

Chart of the NYSE-listed commercial space vehicle manufacturing and operating company spans a 2-year period, 2020-2022.

In the last two years, this stock has shown great volatility, registering vertiginous ascents accompanied by fairly rapid falls.

It fluctuated between a maximum of 62.80 in February 2021 to a minimum of $14.27 in May of that same year, for a decrease of 77.3%. It then returned to a high of $57.51 in June 2021, for an increase of 303.0% from the previous low.

Currently the stock is in a downtrend, trading at price levels similar to those at the end of 2019. For the January 24 session it closed at $8.60 per share and tests the support level around 7, $00.

The MACD indicator is in negative territory, while volume is below its average at the moment, suggesting technical weakness.

If the stock holds this support level and gains momentum to go to the next level around $14.00, the medium-term growth outlook would potentially be around $29.00 per share.

According to the plans, the company is on schedule to launch commercial flights starting in the fourth quarter of 2022.

For all these reasons, the stock is thought to be undervalued by the market due to the commercial potential of suborbital space travel. As is known, Virgin Galactic has already pre-sold some 700 trips for this product.

The value of each ticket is expected to reach $450,000, which would generate gross sales for the company of $315 million.

In fact, according to the recent “Suborbital Space Tourism Market Study” issued through Research & Markets in October 2021:

“The global suborbital space tourism market is estimated to reach $396.6 million by 2031, with a compound annual growth rate (CAGR) of 24.46% over the forecast period 2021-2031.”

The volatility shown by the stock is probably due to overly optimistic expectations about the start of business trips.

A product of this nature requires large capital investments in the development of space vehicles and technology to ensure a comfortable and safe experience for future travelers.

Whether Virgin Galactic can achieve this in the short term or not is the unknown to be resolved by 2022 in this highly competitive high-end market. The potential is huge if you pull it off, even though the competition is tremendous.

How to buy the shares mentioned with Freedom24?

If you want to invest in the promising shares that we have presented in this article, the option recommended by EL PAÍS FINANCIERO is the innovative Freedom24 trading platform from Freedom Finance (https://freedom24.com/).

Peter Lynch, one of the most successful investors of recent decades, has left some basic investment principles to posterity. One of the most important is to invest in stocks before in another asset.

Stocks are the asset par excellence, the one with the best average performance over time.

And precisely Freedom24 has 3 qualities highly sought after by any retail investor who wishes to invest in shares:

Your money is safe with a highly regulated European broker

Freedom Finance Europe Ltd., is the European subsidiary of Freedom Holding Corp., the only European broker listed on the NASDAQ (FRHC).

It has a European CySEC license CIF 275/15 issued on 05-20-2015 and a long-term credit rating "B" from Standard & Poor's Global Ratings.

Reports to 3 regulators: Federal Financial Supervisory Authority (BaFin) of Germany, Cyprus Securities and Exchange Commission (CySEC) and U. S. Securities and Exchange Commission (SEC) of the USA. In Spain Freedom24 is registered with the Commission Nacional del Mercado de Valores, with registration number 4547 and license to offer investment services throughout the European economic area. In addition, it has offices in Germany, Spain, Greece and Cyprus.

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Their commissions are extremely low

Currently Freedom24 offers a promotion for new clients of 0% commissions on your trades for 30 days.

Then, you go to the type of account of your choice among 3 different plans: Smart, Fix and Super, which adapt to the investor's transactional profile. In the most “expensive” plan, the commission for buying a share is only €0.02.

Wide range of products and investment in IPOs

You have access to more than 1,000,000 stock assets including shares, ETFs, bonds, futures and options on the world's most important exchanges.

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At a statistical level, the average growth in the share price of the IPOs offered by Freedom24 once the lock-up period of +59% has ended, as of January 10 of 2022. The possibility of obtaining returns of up to 3 digits through IPOs is within the reach of all investors.

Important: the allocation of shares in Freedom24 IPOs

It is important to mention that in Freedom24 each client has a maximum allocation of shares that they can acquire in an IPO. As it is an exclusive product with limited availability, the platform must set purchase limits. These limits are calculated according to the "rating" of each client, a scale that is established transparently based on the portfolio and level of activity.

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With the 5 investment ideas that we have provided and a powerful trading and investment platform like Freedom24 we hope you can obtain excellent returns on 2022.

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