In this article, we will discuss the 10 return to office stocks to buy in 2022. If you want to read about similar stocks, you can go to 5 Return-to-Office Stocks to Buy in 2022.
Before discussing the 10 return-to-office stocks to buy in 2022, we would like to highlight some key trends in the corporate sector ever since COVID-triggered lockdowns have been lifted and companies have resumed operating in person.
The Adoption of Cloud-Based CRM Software
One of the major shifts in the corporate sector was the adoption of CRM cloud-based solutions to handle work-intensive tasks. According to a study conducted by SuperOffice, a leading European CRM solutions provider, a spike in the use of mobile CRM software was recorded in 2020 and is on an upwards trajectory since then. Companies are pouring in hefty investments in customer-relationship-management solutions, and according to the above-mentioned study, companies with mobile CRM software were able to meet 65% of their sales quotas, while companies without mobile CRM software met only 22% of their quotas. The study further highlights that in 2008, only 12% of businesses used cloud-based CRM solutions, and as of 2021, this share has skyrocketed to sit at well above 80%. Customer relationship management software revenues have beaten database management systems revenues and are expected to reach over $80 billion by 2025.
Investments Being Poured Into Database Systems
Statista pointed out that the software industry was not one of those that suffered a huge blow from the pandemic. Business and government spending on information technology products and services worldwide came in at $3.7 trillion in 2021, with software solutions accounting for a major chunk of it. Enterprise software spending has increased two-fold over the past decade and amounted to $458 billion in 2019. Even though the pandemic caused these numbers to dip by a small margin, the software market exhibits robustness and is expected to hit $572 billion in 2022, with a plethora of companies investing in database management systems which accounted for $65 billion of total enterprise software revenues in 2020.
Stocks that are bound to benefit from the reopening of businesses include Microsoft Corporation (NASDAQ:MSFT), Salesforce, Inc. (NYSE:CRM), and Workday, Inc. (NYSE:WDAY) among others. Continue reading to explore further stock options to know which companies are serving the corporate sector and are positioned to gain market share as offices reopen and businesses resume physical operations.
Our Methodology
To compile the 10 return to office stocks to buy in 2022, we looked for companies that offer solutions for the corporate sector. We did extensive research on tools and equipment widely used by enterprises to grow their business. Along with each stock we have mentioned the company’s most recent financials, analyst sentiment, and investor sentiment.
The hedge fund sentiment for each stock was derived from Insider Monkey’s database, which as of the fourth quarter of 2021 tracks over 900 elite hedge funds.
With this context in mind, let’s now look at the 10 return to office stocks to buy in 2022.
Return-to-Office Stocks to Buy in 2022
10. Steelcase Inc. (NYSE:SCS)
Number of Hedge Fund Holders: 20
Steelcase Inc. (NYSE:SCS) provides furniture and architectural products in the United States and internationally. The company’s furniture portfolio includes furniture systems, seating, storage, fixed and height-adjustable desks, benches, and tables. As offices reopen their doors to employees, the demand for Steelcase Inc.’s (NYSE:SCS) products is bound to soar, making it one of the best return-to-office stocks to buy in 2022.
On March 23, 2022, Steelcase Inc. (NYSE:SCS) reported earnings for the fiscal fourth quarter of 2022. According to the company’s earnings report, its revenues grew by 11.22% year over year and came in at $753.10 million, outperforming market consensus by $1.43 million.
This May, Steelcase Inc. (NYSE:SCS) announced its plans to acquire HALCON, a leading Minnesota-based designer and manufacturer of precision-tailored wood furniture for the workplace. The transaction is expected to close during the company’s fiscal second quarter of 2023 and involves the acquisition of all outstanding equity interests in HALCON for $127.5 million.
By the end of the fourth quarter of 2021, 20 hedge funds were long Steelcase Inc. (NYSE:SCS) with stakes worth $145.88 million. This is compared to 12 positions in the previous quarter with stakes of $114.54 million. The hedge fund sentiment for the stock is positive.
As of December 31, 2021, Pzena Investment Management is the most bullish hedge fund on Steelcase Inc. (NYSE:SCS) having stakes worth $82.16 million in the company which represents 0.3% of the fund’s Q4 2021 investment portfolio.
9. Boston Properties, Inc. (NYSE:BXP)
Number of Hedge Fund Holders: 22
Boston Properties, Inc. (NYSE:BXP) is organized as a real estate investment trust (REIT), that develops, manages, operates, acquires, and owns a diverse portfolio of primarily Class A office spaces. As companies resume physical operations, investments in office spaces are bound to skyrocket, driving shares of Boston Properties, Inc. (NYSE:BXP). It is ranked ninth among the 10 return-to-office stocks to buy in 2022. On April 21, Mizuho analyst Vikram Malhotra upgraded Boston Properties, Inc. (NYSE:BXP) to Buy from Neutral with a $135 price target on the shares.
