12 Best Performing Growth Stocks in 2022

Published on January 2, 2023 at 1:50 pm by Hamna Asim in Hedge Funds, News

In this article, we discuss 12 best performing growth stocks in 2022. If you want to see more stocks in this selection, 5 Best Performing Growth Stocks in 2022.

Despite rebounding from their October lows, stocks were still down significantly in 2022 and market experts forecast a similar situation in 2023, at least in the beginning. With the Federal Reserve still increasing interest rates and the U.S. economy barrelling into a much-anticipated recession, investors are still uncertain, which will fuel further volatility in 2023. Greg McBride, CFA, chief financial analyst at Bankrate, said in a report dated December 28:

“Two-in-three economists are forecasting a recession in 2023, yet corporate earnings estimates haven’t come down to reflect that. If the economy continues to slow and quarterly earnings calls in January reveal a dour outlook for the year, corporate earnings estimates will be marked down and the market could have a renewed tumble.”

However, some sectors are set to outperform despite a global economic downturn. Higher rates have battered growth stocks this year, but many value stocks have performed well, or at least comparatively better. Gerry Frigon, president and CFO of Taylor Frigon Capital Management, stated:

“Stay focused on long-term strategies that seek to capitalize on innovative and growing businesses that are aiding the digital transformation of all enterprises.”

This means investors should focus on long-term investment ideas and pick up high quality growth plays that are trading at discounts right now. (see 11 Best Buy-the-Dip Stocks To Invest In) Some of the most popular growth stocks among smart investors include Amazon.com, Inc. (NASDAQ:AMZN), Tesla, Inc. (NASDAQ:TSLA), and NVIDIA Corporation (NASDAQ:NVDA). However, in this article, we discuss the best performing growth stocks in 2022.

Our Methodology

We selected the following growth stocks based on positive share price gains in 2022 as of December 29. These stocks have price-to-earnings ratios of more than 30. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged according to the number of hedge fund holders in each firm. This means our list demonstrates the best performing growth stocks to buy according to hedge funds. We also discussed analyst coverage, business fundamentals, and the future share catalysts associated with these firms.

Source:Pixabay

Best Performing Growth Stocks in 2022

12. Maxar Technologies Inc. (NYSE:MAXR)

Number of Hedge Fund Holders: 16

YTD Share Price Gain in 2022 as of December 29: 74.57%

P/E Ratio as of December 29: 119.70

Maxar Technologies Inc. (NYSE:MAXR) is a Colorado-based provider of earth intelligence and space infrastructure solutions in the United States, Asia, South America, Europe, the Middle East, Australia, Canada, and internationally. On December 16, Maxar Technologies Inc. (NYSE:MAXR) shares rose nearly 123% in pre-market trading after the firm was acquired by United States-based Advent International in an all-cash transaction that values Maxar Technologies Inc. (NYSE:MAXR) at an enterprise value of approximately $6.4 billion. Maxar stockholders will receive $53.00 per share in cash, a 129% premium to prior closing price. The transaction is expected to close mid-2023 and Maxar will benefit from the large resources, operational expertise, and capacity for investment provided by Advent.

On December 19, BMO Capital analyst Thanos Moschopoulos raised the price target on Maxar Technologies Inc. (NYSE:MAXR) to $53 from $27 and kept a Market Perform rating on the shares following Advent’s offer to acquire the company. The analyst does not expect a higher bid for the company to emerge.

According to Insider Monkey’s third quarter database, 16 hedge funds were bullish on Maxar Technologies Inc. (NYSE:MAXR), compared to 15 funds in the prior quarter. Jeffrey Jacobowitz’s Simcoe Capital Management is the largest position holder in the company, with 3.13 million shares worth $58.6 million.

Like Amazon.com, Inc. (NASDAQ:AMZN), Tesla, Inc. (NASDAQ:TSLA), and NVIDIA Corporation (NASDAQ:NVDA), Maxar Technologies Inc. (NYSE:MAXR) is one of the best growth stocks to invest in.

