A new year, new opportunities. As we kick off the third decade of the 21st century, the direction of the stock market remains uncertain. The recent bull run may have come to an end, and investors are afraid that another recession might be right around the corner. Investors who take a pessimistic view on their portfolios may want to consider looking for value in a different segment of the market – small cap stocks. Amazon stock forecast today is $3,680, Tesla stock forecast today is $976.82, and PayPal stock forecast today is $124.27.
Smaller companies tend to suffer during recessions because their smaller operating budgets make them more susceptible to external pressures from competitors and consumers. However, as these smaller companies recover faster than their large counterparts post-recession, they make for excellent long-term investments. Let’s take a look at some of the best stocks to buy now in 2022:
Twilio Inc (NYSE:TWLO) is one of the fastest-growing cloud communications platforms in the world. It facilitates the development of software-enabled businesses by providing programmable communications functionality. The company’s software allows businesses to send and receive voice calls, texts, and video communications in a flexible, cloud-based service.
The company boasts a customer retention rate of 98%, which suggests that its customers are very satisfied with its service. In the fiscal year ending June 30, Twilio witnessed a 156% jump in its stock price as it posted strong financial results. The company expects its revenue to continue growing at a strong pace in the near future. With its rapid growth, Twilio is well-positioned to benefit from the continued rise in e-commerce and the on-demand economy.
The company’s long-term earnings growth potential appears promising, with its price-to-earnings ratio at 39.82. The company’s strong financial performance and high customer retention rate make it a good bet for 2022.
CarMax Inc (NYSE:KMX) is a leading automotive retailer in the United States that sells and finances used cars. The company operates its retail business through its website, CarMax.com, its customer contact centers, and 31 CarMax stores in Virginia, Georgia, Texas, California, and Arizona. Its customers can purchase a used car online and choose a financing option. If a customer chooses to buy a car through one of the company’s financing options, CarMax will arrange to finance for the customer. The company has a network of third-party financing providers that help customers to finance their cars at CarMax.
The rapid growth of e-commerce and the increasing popularity of buying and financing cars online have significantly benefitted CarMax. The company reported a rise in its revenue and net profit in the fiscal year ending August 31, 2018. With its high cash flow, CarMax is able to pay dividends to its shareholders. Its dividend yield of 3.1% is better than many other investment opportunities in the market.
Investors can expect CarMax to continue growing at a healthy pace in the coming years, thanks to the increasing popularity of online shopping. The company’s strong financial performance and future growth potential make it a good bet for 2022.
Union Pacific Corporation(NYSE:UNP)
Union Pacific Corporation (NYSE:UNP) is one of the largest freight railroad operators in North America. The company operates a network of railroads in the U.S. and Canada. The company transports various goods and commodities, such as crude oil, corn, and automobiles. Union Pacific’s network of railroads connects major markets in the U.S., including the Gulf Coast, West Coast, and Eastern seaboard. A significant portion of Union Pacific’s revenue comes from transporting crude oil. The company’s core operating ratio indicates that its operating expenses are significantly lower than its competitors. Union Pacific also has a strong balance sheet, which makes it more financially flexible.
The company’s stock has gained 88.6% since the beginning of 2018. Union Pacific has strong growth potential because of the increase in e-commerce, particularly in the transportation of goods. The company’s strong financial performance and future growth potential make it a good bet for 2022.
Illumina Inc (NASDAQ:ILMN) is a leading molecular diagnostics company that develops and commercializes innovative technologies for genetic testing and analysis. The company provides its products and services to researchers, clinical laboratories, and health care organizations worldwide. Illumina’s core strength is in genotyping, which is the process of identifying variations in DNA. The company has a strong presence in the human genome sequencing market and has a significant presence in the research market as well.
The company has been growing at a rapid pace, owing to the increasing demand for genetic testing in research and health care. The demand for genetic testing is expected to rise as the cost of sequencing a person’s DNA continues to fall. Illumina has a strong financial position, with a debt-to-equity ratio of 0.62. The company’s financial strength and future growth potential make it a good bet for 2022.
The market outlook for 2022 is a mixed bag of emotions. The recent bull run may have come to an end, and investors are afraid that another recession might be right around the corner. Such pessimism can make a great opportunity to invest in small-cap stocks that tend to perform better in a recession.
Any investor looking to invest in stocks for the year 2022 should consider the stocks discussed in this article. All of these companies have strong fundamentals and are expected to expand considerably in the near future.