15 Best Stocks to Buy for 2022 According to Analysts

Published on December 6, 2021 at 11:32 am by Usman Kabir in Hedge Funds, News

In this article, we discuss the 15 best stocks to buy for 2022 according to analysts. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Stocks to Buy for 2022 According to Analysts.

Even as inflation concerns overshadow an otherwise strong post-pandemic economic recovery towards the end of 2021, analysts remain bullish on the growth prospects of the market heading into the new year. David Kostin, the chief equity strategist at investment bank Goldman Sachs, recently said that the equity bull market would continue in the coming months, with the benchmark S&P 500 expected to rise 9% through 2022 to finish the year at 5,100, equating to a total return of 10% including dividends.

Bullish Outlook for 2022

Kostin identified unchanged corporate tax rates, an 8% earnings growth and 9% year-on-year sales growth in the S&P 500, and further investor allocations to stocks as some of the reasons behind the bullish view. According to estimates by the analyst, households in the US, which hold half of over $28 trillion in cash assets, would shift some of this capital into equities in the coming months. Overall, even as interest rates rise, the bank predicts solid growth, even though it has cautioned against risks like lower returns in 2022 compared to this year.

Some of the stocks that look set to continue their impressive growth trajectory in the next few months include Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), among others discussed in detail below.

Luis Louro / shutterstock.com

Our Methodology

The companies that analysts from different investment advisories have recommended as a Buy heading into 2022 were selected for the list.

The business fundamentals of each firm are discussed alongside other details to provide readers with some context for their investment choices.

Hedge fund sentiment was included as a classifier as well. The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey as of the third quarter.

Best Stocks to Buy for 2022 According to Analysts

15. Snap One Holdings Corp. (NASDAQ:SNPO)

Number of Hedge Fund Holders: 10

Snap One Holdings Corp. (NASDAQ:SNPO) provides smart living solutions. Heading into the new year, the company has the potential to beat competitors since it has stockpiled inventory to navigate supply chain issues. It also has an established distribution and branch network, and looks set for higher margins and operating leverage in the new year.

In August, UBS analyst Chris Snyder initiated coverage of Snap One Holdings Corp. (NASDAQ:SNPO) stock with a Buy rating and a price target of $24, identifying the firm as a “high growth vertically integrated play” in the smart homes and building market.

At the end of the third quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $194 million in Snap One Holdings Corp. (NASDAQ:SNPO).

Just like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Snap One Holdings Corp. (NASDAQ:SNPO) is one of the stocks attracting the attention of growth investors.

14. Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY)

Number of Hedge Fund Holders: 19

Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) is a pharma company that develops therapies for patients with rare neurological diseases. Goldman Sachs estimates that the company looks set for a consensus 3-year sales growth rate of 52% and consensus 2023 profit margin of 37%.

Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) posted earnings for the third quarter in early November, reporting a revenue of more than $80 million, up 77% year-on-year and smashing analyst expectations by $0.8 million.

At the end of the third quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $303 million in Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY), up from 15 the preceding quarter worth $173 million.

13. Lattice Semiconductor Corporation (NASDAQ:LSCC)

Number of Hedge Fund Holders: 19

Lattice Semiconductor Corporation (NASDAQ:LSCC) makes and sells semiconductor products. Benchmark, KeyBanc, and Craig-Hallum have all raised price targets on the stock recently and backed the firm to expand software offerings and grow margins heading into 2022.

Lattice Semiconductor Corporation (NASDAQ:LSCC) recently announced that it had acquired Mirametrix, a software firm working on human-machine interaction, in an all-cash transaction. The software firm is also working on advanced artificial intelligence and computer vision apps.

At the end of the third quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $366 million in Lattice Semiconductor Corporation (NASDAQ:LSCC).