11. Agilysys, Inc. (NASDAQ:AGYS)

Number of Hedge Fund Holders: 17

YTD Share Price Gain in 2022 as of December 29: 73.64%

P/E Ratio as of December 29: 241.25

Agilysys, Inc. (NASDAQ:AGYS) is a Georgia-based developer and marketer of hardware and software products and services to the hospitality industry in North America, Europe, the Asia Pacific, and India. On October 25, Agilysys, Inc. (NASDAQ:AGYS) reported Q4 non-GAAP earnings per share of $0.24 and a revenue of $47.7 million, outperforming Wall Street estimates by $0.06 and $1.68 million, respectively. Agilysys, Inc. (NASDAQ:AGYS) is one of the best performing growth stocks this year.

On December 16, BTIG analyst Matthew VanVliet upgraded Agilysys, Inc. (NASDAQ:AGYS) to Buy from Neutral with an $83 price target. The company announced a “game-changing contract win” with Marriott to deploy its property management system across U.S. and Canada luxury, premium, and select service hotels over the next several years, the analyst told investors. This represents a potential 5,600 properties with 940,000 rooms, which should nearly triple Agilysys, Inc. (NASDAQ:AGYS)’s PMS business and provide an incremental 20%-plus growth in fiscal 2025 through 2027, said the analyst.

According to Insider Monkey’s data, 17 hedge funds were bullish on Agilysys, Inc. (NASDAQ:AGYS) at the end of September 2022, compared to 16 funds in the last quarter. Michael Kaufman’s MAK Capital One is the leading position holder in the company, with 3.8 million shares worth $210 million.

10. CECO Environmental Corp. (NASDAQ:CECO)

Number of Hedge Fund Holders: 17

YTD Share Price Gain in 2022 as of December 29: 84.91%

P/E Ratio as of December 29: 38.40

CECO Environmental Corp. (NASDAQ:CECO) was incorporated in 1966 and is headquartered in Dallas, Texas. The company provides industrial air quality and fluid handling systems worldwide. It operates in two segments – Engineered Systems Segment and Industrial Process Solutions Segment. CECO Environmental Corp. (NASDAQ:CECO) shares have climbed nearly 85% year-to-date as of December 29, making it one of the best performing growth stocks in 2022.

On November 7, CECO Environmental Corp. (NASDAQ:CECO) reported a Q3 non-GAAP EPS of $0.20 and a revenue of $108.4 million, outperforming Wall Street estimates by $0.09 and $13.17 million, respectively. The Company updated its expected full-year 2022 guidance for revenue to exceed $410 million, versus a consensus of $391.91 million, up over 25 percent year-over-year.

Craig-Hallum analyst Aaron Spychalla initiated coverage of CECO Environmental Corp. (NASDAQ:CECO) with a Buy rating and a $17 price target, noting that he sees opportunity for a much higher stock. CECO Environmental Corp. (NASDAQ:CECO) is starting to see the benefits of a business transformation that was previously focused on longer-cycle, cyclical, and project-based energy markets to one more diversified by product and vertical, with a shorter-cycle profile, and end-markets that are benefiting from ESG tailwinds for clean air and clean water, the analyst told investors.

According to Insider Monkey’s data, CECO Environmental Corp. (NASDAQ:CECO) was part of 17 hedge fund portfolios at the end of Q3 2022, and Douglas T. Granat’s Trigran Investments is the largest stakeholder of the company, with 3.2 million shares worth $29 million.

9. Texas Pacific Land Corporation (NYSE:TPL)

Number of Hedge Fund Holders: 20

YTD Share Price Gain in 2022 as of December 29: 90.99%

P/E Ratio as of December 29: 42.55

Texas Pacific Land Corporation (NYSE:TPL) engages in land and resource management, and water services businesses. The company specializes in oil, gas and related hydrocarbons, power line and utility easements, and subsurface wellbore easements and commercial leases. It is one of the best performing growth stocks in 2022, with shares up nearly 91% year-to-date as of December 29.

