In this article, we discuss the 5 best stocks to buy for 2022 according to analysts. If you want to read our detailed analysis of these stocks, go directly to the 15 Best Stocks to Buy for 2022 According to Analysts.
5. Paycom Software, Inc. (NYSE:PAYC)
Number of Hedge Fund Holders: 40
Paycom Software, Inc. (NYSE:PAYC) operates as a cloud-based human capital management solutions provider. Analysts view the stock as the top pick from among a bunch of digital human resource firms because of profitability, cash flow generation, and future growth prospects given the rapid digitization of the business world.
Needham analyst Ryan MacDonald recently raised the price target on Paycom Software, Inc. (NYSE:PAYC) stock to $640 from $495 and kept a Buy rating, underlining that new bookings growth was driving upside for the firm.
At the end of the third quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Paycom Software, Inc. (NYSE:PAYC).
In its Q4 2020 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Paycom Software, Inc. (NYSE:PAYC) was one of them. Here is what the fund said:
“Paycom is a cloud-based SaaS provider for human capital management. Its simple yet innovative single-instance software initially targeted small and mid-size businesses, and it is being adopted widely. The company has a highly repeatable sales process driven by more than 90% customer retention and a solid track record for selling more to existing customers while acquiring new users. We also like Paycom’s founder/CEO and his impressive track record for value-creating reinvestment. Despite the challenges created by the pandemic, revenue grew 14% in the fourth quarter and for 2020. Additionally, we believe Paycom is well-positioned to benefit from digital transformation as more corporate functions move to the cloud.”
4. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 45
Marvell Technology, Inc. (NASDAQ:MRVL) makes and sells integrated circuits and semiconductors. JPMorgan, Needham, Wells Fargo, and Stifel have all raised their price targets on the stock after a solid third quarter earnings beat and 2022 growth prospects given the position of the company as a supplier of key “cloud-optimized silicon” for data infrastructure customers.
Marvell Technology, Inc. (NASDAQ:MRVL) stock has surged over 22% since the announcement of its third quarter earnings results that beat market estimates on earnings per share and revenue by $0.05 and $60 million, respectively.
At the end of the third quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Marvell Technology, Inc. (NASDAQ:MRVL).
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Marvell Technology, Inc. (NASDAQ:MRVL) was one of them. Here is what the fund said:
“We also purchased Marvell Technology Group, in the IT sector, a semiconductor maker with exposure to the fast growing 5G and data center markets whose shares sold off in the latest rotation out of growth stocks. Marvell just acquired data center supplier Inphi, a name we have held in other ClearBridge portfolios, which should increase the chipmaker’s cross-selling opportunities in a strong demand environment for chips.”
3. United Therapeutics Corporation (NASDAQ:UTHR)
Number of Hedge Fund Holders: 52
United Therapeutics Corporation (NASDAQ:UTHR) is a biotech firm that develops products for unmet medical needs. The stock has earned positive coverage from analysts recently given a key drug approval by regulatory bodies and a positive review of the Tyvaso DPI product.
In August, United Therapeutics Corporation (NASDAQ:UTHR) had signed a commercial supply agreement for inhalation profiling devices with MannKind Corporation, a biopharma firm. The agreement lasts until 2026.
At the end of the third quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $2.1 billion in United Therapeutics Corporation (NASDAQ:UTHR), up from 45 the preceding quarter worth $2.3 billion.
2. Zynga Inc. (NASDAQ:ZNGA)
Number of Hedge Fund Holders: 52
Zynga Inc. (NASDAQ:ZNGA) provides social game services. Record bookings and user growth have propelled the firm to beat earnings estimates for the third quarter and analysts expect the firm to do much of the same in the new year as it develops new games and scales operations.
JPMorgan analyst David Karnovsky has an Overweight rating on Zynga Inc. (NASDAQ:ZNGA) stock with a price target of $10. In a recent investor note, the analyst said that the market was not pricing the growth of the gaming market into Zynga shares over the next few months.
At the end of the third quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $603 million in Zynga Inc. (NASDAQ:ZNGA), up from 49 in the previous quarter worth $1 billion.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Zynga Inc. (NASDAQ:ZNGA) was one of them. Here is what the fund said:
“We also added to our position in Zynga. Our multiyear investment campaign in Zynga has been based on a new management team’s ability to drive steady growth in the company’s base portfolio of games, expand margins, reinvigorate the new game development pipeline and use its strong balance sheet to acquire complementary games and studios. Shares have been pressured in recent quarters, presumably because of investor concerns about the company’s moderating growth rate and Apple’s pending new privacy policy which will make it more difficult for Zynga to both efficiently acquire new players and sell advertising in its games. We believe the company has multiple growth levers it can pull in the periods ahead, including the rollout of new games, acquisitions, further penetration into international markets and entry into new gaming categories, to name a few. Furthermore, our research suggests the Apple privacy policy change is manageable for larger mobile game developers such as Zynga. Given our strong conviction in the profit cycle, we used recent weakness to add to our position.”
1. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 62
Datadog, Inc. (NASDAQ:DDOG) owns and runs a monitoring and analytics platform for developers. Analysts view the pace with which the company innovates and deploys new products for enterprise clients as a big plus, backing it to take advantage of the increased spending on migrations to the cloud in the coming months.
Datadog, Inc. (NASDAQ:DDOG) posted earnings for the third quarter on November 4, reporting earnings per share of $0.13, beating estimates by $0.07. The revenue over the period was $270 million, up close to 75% year-on-year.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in Datadog, Inc. (NASDAQ:DDOG) with 5.2 million shares worth more than $740 million.
In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Datadog, Inc. (NASDAQ:DDOG) was one of them. Here is what the fund said:
“We also added to Datadog. Shares of Datadog retreated in Q1 in sympathy with the broader information technology sector. However, the company remains on solid fundamental footing, recently setting a quarterly record for net new customer additions. Datadog’s cloud solutions fill a void left by legacy tools built for on-premise IT infrastructures, enabling it to take share in an underpenetrated, large addressable market. We believe the company’s low-touch land-and-expand customer acquisition model, combined with a steady expanding product portfolio, position it well for strong profit and cash flow growth in the coming years.”
You can also take a peek at 10 Stocks that Helped Warren Buffett Make $4.6 Billion in Dividends and 10 Best Dividend Stocks with Over 5% Yield According to Hedge Funds.