Boston Properties, Inc. (NYSE:BXP) reported market-beating earnings for the fiscal first quarter of 2022 this May. The company generated revenues of $754.31 million, up 5.69% year over year, and beat estimates by $23.38 million. Moreover, as of May 6, the stock has surged by 10.13% over the past twelve months.
Hedge funds are upping their stakes in Boston Properties, Inc. (NYSE:BXP). According to Insider Monkey’s database, 22 hedge funds held stakes in Boston Properties, Inc. (NYSE:BXP) at the close of Q4 2021. The total value of these stakes was $1.50 billion, up from $1.47 billion in the prior quarter with 21 positions.
As of the end of last December, TCI Fund Management is the leading shareholder in Boston Properties, Inc. (NYSE:BXP). The fund’s stakes in the REIT were valued at $1.43 billion, which covers 3.22% of its investment portfolio.
Like Microsoft Corporation (NASDAQ:MSFT), Salesforce, Inc. (NYSE:CRM), and Workday, Inc. (NYSE:WDAY), Boston Properties, Inc. (NYSE:BXP) is one of the best return-to-office stocks to buy in 2022.
8. The ODP Corporation (NYSE:ODP)
Number of Hedge Fund Holders: 28
The ODP Corporation (NYSE:ODP) is a leading office furniture provider, and also offers business services, supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses. It is among the 10 return-to-office stocks to buy in 2022 as the company is a one-stop-shop for the corporate sector, offering quality workplace products.
On May 4, The ODP Corporation (NYSE:ODP) released its earnings report which detailed the company’s earnings for the fiscal first quarter of 2022 in which it beat both EPS and revenue estimates. The company reported earnings per share of $1.27, beating estimates by $0.48. The company generated revenues of $2.18 billion and beat revenue estimates by $44.88 million. Moreover, as of May 6, the stock’s year-to-date returns are up 8.01%.
At the close of the fourth quarter of 2021, 28 hedge funds held long positions in The ODP Corporation (NYSE:ODP) with stakes worth $476.53 million. This is compared to 21 hedge funds in Q3 2021, with stakes of $429.70 million. The hedge fund sentiment for the stock is positive.
HG Vora Capital Management is the most prominent stakeholder in The ODP Corporation (NYSE:ODP) with stakes of $196.4 million. The investment covers 7.03% of the hedge fund’s Q4 2021 investment portfolio.
Greenlight Capital mentioned The ODP Corporation (NYSE:ODP) in its fourth-quarter 2021 investor letter. Here is what the firm had to say:
“ODP Corporation (ODP) is a holding company that operates retail brands including Office Depot and OfficeMax, and provides business services and products through a B2B distribution platform. ODP is undergoing a corporate transformation that we expect will conclude over the next year, resulting in the separation of its retail and business solutions divisions. ODP has a strong cash position and an undemanding valuation and is in the process of buying back 20% of its shares by the middle of 2022.
As the company is being broken up, we believe that a sum-of-the-parts analysis is appropriate. In June, Staples offered $1 billion in cash for ODP’s retail division, so we will use that. The remaining B2B business has better prospects and we believe that it deserves a higher multiple. We see $200 million of 2022 pro-forma EBITDA for this segment and by assigning a 7x multiple we arrive at $1.4 billion for this piece. Adding in $400 million of net cash and our estimate of $219 million of current value for its recently announced sale of CompuCom Systems (a technology support and services unit), brings us to just over $3 billion of total value. Using the last reported share count, this equates to about $55 per share.
Not included in our valuation is Varis. ODP has assembled a world-class team to create this nascent digital commerce SaaS and procurement business. We believe Varis is promising and offers ODP shareholders a potentially valuable option. We first acquired ODP shares in February and established a medium-sized position throughout the year at an average price per share of $43.69. ODP shares ended the year at $39.28.”
7. CBRE Group Inc (NYSE:CBRE)
Number of Hedge Fund Holders: 48
CBRE Group, Inc. (NYSE:CBRE) operates as a commercial real estate services and investment company worldwide. It operates through three segments: Advisory Services, Global Workplace Solutions, and Real Estate Investments. It is one of the world’s largest commercial real estate services and investment firms, and is also a leading facility management services provider, offering workplace maintenance solutions all across the globe. CBRE Group Inc (NYSE:CBRE) is bound to experience demand surges as multinational corporations turn to it to provide office upkeep and elite office spaces.