Texas Pacific Land Corporation (NYSE:TPL) reported market beating results for the third quarter of 2022. The company announced Q3 GAAP earnings per share of $16.82, topping analysts’ estimates by $2.44. Revenue for the period came in at $191.11 million, up 54.5% year-over-year, outperforming Wall Street consensus by $15.44 million.

According to Insider Monkey’s data, 20 hedge funds held long positions in Texas Pacific Land Corporation (NYSE:TPL) at the end of the third quarter of 2022, compared to 22 funds in the last quarter. Murray Stahl’s Horizon Asset Management is the largest stakeholder of the company, with 1.5 million shares worth $2.6 billion.

LRT Capital made the following comment about Texas Pacific Land Corporation (NYSE:TPL) in its October investor letter:

“Long time readers will know that we rarely invest in commodity businesses. However, there are periods in the market where commodity-based businesses outperform the broad indexes by a wide margin. Therefore, to have balance in the portfolio, we have long searched for a competitively advantaged company in the commodity space. We believe that Texas Pacific Land Corporation (NYSE:TPL), meets that criterion. Formed out of assets of formerly bankrupt railroads, TPL controls the largest acreage of land in the Permian basin – the center of the US shale oil industry. The company has two main sources of income: 1) royalties from oil & gas extracted on its properties – essentially a free call option on future oil prices and production; and 2) a water business which develops water resources and sells services to the fracking industry. We see TPL as an effective way to diversify the portfolio into a commodity exposed business that has a history of smart capital allocation and low risk of financial distress during periods of low oil prices. The company has no debt, and $281 million in cash. The company uses most of its cash flows to pay dividends and repurchase shares.”

8. NOV Inc. (NYSE:NOV)

Number of Hedge Fund Holders: 22

YTD Share Price Gain in 2022 as of December 29: 50.05%

P/E Ratio as of December 29: 671.00

NOV Inc. (NYSE:NOV) was founded in 1862 and is based in Houston, Texas. The company designs, manufactures, and commercializes systems, components, and products for oil and gas drilling and production, industrial, and renewable energy sectors worldwide. The company operates through three segments – Wellbore Technologies, Completion & Production Solutions, and Rig Technologies. NOV Inc. (NYSE:NOV) reported a revenue of $1.89 billion in Q3 2022, up 41.0% from the prior-year quarter, beating market estimates by $70 million. NOV Inc. (NYSE:NOV) is one of the best performing growth stocks this year.

On December 9, Raymond James analyst James Rollyson initiated coverage of NOV Inc. (NYSE:NOV) with an Outperform rating and a $30 price target. A sustained period of underinvestment, paired with high energy transition pressures, set up the current oil supply situation, for “which there is no short term fix,” the analyst told investors. Capital discipline and asset rationalization in the oilfield service sector has put a lid on how fast the industry could ramp back up, which “portends a more bullish set up for a longer cycle with sustained free cash flow generation” and an extended period of robust margins, the analyst added.

According to Insider Monkey’s Q3 data, 22 hedge funds were long NOV Inc. (NYSE:NOV) at the end of September 2022, and Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company, with 36.10 million shares worth $584 million.

Here is what Heartland Advisors specifically said about NOV Inc. (NYSE:NOV) in its Q3 2022 investor letter:

“Post Covid, the demand for oil has been strong, expected to exceed 100 million barrels a day. Our sense is that energy service-related companies have entered the early innings of a positive earnings revision cycle, a rarity in the markets. To take advantage of this, we own NOV Inc. (NYSE:NOV), a leading oilfield services company that provides technical expertise, advanced equipment, and operational support for the oil and gas industry. NOV generated $4.6B in EBITDA in 2014, but just $230M last year, which speaks to the under investment in the broader energy patch. NOV’s outlook continues to improve though, as the company is now forecasted to produce over $600M and nearly $900M in 2022 and 2023, respectively. Interestingly, estimates are up ~10% since the start of the year and maintain an upward bias.”

