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4 Best Growth Stocks for 2022 to Buy and Hold

If you want to turn your portfolio around this year, keep reading to discover the best growth stocks for 2022.
The post 4 Best Growth Stocks for 2022 to…



Growth investors are having a tough year as many past leaders are giving back over half their returns. At the same time, the fallout is giving investors a chance to buy the best growth stocks for 2022 at a discount.

With pandemic leaders such as Netflix (Nasdaq: NFLX) down 73% from its ATH, investors are skeptical of growth stocks. And for a good reason, it may take years to recoup some of these losses.

However, not all growth stocks are the same. For example, Apple (Nasdaq: AAPL) is still considered a growth stock after returning over 1,000% to shareholders since 2013. With this in mind, the iShares Russell 1000 Growth ETF (NYSE: IWF) is down almost 20% YTD.

With The Conference Board forecasting the U.S. GDP slowing to 1.5% compared to 6.9% in Q4 2021, the growth outlook is lousy. But some companies are expecting to still grow significantly in 2022.

If you want to turn your portfolio around this year, keep reading to discover the best growth stocks for 2022.

What Are the Best Growth Stocks for 2022?

If the U.S. economy does slow as predicted, certain areas of the economy like manufacturing and construction may see less demand. Meanwhile, many businesses feel the pressure of slowing profits and slimming margins.

As a result, investors rush to defensive stocks such as household products or healthcare. But what if I told you that you could get the best of both worlds?

The best growth stocks for 2022 are predicting their earnings will continue improving despite an overall economic slowdown.

No. 4 Funko (Nasdaq: FNKO)

  • YOY EPS Growth: 31%
  • YOY Revenue Growth: 58%
  • Analyst Price Target (% Upside): $29 (74%)

If you are not familiar with the name Funko yet, get ready. The brand is taking the pop culture market by storm with action figures, collectibles, NFTs and other merchandise.

Funko is taking advantage of the cultural shifts and deep fan loyalty with 15 years of strategic IP investments. For example, the firm owns rights to Harry Potter, Marvel, Pokémon, DC and Star Wars, to name a few.

With evergreen properties accounting for 69% of sales in Q4, the company is well-positioned to continue building momentum. Even with an economic slowdown, companies like Disney, Netflix and Warner Brothers will continue spending money on content, promoting Funko’s business indirectly.

Lastly, from 2007 to 2011, the Toymaker behind Lego saw sales quadruple, showing toys can remain in demand during slowdowns.

No. 3 Mercado Libre (Nasdaq: MELI)

  • YOY EPS Growth: 9%
  • YOY Revenue Growth: 78%
  • Analyst Price Target (% Upside): $1,550 (50%)

Mercado Libre continues growing at an impressive rate. Yet MELI stock is down almost 50% from its all-time high of $2020 per share.

The e-commerce and digital payments company sales grew by 78% in 2021 after achieving 73% growth in 2020. Furthermore, MELI continues growing its market position with an extra $7.4 billion in GMV this past year.

Latin America has close to double the number of people of the U.S., meaning there is still a ton of room for growth. All signs point to strong momentum as we advance with record GMV, payment volumes, and credit portfolio size in Q4.

MELI’s market cap is around $50 billion, close to half it was at the start of 2021 ($97 billion). Is Mercado Libre worth 50% less? No. Instead, investors are discounting MELI’s ability to keep growing.

Keep reading to discover the best growth stocks for 2022.

No. 2 Enphase Energy (Nasdaq: ENPH)

  • YOY EPS Growth: 41%
  • YOY Revenue Growth: 75%
  • Analyst Price Target (% Upside): $228 (40%)

The world’s leading Microinverter solar systems supplier, Enphase Energy, is becoming more prominent. Enphase beat expectations with record revenue of $441 million in the first quarter of 2022 and EPS of $0.79.

Solar installations made up 46% of all new electric capacity in the U.S. in 2021, the third year as the leading electric source. On top of this, with electricity rates soaring due to the war in Ukraine, we are likely to see solar capacity accelerate overseas, where Enphase is well-positioned for the demand.

Most importantly, the growth looks sustainable with Enphase expanding in the international markets. So far, the firm has operations in the U.S., Mexico, Netherlands, India, China, Australia, Spain and now France.

With this in mind, as solar energy continues to be adopted, Enphase’s superior equipment is proving to be the go-to option. The solar leader expects revenue to be between $490 million and $520 million in Q2. The upbeat outlook makes it one of the best growth stocks for 2022 to buy and hold.

No. 1 Airbnb (Nasdaq: ABNB)

  • YOY EPS Growth: 100%
  • YOY Revenue Growth: 77%
  • Analyst Price Target (% Upside): $197 (23%)

The travel industry is back in a big way after coming to a halt after the pandemic. For example, United Airlines (NYSE: UAL) is projecting record revenue in Q2, while other airline companies expect similar results.