In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Lattice Semiconductor Corporation (NASDAQ:LSCC) was one of them. Here is what the fund said:

“Lattice Semiconductor is a vendor of field programmable gate array (FPGA) chips used in personal computers, 5G infrastructure, routers and switches, and servers, to name a few. The company now has a new board and management team—the current CEO joined from leading microprocessor provider Advanced Micro Devices in late 2018—which have embarked on a product-transformation journey. The company has refreshed its FPGA products in the small/low power segment of the market—making it more focused on addressing high return-on-investment use cases centered around power-efficient applications—carving itself a niche behind the two market leaders focused on high-end, Xilinx and Intel Corporation. In addition to providing FPGA chips to data centers and new 5G infrastructure— particularly compelling opportunities given these end markets are and will likely continue benefiting from strong secular tailwinds—we believe the company is well positioned to tap into lowpower/reprogrammable chips as well as industrial and automotive end markets.”

12. MP Materials Corp. (NYSE:MP)

Number of Hedge Fund Holders: 20

MP Materials Corp. (NYSE:MP) is a rare earth mining and processing company. The stock has been affected by a recent report in The Wall Street Journal that claimed China was in the process of establishing a new state-owned rare earths firm to maintain global dominance in the strategic metals department. The US government, which has sought to decrease reliance on Chinese imports, could very well collaborate with MP Materials Corp. (NYSE:MP) to shore up American rare earth supplies in the coming months.

Bank of America analyst Lawson Winder recently initiated coverage of MP Materials Corp. (NYSE:MP) stock with a Buy rating and a price target of $52, underlining the stock as a “critical raw material supplier” for the electric vehicle industry heading into 2022.

At the end of the third quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $2.1 billion in MP Materials Corp. (NYSE:MP), the same as in the preceding quarter worth $2.5 billion.

11. Aspen Technology, Inc. (NASDAQ:AZPN)

Number of Hedge Fund Holders: 20

Aspen Technology, Inc. (NASDAQ:AZPN) provides asset optimization solutions. Bank of America analyst Andrew Obin has backed the company for revenue growth and margin expansion in the coming months based on a $11 billion Emerson takeover deal.

In earnings results for the third quarter, posted in late October, Aspen Technology, Inc. (NASDAQ:AZPN) beat market estimates on earnings per share and revenue by $0.22 and $10.7 million respectively.

At the end of the third quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $620 million in Aspen Technology, Inc. (NASDAQ:AZPN).

In its Q2 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Aspen Technology, Inc. (NASDAQ:AZPN) was one of them. Here is what the fund said:

“While there were no major outliers during the quarter, the largest detractors (includes) Aspen Technology. Aspen Technology, the leading supplier of asset optimization software solutions, also performed well fundamentally although is experiencing a more gradual recovery much like Exponent.”

10. Avid Bioservices, Inc. (NASDAQ:CDMO)

Number of Hedge Fund Holders: 21

Avid Bioservices, Inc. (NASDAQ:CDMO) is a biotech firm based in California. Goldman Sachs had predicted that the firm will grow sales at a rate of 32% in the next three years and expand profit margins by up to 24% during the period.

Avid Bioservices, Inc. (NASDAQ:CDMO) had announced back in October that it would be expanding the manufacturing and contract development service into the cell and gene therapy market through a new facility being built in Costa Mesa. The facility will cost the firm around $75 million and be operational within eighteen months.

At the end of the third quarter of 2021, 99 hedge funds in the database of Insider Monkey held stakes worth $195 million in Avid Bioservices, Inc. (NASDAQ:CDMO), the same as in the previous quarter worth $190 million.

Unlike expensive names like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Avid Bioservices is an affordable growth stock with long-term potential.

In its Q2 2021 investor letter, Laughing Water Capital LP, an asset management firm, highlighted a few stocks and Avid Bioservices, Inc. (NASDAQ:CDMO) was one of them. Here is what the fund said:

“Long-term holding CDMO, our large molecule contract drug manufacturing business, is continuing with its expansion plans in a recession proof industry where supply struggles to keep up with demand. The biggest risk here continues to be an explosion of supply, but CDMO’s long-term regulatory track record acts as a significant competitive advantage. Simply stated, upstarts can’t fake a history of successful operations, and customers want to see a history of successful operations when choosing their manufacturing partner. The balance sheet has been strengthened, the backlog has nearly doubled YoY, and management has indicated they are considering additional opportunities within the core business, as well as in adjacent businesses which would broaden the range of services that Avid provides. In sum, everything is going as planned as management executes, and future opportunity remains abundant.”

