In this article, we discuss 5 cheap stocks to buy that outperformed in 2022. If you want to see more cheap stocks to buy that outperformed in 2022, the risk/reward, and methodology of this list, go directly to 12 Cheap Stocks to Buy That Outperformed in 2022.
5. American Express Company (NYSE:AXP)
Year to Date Return as of December 14: -8.38%
Number of Hedge Fund Holders: 68
Although its shares are down 8.38% year to date, American Express Company (NYSE:AXP) has nevertheless been one of the better performing financial stocks this year as its business has not been affected that much by the macroeconomic headwinds so far.
Following the company’s third quarter earnings release in October, American Express Company (NYSE:AXP) CEO Stephen Squeri said to Yahoo Finance, “We’re not seeing any changes in consumer spending. We have strong credit quality.”
Whether that will change depends on how the economy does but analysts are bullish on American Express Company (NYSE:AXP) with an average price target of $168.17 per share.
4. The Procter & Gamble Company (NYSE:PG)
Year to Date Return as of December 14: -6.18%
Number of Hedge Fund Holders: 69
The Procter & Gamble Company (NYSE:PG) ranks #4 on our list of 12 Cheap Stocks to Buy That Outperformed in 2022 given 69 hedge funds in our database owned shares of the stock at the end of Q3.
While analysts have a slightly lower average price target than what the stock is trading for, The Procter & Gamble Company (NYSE:PG) has substantial intrinsic value that could offer upside in the long term. Given its portfolio of leading brands, The Procter & Gamble Company (NYSE:PG) has growth potential if it maintains its market share and if the Federal Reserve wins its battle against inflation.
Although shares are down 6.18%, The Procter & Gamble Company (NYSE:PG) stock has rallied fairly significantly since its October lows.
3. Johnson & Johnson (NYSE:JNJ)
Year to Date Return as of December 14: 4.79%
Number of Hedge Fund Holders: 85
Healthcare giant Johnson & Johnson (NYSE:JNJ) has rallied 4.79% in 2022 given its strong business and overall growth potential.
Although Johnson & Johnson (NYSE:JNJ)’s adjusted diluted EPS fell 1.9% year over year to $2.55 in the third quarter, the company’s operational sales rose 8.1% year over year. With less headwinds in a more normalized economic environment, Johnson & Johnson (NYSE:JNJ) will likely be able to earn more given its sales growth.
In terms of analysts, they think there’s potential for more upside for Johnson & Johnson (NYSE:JNJ) as they have an average price target of $184.40 per share. 85 hedge funds in our database owned shares of Johnson & Johnson (NYSE:JNJ) at the end of Q3, ranking the stock #3 on our list of 12 Cheap Stocks to Buy That Outperformed in 2022.
2. Mastercard Incorporated (NYSE:MA)
Year to Date Return as of December 14: -3.62%
Number of Hedge Fund Holders: 146
Mastercard Incorporated (NYSE:MA) fell 3.62% this year given financial valuations across the market have declined. Nevertheless, the payments leader has done well in terms of earnings. For Q3, Mastercard Incorporated (NYSE:MA)’s adjusted diluted EPS rose 13% year over year to $2.68 and its net sales rose 15% year over over year to $5.8 billion. In December, the company’s board also approved a new share purchase program of up to $9 billion.
Analysts think Mastercard Incorporated (NYSE:MA) could rally in the long term as they have an average price target of $399.37 per share.
1. Visa Inc. (NYSE:V)
Year to Date Return as of December 14: -3.66%
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) ranks #1 on our list of 12 Cheap Stocks to Buy That Outperformed in 2022 given 165 hedge funds in our database owned shares of the payments leader at the end of the third quarter. Although shares of Visa Inc. (NYSE:V) have declined 3.66% year to date, they have outperformed the S&P 500’s decline of 16.7% in the same period. There could be upside in the long term as analysts have a price target of $249.36 per share.
RiverPark Large Growth Fund commented on Visa Inc. (NYSE:V) in a Q3 2022 investor letter,
We reinitiated a small position in Visa, which we had previously owned for years (selling out of the position at higher levels in February). We continue to believe that the long-term secular growth trend towards digital payments remains intact and has been further enhanced by the COVID crisis. The growth in debit cards, contactless payments, e-commerce, and now, buynow-pay-later (BNPL), are all driving digital payment penetration, and we continue to be impressed with the long-term growth potential of V (and our other payment holdings Mastercard, Adyen, and PayPal).
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