More people traveling means they also need a place to stay while away from home. Sure, you can always rent a hotel. But Airbnb is promoting the “future of travel” with its home-hosting services.

What started as a single hosting experience in San Fransico has reached over 100,000 towns. Although still not quite to pre-pandemic levels, with over 300 million nights booked in 2021, Airbnb is bigger than ever by some factors.

For example, revenue reached $6 billion in 2021, up 77% YOY and 25% from 2019. The growth in sales shows Airbnb is resilient and in position to recoup its losses.

With millions of hosts in almost every corner of the world, Airbnb creates an ecosystem for travel. Even with increasing competition, Airbnb is the market leader. Being a leader has its benefits, like brand awareness and loyalty.

Especially when it comes to travel, people don’t want any issues. As Airbnb perfects the hosting experience, look for travelers to continue trusting the brand and its services.

Is Now the Time to Invest in the Best Growth Stocks for 2022?

Although many growth stocks are down right now, there is reason to be optimistic about the future. Of course, many of these companies are losing money by the millions with foggy plans to generate profit.

As the Federal Reserve raises interest rates to cool the surging inflation, high-growth companies are falling hard. When interest rates are rising, future earnings are worthless. In particular, we are seeing this with tech stocks that have higher valuations compared to earnings.

Many of these stocks are down over 50% from their ATHs, so multiples are again compressing. On top of this, investor sentiment is low with fears of a recession.

With this in mind, these are some of the best growth stocks for 2022 to buy and for long-term returns. Even though short-term volatility is likely, these companies are outpacing the competition while establishing dominant market positions.

The post 4 Best Growth Stocks for 2022 to Buy and Hold appeared first on Investment U.

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After a near 10% rally this week can the Netflix share price make a comeback?

The Netflix share price rallied by nearly 10% (9.6%) this week after co-CEO Ted Sarandos confirmed the film and television streaming market leader is to…



The Netflix share price rallied by nearly 10% (9.6%) this week after co-CEO Ted Sarandos confirmed the film and television streaming market leader is to introduce a new ad-supported, cheaper subscription. The company also announced it is to lay off another 300 employees, around 4% of its global workforce, in addition to the 150 redundancies last month.

Netflix has been forced into a period of belt-tightening after announcing a 200,000 subscriber-strong net loss over the first quarter of 2022. The U.S. tech giant also ominously forecast expectations for the loss of a further 2 million subscribers over the current quarter that will conclude at the end of this month.

netflix inc

The company has faced increasing sector competition with Paramount+ its latest new rival, joining Amazon Prime, Disney+, HBO Max and a handful of other new streaming platforms jostling for market share. A more competitive environment has combined with a hangover from the subscriber boom Netflix benefitted from over the Covid-19 pandemic and spiralling cost of living crisis.

Despite the strong gains of the past week, Netflix’s share price is still down over 68% for 2022 and 64% in the last 12 months. Stock markets have generally suffered this year with investors switching into risk-off mode in the face of spiralling inflation, rising interest rates, fears of a recession and the geopolitical crisis triggered by Russia’s invasion of Ukraine.

Growth stocks like Netflix whose high valuations were heavily reliant on the value of future revenues have been hit hardest. No recognised member of Wall Street’s Big Tech cabal has escaped punishment this year with even the hugely profitable Apple, Microsoft, Alphabet and Amazon all seeing their valuations slide by between around 20% and 30%.

But all of those other tech companies have diversified revenue streams, bank profits which dwarf those of Netflix and are sitting on huge cash piles. The more narrowly focused Meta Platforms (Facebook, WhatsApp and Instagram) which still relies exclusively on ad revenue generated from online advertising on its social media platforms, has also been hit harder, losing half of its value this year.

But among Wall Street’s established, profitable Big Tech stocks, Netflix has suffered the steepest fall in its valuation. But it is still profitable, even if it has taken on significant debt investing in its original content catalogue. And it is still the international market leader by a distance in a growing content streaming market.


Source: JustWatch

Even if the competition is hotting up, Netflix still offers subscribers by far the biggest and most diversified catalogue of film and television content available on the market. And the overall value of the video content streaming market is also expected to keep growing strongly for the next several years. Even if annual growth is forecast to drop into the high single figures in future years.

revenue growth

Source: Statista

In that context, there are numerous analysts to have been left with the feeling that while the Netflix share price may well have been over-inflated during the pandemic and due a correction, it has been over-sold. Which could make the stock attractive at its current price of $190.85, compared to the record high of $690.31 reached as recently as October last year.

What’s next for the Netflix share price?