7. MRC Global Inc. (NYSE:MRC)

Number of Hedge Fund Holders: 22

YTD Share Price Gain in 2022 as of December 29: 64.53%

P/E Ratio as of December 29: 37.73

MRC Global Inc. (NYSE:MRC) is a Texas-based company that distributes pipes, valves, fittings, and other infrastructure products and services to the energy, industrial, and gas utility end-markets in the United States, Canada, and internationally. With shares climbing nearly 65% year-to-date as of December 29, MRC Global Inc. (NYSE:MRC) is one of the best performing growth stocks in 2022.

On November 8, MRC Global Inc. (NYSE:MRC) posted Q3 non-GAAP earnings per share of $0.42, beating market estimates by $0.11. The revenue came in at $904 million, climbing 32% year-over-year, topping Wall Street consensus by $15.96 million.

Stifel analyst Nathan Jones on October 11 maintained a Buy recommendation on MRC Global Inc. (NYSE:MRC) but lowered the price target on the shares to $15 from $16. Large indicators, and the firm’s latest surveys, indicate a weakening of short cycle industrial demand, noted the analyst, who headed into Q3 reporting season for the Americas multi-industry group “cautious on short cycle industrial” and prefers energy, infrastructure, and water names in general.

According to Insider Monkey’s data, 22 hedge funds were long MRC Global Inc. (NYSE:MRC) at the end of Q3 2022, compared to 19 funds in the last quarter. Richard S. Pzena’s Pzena Investment Management is the biggest stakeholder of the company, with 5.4 million shares worth $39.4 million.

Here is what ClearBridge Investments SMID Cap Growth Strategy has to say about MRC Global Inc. (NYSE:MRC) in its Q4 2021 investor letter:

“We also closed out of four names during the quarter. We took advantage of the rally of energy stocks to take profits in MRC Global, a distributor of pipes and valves for the exploration and production industry.”

6. e.l.f. Beauty, Inc. (NYSE:ELF)

Number of Hedge Fund Holders: 24

YTD Share Price Gain in 2022 as of December 29: 67.39%

P/E Ratio as of December 29: 88.24

e.l.f. Beauty, Inc. (NYSE:ELF) is a California-based provider of cosmetic and skin care products under the e.l.f. Cosmetics, e.l.f. Skin, Well People, and Keys Soulcare brands worldwide. The company raised its FY23 guidance well above Street consensus to reflect resilient demand, market share gains, cost savings, and favorable product mix. e.l.f. Beauty, Inc. (NYSE:ELF) expects FY23 adjusted EPS of $1.07 to $1.10, above the $0.91 consensus, and net sales of $448 million to $456 million, exceeding the revenue consensus of $459.45 million.

On December 13, JPMorgan analyst Andrea Teixeira raised the price target on e.l.f. Beauty, Inc. (NYSE:ELF) to $62 from $48 and kept an Overweight rating on the shares. The analyst expects a “bifurcated” year for staples in 2023 and thinks selective household, personal care, and beverage stocks “can continue to work next year.”

According to Insider Monkey’s third quarter database, 24 hedge funds were bullish on e.l.f. Beauty, Inc. (NYSE:ELF), compared to 22 funds in the prior quarter. Jim Simons’ Renaissance Technologies held the largest position in the company, with 1.10 million shares worth $41.5 million.

In addition to Amazon.com, Inc. (NASDAQ:AMZN), Tesla, Inc. (NASDAQ:TSLA), and NVIDIA Corporation (NASDAQ:NVDA), e.l.f. Beauty, Inc. (NYSE:ELF) is one of the favorite growth stocks of smart investors.

Click to continue reading and see 5 Best Performing Growth Stocks in 2022.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on May 1, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on May 2, 2024 at by Insider Monkey Staff

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