This April, Goldman Sachs analyst Chandni Luthra initiated coverage of CBRE Group, Inc. (NYSE:CBRE) with a Buy rating and a $111 price target. The analyst holds a bullish outlook for the stock and likes the company’s solid sales growth based on macro and micro fundamentals, as well as its earnings profile and strong balance sheets.
On May 5, CBRE Group, Inc. (NYSE:CBRE) reported its earnings for the fiscal first quarter of 2022 in which it beat EPS estimates by $0.31. The company reported earnings per share of $1.39 and generated revenues of $7.33 billion, up 23.47% year over year from $5.94 billion.
By the end of Q4 2021, 48 hedge funds were bullish on CBRE Group, Inc. (NYSE:CBRE) with stakes worth $3.70 billion. This is compared to 37 positions in the prior quarter with stakes of $3.09 billion. The hedge fund sentiment for the stock is positive.
As of December 31, 2021, Harris Associates is the top stakeholder in CBRE Group, Inc. (NYSE:CBRE) owning over 9.74 million shares of stock which equate to a stake value of $1.05 billion.
Ariel Investments, an investment management firm, published its “Ariel International & Ariel Global Fund” third-quarter 2021 investor letter in which it shared its insights on CBRE Group, Inc. (NYSE:CBRE). Here is what the firm said:
“CBRE Group (NYSE: CBRE) is the world’s largest commercial real estate services and investment firm, with leading global market positions in leasing, property sales, occupier outsourcing and valuation businesses. Founded in San Francisco in 1906, CBRE Group operates in more than 100 countries and its diversified client base includes more than 90 of the Fortune 100 companies. As of June 30, 2021, CBRE Investment Management reported $129.1 billion in assets under management.
CBRE Group demonstrated resilience through the pandemic—stabilizing its revenue base by expanding into new lines of business and categories of clients. The company’s strong fundamentals will support its continued growth, as we expect CBRE to benefit from industry tailwinds during a sustained period of recovery…” (Click here to see the full text)
6. Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Holders: 57
Oracle Corporation (NASDAQ:ORCL) provides products and services that address enterprise information technology environments worldwide. On March 15, 2022, the company announced its plans to expand its cloud infrastructure with 11 new compute, networking, and storage services which will allow businesses to optimize operations and manage workloads in a faster and more secure manner.
On April 1, 2022, Daiwa analyst Stephen Bersey initiated coverage of Oracle Corporation (NASDAQ:ORCL) with a Neutral rating and gave the shares a $87 price target. The analyst views an upside for the stock and sees its cloud-based offerings driving the company’s growth in the long term.
This March, Oracle Corporation (NASDAQ:ORCL) reported earnings for the fiscal third quarter of 2022. The company reported earnings per share of $1.13 and generated revenues of $10.51 billion, up 4.23% year over year, and beat revenue estimates by $3.01 million.
In addition to reporting robust earnings, Oracle Corporation (NASDAQ:ORCL) is an attractive value stock pick having a promising dividend yield of 1.70% and a forward price-to-earnings ratio of 15.81 as of May 6. The stock is placed ninth on the 10 return to office stocks to buy in 2022.
Oracle Corporation (NASDAQ:ORCL) was spotted on 57 investment portfolios at the close of Q4 2021. The total stakes of these funds amounted to $4.07 billion, up from $3.47 billion in the previous quarter with 56 positions.
First Eagle Investment Management was the most prominent shareholder in Oracle Corporation (NASDAQ:ORCL) at the end of the fourth quarter of 2021, owning over 25.7 million shares of stock. This amounts to a stake of $2.2 billion which represents 5.61% of the fund’s investment portfolio.
Here is what ClearBridge Investments had to say about Oracle Corporation (NASDAQ:ORCL) in its third-quarter 2021 investor letter:
“While the information technology (IT) sector in the benchmark stalled amid rising rates, our holdings outperformed in relative terms, helped in part by a strong quarter from Oracle, the dominant provider of on-premise database software for large enterprises globally and an increasingly viable cloud competitor. Solid quarterly results, raised guidance, healthy underlying metrics and an attractive valuation contributed to strong performance during the period.”
Oracle Corporation’s (NASDAQ:ORCL) database management system is the most widely used DBMS in the corporate sector, and the stock is expected to soar as businesses resume operations and things go back to the good old days. Other stocks that promise handsome returns in the near and long term include Microsoft Corporation (NASDAQ:MSFT), Salesforce, Inc. (NYSE:CRM), and Workday, Inc. (NYSE:WDAY).
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Disclose. None. 10 Return-to-Office Stocks to Buy in 2022 is originally published on Insider Monkey.