As a company, Netflix is faced with a transition period over the next few years. For the past decade, it has been a high growth company with investors focused on subscriber numbers. The recent dip notwithstanding, it has done exceedingly well on that score, attracting around 220 million paying customers globally.

Netflix established its market-leading position by investing heavily in its content catalogue, first by buying up the rights to popular television shows and films and then pouring hundreds of millions into exclusive content. That investment was necessary to establish a market leading position against its historical rivals Amazon Prime, which benefits from the deeper pockets of its parent company, and Hulu in the USA.

Netflix’s investment in its own exclusive content catalogue also helped compensate for the loss of popular shows like The Office, The Simpsons and Friends. When deals for the rights to these shows and many hit films have ended over the past few years their owners have chosen not to resell them to Netflix. Mainly because they planned or had already launched rival streaming services like Disney+ (The Simpsons) and HBO Max (The Office and Friends).

Netflix will continue to show third party content it acquires the rights to. But with the bulk of the most popular legacy television and film shows now available exclusively on competitor platforms launched by or otherwise associated with rights holders, it will rely ever more heavily on its own exclusive content.

That means continued investment, the expected budget for this year is $17 billion, which will put a strain on profitability. But most analysts expect the company to continue to be a major player in the video streaming sector.

Its strategy to invest in localised content produced specifically for international markets has proven a good one. It has strengthened its offering on big international markets like Japan, South Korea, India and Brazil compared to rivals that exclusively offer English-language content produced with an American audience in mind.

The approach has also produced some of Netflix’s biggest hits across international audiences, like the South Korean dystopian thriller Squid Games and the film Parasite, another Korean production that won the 2020 Academy Award for best picture – the first ever ‘made for streaming’ movie to do so.

Netflix is also, like many of its streaming platform rivals, making a push into sport. It has just lost out to Disney-owned ESPN, the current rights holder, in a bid to acquire the F1 rights for the USA. But having made one big move for prestigious sports rights, even if it ultimately failed, it signals a shift in strategy for a company that hasn’t previously shown an interest in competing for sports audiences.

Over the next year or so, Netflix’s share price is likely to be most influenced by the success of its launch of the planned lower-cost ad-supported subscription. It’s a big call that reverses the trend of the last decade away from linear television programming supported by ad revenue in its pursuit of new growth.

It will take Netflix at least a year or two to roll out a new ad-supported platform globally and in the meanwhile, especially if its forecast of losing another 2 million subscribers this quarter turns out to be accurate, the share price could potentially face further pain. But there is also a suspicion that the stock has generally been oversold and will eventually reclaim some of the huge losses of the past several months.

How much of that loss of share price is reclaimed will most probably rely on take-up of the new ad-supported cheaper membership tier. There is huge potential there with the company estimating around 100 million viewers have been accessing the platform via shared passwords. That’s been clamped down on recently and will continue to be because Netflix is determined to monetise those 100 million viewers contributing nothing to its revenues.

If a big enough chunk of them opt for continued access at the cost of watching ads, the company’s revenue growth could quickly return to healthy levels again. And that could see some strong upside for the Netflix share price in the context of its currently deflated level.

The post After a near 10% rally this week can the Netflix share price make a comeback? first appeared on Trading and Investment News.

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Aura High Yield SME Fund: Letter to Investors 24 June 2022

The RBA delivered a speech this week indicating faster monetary policy tightening is to come in the near-term with the aim of curbing the rate of inflation….



The RBA delivered a speech this week indicating faster monetary policy tightening is to come in the near-term with the aim of curbing the rate of inflation.

Inflation and Monetary Policy 1,2

This week, RBA Governor Philip Lowe spoke about the department’s monetary policy intervention to tackle inflation in the evolving economic environment. Over the last six months, similar factors have continued to put pressure on food and energy prices – namely the war in Ukraine, foods on the East coast, and Covid lockdowns in China. The ongoing lockdowns in China are causing disruptions in manufacturing and production and supply chains coupled with strong global demand that is unable to be met. These pressures have forced households and businesses to absorb the rising cost of living.

To demonstrate the rise, the RBA reporting this week on Business Conditions and Sentiments saw:

  • Almost a third of all businesses (31 per cent) have difficulty finding suitable staff;
  • Nearly half (46 per cent) of all businesses have experienced increased operating expenses; and
  • More than two in five businesses (41 per cent) face supply chain disruptions, which has remained steady since it peaked in January 2022 (47 per cent).

* The Survey of Business Conditions and Sentiments was not conducted between July 2021 to December 2021 (inclusive)

Inflation is being experienced globally, although Australia remains below that of most other advanced economies sitting at 5.1 per cent. The share of items in the CPI basket with annualised price increases of more than 3 per cent is at the highest level since 1990 as displayed in the graph below.

