In this article, we will be taking a look at Morgan Stanley’s top 5 stock picks for 2022. To read our detailed analysis on Morgan Stanley’s stock picks and their performance, you can go directly to see Morgan Stanley’s Top 10 Stock Picks for 2022.
5۔ Tesla Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla Inc. (NASDAQ:TSLA) is another automobile manufacturer among Morgan Stanley’s top stock picks for 2022. The company works with electric vehicles and energy generation and storage systems. Analyst Adam Jonas at Morgan Stanley ranked it fourth on the firm’s list of favorite EV stocks for 2022.
Jonas also holds an Overweight rating on Tesla Inc. (NASDAQ:TSLA) shares as of this January.
In the third quarter of 2021, 60 hedge funds were long Tesla Inc. (NASDAQ:TSLA), with a total stake value of $10.6 billion.
4. TransDigm Group Incorporated (NYSE:TDG)
Number of Hedge Fund Holders: 63
TransDigm Group Incorporated (NYSE:TDG) is a designer and producer of aircraft components. In the aerospace sector, the company was named the top pick for Morgan Stanley in North America for 2022 by analyst Kristine Liwag. As such, it is among Morgan Stanley’s top stock picks for 2022.
Analyst Liwag also holds an Overweight rating on TransDigm Group Incorporated (NYSE:TDG) shares as of December 2021.
For the fiscal fourth quarter, TransDigm Group Incorporated (NYSE:TDG) had an EPS of $4.25, beating estimates by $0.55. Its revenue was $1.28 billion.
Our data shows 63 hedge funds holding stakes in TransDigm Group Incorporated (NYSE:TDG) in the third quarter, compared to 57 hedge funds in the previous quarter.
3. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 88
Wells Fargo & Company (NYSE:WFC) is a financial services company with about $1.9 trillion in assets. It serves one in three US households and over 10% of all middle market companies in the US. CNBC has reported that the stock is among Morgan Stanley’s top stock picks for 2022, being a top play for rate hikes because of its rate-sensitive, attractive valuation.
Analyst Betsy Graseck at Morgan Stanley upgraded Wells Fargo & Company (NYSE:WFC) shares to Overweight in December 2021.
The EPS for Wells Fargo & Company (NYSE:WFC) in the fiscal fourth quarter was $1.25, while its revenue was $20.86 billion. Both beat estimates by $0.25 and $2.19 billion, respectively.
Insider Monkey’s hedge fund data for Wells Fargo & Company (NYSE:WFC) shows 88 hedge funds long the stock in the third quarter. Their total stake value was $6.2 billion.
Davis Funds, an investment management firm, mentioned Wells Fargo & Company (NYSE:WFC) in its third-quarter 2021 investor letter. Here’s what they said:
“…This second chart highlights that financials remain the cheapest part of the market today and continue to be extremely attractive. Strong capital ratios, conservative lending practices, already recordlow interest rates and now a strengthening economy, all paired with low valuations, bode well for future returns.
Take our top financials holding in Wells Fargo, for instance. Wells Fargo is trading at 1.3x tangible book value, while we expect return on equity (ROE) to be in the mid-to-high teens over time. Even in this low-rate environment, the current multiple is only 12x 2021 owner earnings, and our IRR estimate is 12–13%. Wells Fargo has performed well this year, up 51% year-to-date, yet still looks very attractive, which speaks to how undervalued it was and why it is so important to be patient when investing in high-quality companies trading at low valuations. Rather than invest on the basis of unpredictable near-term catalysts, we prefer to be patient as earnings and cash build up, even if the stock price does not immediately reflect the economic reality. We continue to like our positions in financials.”
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 120
Apple Inc. (NASDAQ:AAPL) is an information technology company that manufactures and markets smartphones, computers, tablets, wearables, and accessories under the Apple brand. CNBC’s report in December cemented the stock’s position as one of Morgan Stanley’s top stock picks for 2022, with analysts labeling it a smart bet for the year.
As of December 2021, Apple Inc. (NASDAQ:AAPL) has an Overweight rating at Morgan Stanley, placed by analyst Katy Hubert.
In the fiscal fourth quarter of 2021, the company’s EPS was $1.24, in line with estimates. Its revenue was $83.36 billion. Apple Inc. (NASDAQ:AAPL) has also gained 21.5% in the past six months.
According to our research, 120 hedge funds held stakes in Apple Inc. (NASDAQ:AAPL) in the third quarter, with a total stake value of $146 billion.
Guardian Fund, an investment management firm, mentioned Apple Inc. (NASDAQ:AAPL) in its fourth-quarter 2021 investor letter. Here’s what they said:
“Apple’s market value has increased by USD 700 million per day since Tim Cook became CEO in 2011. As a result, Apple is worth more than the entire crypto market, and Microsoft is worth more than all 900 or so unicorns in the world. Both examples illustrate how scalable internet-enabled companies have become as well as how undervalued the rest of the world’s most promising innovation may be.”
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 143
Uber Technologies, Inc. (NYSE:UBER) is a developer and operator of proprietary technology applications to connect consumers with independent providers of ride services for ridesharing and other transportation services. The company is among Morgan Stanley’s top stock picks for 2022 according to a CNBC report. Morgan Stanley analysts have commented that the stock is among the best bets outside of FAANG (Meta, Amazon, Apple, Netflix, and Alphabet) stocks.
Analyst Brian Nowak at Morgan Stanley holds an Overweight rating on Uber Technologies, Inc. (NYSE:UBER) shares as of November 2021.
For the last stock on our list, our data shows 143 hedge funds long in the third quarter and 135 hedge funds long in the second quarter.
ClearBridge Investments, an investment management firm, mentioned Uber Technologies, Inc. (NYSE:UBER) in its third-quarter 2021 investor letter. Here’s what they said:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
You can also take a look at 10 Best Value Stocks To Buy Now and Top 20 Japanese Companies.