9. Halozyme Therapeutics, Inc. (NASDAQ:HALO)

Number of Hedge Fund Holders: 23

Halozyme Therapeutics, Inc. (NASDAQ:HALO) is a biopharma technology platform firm. The company has registered a 145% increase in royalties between June and September this year as the sales of Darzalex, an FDA-approved second-line therapy for multiple myeloma, skyrocket. The company is also on the top of a list of high growth stocks for 2022 released by Goldman Sachs, with consensus 3-year profit margin of 63% and consensus 3-year sales growth rate of 30%.

On December 2, investment advisory Canaccord maintained a Buy rating on Halozyme Therapeutics, Inc. (NASDAQ:HALO) stock and raised the price target to $48 from $27, noting that the firm had achieved “sustainable positive free cash flow from operations”.

At the end of the third quarter of 2021, 23 hedge funds in the database of Insider Monkey held stakes worth $179 million in Halozyme Therapeutics, Inc. (NASDAQ:HALO), up from 20 the preceding quarter worth $194 million.

In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Halozyme Therapeutics, Inc. (NASDAQ:HALO) was one of them. Here is what the fund said:

“Among our top Q4 individual contributors was Halozyme. Halozyme is a biotechnology firm that licenses to pharmaceuticals companies the use of its proprietary enzyme—its ENHANZE® platform—which aids delivery of biologics subcutaneously, as opposed to intravenously. The benefit is improved absorption and convenience to patients and physicians. The company has established partnerships with leading biopharmaceuticals companies—Roche, Johnson & Johnson (JNJ), Bristol-Myers Squibb and Argenx—and ENHANZE® is already used in four approved products. Halozyme’s partnership with JNJ/Genmab has recently borne fruit (higher royalty revenues) as Darzalex Faspro—a multiple myeloma drug which utilizes ENHANZE®—has experienced rapid uptake since receiving FDA approval earlier in 2020. Given additional runway for Faspro adoption and a solid pipeline of clinical trials either underway or set to commence over the near term, we remain confident in the profit cycle ahead.”

8. Pacira BioSciences, Inc. (NASDAQ:PCRX)

Number of Hedge Fund Holders: 24

Pacira BioSciences, Inc. (NASDAQ:PCRX) provides pain management and regenerative health solutions. Analysts expect the company to do well in 2022 based on estimates of Exparel sales. Exparel is a bupivacaine liposome injectable suspension. The firm has already begun producing it commercially at a new facility in Swindon, England.

Pacira BioSciences, Inc. (NASDAQ:PCRX) beat market predictions on earnings per share for the third quarter by $0.07. The firm also grew revenue by more than 8% during the period. It has a market cap of $2.3 billion.

At the end of the third quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $425 million in Pacira BioSciences, Inc. (NASDAQ:PCRX), up from 23 in the previous quarter worth $423 million.

7. Neurocrine Biosciences, Inc. (NASDAQ:NBIX)

Number of Hedge Fund Holders: 31

Neurocrine Biosciences, Inc. (NASDAQ:NBIX) markets treatments for people with various kinds of medical disorders. JPMorgan analyst Anupam Rama recently highlighted the long-term growth potential of the company with regards to Ingrezza, a treatment for tardive dyskinesia developed by Neurocrine. The analyst claims that the peak sales range for the treatment, in a growth market, would lie around $2.5 billion.

In late November, Neurocrine Biosciences, Inc. (NASDAQ:NBIX) announced that it had entered into a strategic collaboration agreement with Sosei Group Corporation, another pharma firm, for the development of drugs for the treatment of neuropsychiatric disorders.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Neurocrine Biosciences, Inc. (NASDAQ:NBIX) with 1.3 million shares worth more than $130 million.