With additional information on leading indicators now on hand, the RBA has pushed their inflation forecast up from 6 to 7 per cent for the December quarter, due to persistently high petrol and energy prices. After this period, the RBA expects inflation will begin to decline.

We are beginning to see pandemic-related supply side issues resolve, with delivery times shortening slightly and businesses finding alternative solutions for global production and logistic networks. Whilst there is still a way to go in normalising the flow in the supply side and the possibility that further disruptions and setbacks could occur, the global production system is adapting accordingly, which should help alleviate some of the inflationary pressures.

The RBA’s goal is to ensure inflation returns to a 2-3 per cent target range over time, with the view that high inflation causes damage to the economy, reduces people’s purchasing power and devalues people’s savings.

Household Wealth 3

Growth of 1.2 per cent in household wealth, equivalent to $173 billion, was reported in the March quarter. The rise was a result of an increase in housing prices in the March quarter. Prices have started reversing since that read.

Demand for credit also boomed, with a record total demand for credit of $218.8 billion for the March quarter. The rise was driven by private non-financial corporations demanding $153.2 billion, while households and government borrowed $41.9 billion and $17.5 billion respectively. 

We will likely see a significant shift in household wealth and credit demand in next quarter’s report given the rising interest rate environment, depressed household valuations and elevated pricing pressures. 

Portfolio Management Commentary

A lag in leading economic indicators has shifted the RBA’s outlook, with an increase in the expected level of inflation to peak at 7 per cent and rate rises to come harder and faster in the near term. From a portfolio standpoint we are not seeing any degradation in our underlying portfolio and open dialogue with our lenders has us confident in their borrowing base. We are maintaining a close eye on the economic environment to ensure we maintain the performance of our Fund and ensure our lenders are in a position to maintain performance and strive to capitalise off the back of economic shifts.

1 RBA Inflation and Monetary Policy Speech – 21 June 2022

2 RBA Inflation and Monetary Policy Speech – 21 June 2022

3 Australian National Accounts: Finance and Wealth

You can learn more about the Aura High Yield SME Fund here.

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Home Showings Across US Plunge 24%, Mortgage Rates Remain Elevated

Home Showings Across US Plunge 24%, Mortgage Rates Remain Elevated

Authored by Naveen Anthrapully via The Epoch Times,

Home showings across…



Home Showings Across US Plunge 24%, Mortgage Rates Remain Elevated

Authored by Naveen Anthrapully via The Epoch Times,

Home showings across the United States have fallen, according to a report by the National Association of Realtors (NAR), with all four regions registering a decline.

Home showings—when a potential buyer takes a private home tour with an agent—were down by 24 percent year-on-year in May, with total showings across the country at 785,005, said the NAR SentriLock Home Showings Report. SentriLock is a lockbox and real estate management solutions company.

All four regions in the United States saw a decrease in showings year-on-year, with the Northwest falling by 55 percent, Midwest by 29 percent, West by 27 percent, and the South by 14 percent.

Total SentriLock cards fell 2 percent YoY to 214,868. The cards allow realtors access to Sentrilock lockboxes—which hold keys to a home and allow communal access to all real estate agents—and indicate the number of realtors who conduct the showing.

The number of showings per card, which reflects the strength of buyer interest per listed property, decreased 23 percent YoY in May nationwide. Region-wise, showings per card in the West fell by 29 percent, the South by 23 percent, and the Midwest by 22 percent. Only the Northeast registered an increase at 45 percent.

Meanwhile, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell by two points to 67 in June, which the organization called a “troubling sign” for the housing market and broader economy.

According to NAHB Chair Jerry Konter, the six consecutive monthly declines of HMI is a “clear sign of a slowing housing market in a high-inflation, slow-growth economic environment.”

This is the lowest HMI reading since June 2020. The index had hit a record high of 90 at the end of 2020 when the pandemic triggered strong demand for homes.

Elevated Mortgage Rates

The fall in home showings is happening as mortgage rates remain at elevated levels. A 30-year fixed-rate mortgage had an average interest rate of 5.81 percent as of June 22, according to data from Freddie Mac. is expecting home prices and mortgage rates to continue climbing while home sales drop as buyers get priced out from homeownership, based on a June 13 analysis of market trends. The rise in mortgage rates is driven by the U.S. Federal Reserve hiking interest rates to control inflation, the company noted.

“Rising interest rates have shifted the foundation of the economy as well as the housing market. So many homebuyers take out mortgages so that rising rates affect how expensive homeownership is,” said the company’s Chief Economist Danielle Hale. “It’s causing buyers to make tough trade-offs and disrupting the housing market.”

Tyler Durden Sun, 06/26/2022 - 18:30

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