In this report, we have compiled a list of stocks that have corrected the most in year-to-date 2022 and have “Buy” recommendations on a consensus basis by most analysts’ along with 12-month price targets on these stocks. We have taken a list of the top 10 S&P 500 index stocks and their price targets and also index stocks that have corrected over 30% year-to-date 2022. This might help investors to understand the recent lows for the recommended stocks along with YTD returns generated so far. All returns and prices are as of 15 February 2022.
Growth stocks have corrected the most on the back of fears of rising interest rates. All the compilations are the stocks of the larger three indices namely Nasdaq Composite, S&P 500 index and the Dow Jones Industrial index as it is advisable to stay invested in index stocks when markets remain volatile and move sideways. Additionally, we have also compiled a list of ETFs which have corrected significantly and value can be found in these ETFs at current levels.
Exhibit 1: Top 10 S&P 500 stocks and their YTD returns 2022 along with 12-month price targets
Note* CMP- Current Market Price. All prices are as of 15 February 2022 and Analysts’ recommendations are based on overall consensus. 12-month price targets are from CMP.
Exhibit 2: Index stocks which have corrected over 30% YTD 2022 with a buy recommendation
Note* All prices are as of 15 February 2022 and Analysts’ recommendations are based on overall consensus.
Exhibit 3: Index stocks trading at near 52-week lows with a strong analysts’ ratings
Note* All prices are as of 15 February 2022 and Analysts’ recommendations are based on overall consensus.
Exhibit 4: Dow Jones Indexes stocks which have corrected over 5% YTD 2022 with buy ratings
Inflation protected portfolios
REITs and Energy are usually those sectors which can beat inflation as prices of real estate and oil normally tend to rise along with the costs adding up to inflation. Additionally, sectors like Utilities, Consumer Staples and Healthcare are relatively indispensable. There seems to be consistent demand for these sectors in spite of price increases or higher inflation. Investors can build portfolios by picking stocks in these sectors which are likely to be inflation-protected during these challenging and uncertain times. We have listed down some stocks in the REITs, Utilities and Consumer Staples sectors with positive analysts’ recommendations and have covered Energy and Healthcare sectors in our positive themes for 2022 report previously. We have also discussed how investing in the U.S. TIPS Bonds helps investors to protect portfolios against rising inflation.
Exhibit 5: Inflation protected sectors for 2022
Additionally, Investors can also look at some of the ETFs in the Airlines, Gold mining, Cannabis, Healthcare and Energy ETFs listed below
Exhibit 6: ETFs and their investing strategies among various sectors for 2022
Final Thoughts
Despite the ongoing headwinds in terms of rising inflation and bond yields in anticipation of the increased rate hikes by the U.S. Fed, we believe that the equity markets are likely to remain positive in the year ahead. Investors can look at opportunities in the current fall to buy into fundamentally strong companies across sectors with positive analysts’ ratings and remain invested for a longer time period.