6. StoneCo Ltd. (NASDAQ:STNE)

Number of Hedge Fund Holders: 37

StoneCo Ltd. (NASDAQ: STNE) is a fintech company with a large presence in Brazil. Even though the firm has failed to impress analysts with the third quarter earnings given margin headwinds, it has still managed to grow active payment clients by 200% during the period, a number that highlights how the core business is growing despite acquisitions and near-term problems.

Scotiabank analyst Jason Mollin initiated coverage of StoneCo Ltd. (NASDAQ: STNE) stock with a Sector Perform rating and a price target of $22, underlining that share price of the firm was poised to benefit from Linx integration in 2022.

At the end of the third quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in StoneCo Ltd. (NASDAQ:STNE), down from 44 the preceding quarter worth $2.7 billion.

In addition to Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), StoneCo Ltd. (NASDAQ: STNE) is one of the stocks on the radar of hedge funds.

In its Q2 2021 investor letter, JDP Capital Management, an asset management firm, highlighted a few stocks and StoneCo Ltd. (NASDAQ:STNE) was one of them. Here is what the fund said:

“StoneCo (NYSE: STNE) has been in our portfolio since early 2019 and has appreciated 225% since. In the first half of 2021 the stock was down nearly 20% and was a drag on the fund’s performance.

Stone is a leading fintech company in Brazil that provides back-office software, loans and other financial services to small and medium sized businesses (SMBs). We have discussed Stone in past letters and the company’s “ladder up” from a card processor to a supplier of enterprise software used to sell financial products on top of such as working capital loans.

The company generates a lot of cash that it reinvests to acquire or build new financial products for its customer base. Since we invested, the company has grown the number of SMB clients by 3x, revenue by 2.3x, and net income by 2.2×11.

The pandemic’s impact on SMBs in Brazil has been severe, especially for the many retailers who are only now adopting an e-commerce strategy. In the first half of 2021 Stone increased loss provisions on its lending product, and overall growth has slowed somewhat. The stock’s decline earlier this year was not surprising, but investors are now ignoring progress that has enhanced Stone’s position for coming out much stronger when the recovery begins.

StoneCo Q1 2021 Earnings Call: “Based on (i) our learnings with lockdowns last year, (ii) recent client transactional data and (iii) learnings from the dynamics of countries where vaccines are widespread, we expect that once vaccination scale (which we think will happen in the second half of 2021), the economic recovery will be fast and – although delayed – Brazil is moving in the right direction. For these reasons, we have made an informed decision to be ready for recovery by investing in growth…”

“…In the first quarter, we decided to increase our salesforce headcount by 24%, marketing investments by 33%, customer service and logistics headcount by 32% and technology headcount by 20% in order to be the fastest player when our economy comes back to normal levels.”

“I want to start our presentation by highlighting that Brazil went through a second wave of COVID in the first quarter of ’21, which imposed commerce restrictions in several cities throughout the country. Those restrictions were felt by our clients with average TVP reaching a low in the end of March…

…But similar to the behavior we saw in the comeback from the first lockdown in 2020, we already observed significant and quick recovery with average TPV in May achieving levels above January 2021. As Thiago mentioned, we expect that once vaccinations are scaled, the economy recovery of the country will be fast.”

In terms of COVID recovery opportunities within our portfolio, Stone might be the most “coiled” because the impact on Brazilian small businesses has been so traumatic. In addition, Stone is part of a much larger and fast-moving transition happening in Brazil around the digitalization of financial services. The speed of this transition is unique to Brazil because the Central Bank is actively trying to reduce the country’s previous dependency on a small handful of large banks. Important progress in the first half of 2021 included closing on the long-awaited acquisition of Linx, a mature provider of enterprise software with a large footprint across Brazil. The acquisition will provide Stone meaningful cross-selling opportunities and a more diversified customer base.”

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