Nothing much has changed with the economy during this past month. Stuff is still really shaky. People are still uncertain. And diversification is becoming more and more important by the minute. Just 2022 things, really.
But does this mean we’re going to stop investing and wait for this whole thing to calm down?
Of course not.
We love quoting Warren Buffett here, and his whole thing about being greedy when others are fearful applies perfectly to the present situation.
And you know us – we don’t believe in dwelling on the negatives. Instead, we’d much rather focus on the positives (cheap shares up for grabs) and look at the future (potential long-term gains).
And our stock list for this month is built with this in mind. We’re looking for good fundamentals, good deals, and, of course, good potential in the long term.
Today we’re going to take a look at five of the most promising companies that every long-term investor should consider in 2022.
And, if you stick around until the end of the blog, we’ll also share our bonus with you – what we changed in our portfolio during May.
So, without further ado, let’s dive right in!
So, first up, we’ve got…
Alphabet Inc.’s Google (ticker symbol GOOG). Now, it’s no secret that Google shares have been struggling recently.
- Current Price: $2,349.54 ((today change: +66.80 (+2.93%))
- Market Cap: 1.545T
- PE Ratio: 21.24
- EPS: 110.58
As a matter of fact, last month, they hit their lowest price point in over a year. The consequences of the current economy (meaning interest rates and inflation) are unavoidable, even for a business as big as Google. They also suspended most of their commercial activities in Russia (in 2021, Russia accounted for 1% of Google’s total revenue).
What we see here is opportunity because let’s be honest, folks – Google isn’t going anywhere. They’re here to stay. And we believe that people who pass on Google stock, or, even worse – sell out of their positions (at a loss), are missing out big time.
Moving on to the entertainment side of things…
we’re taking a look at The Walt Disney Company (ticker symbol DIS).
- Current Price: $109.70 ((today change: +0.51 (+0.47%))
- Market Cap: 199.818B
- PE Ratio: 75.66
- EPS: 1.45
And, looking at the graph, you’re probably noticing the trend for this blog already. Again, what we see here is similar to Google. Yes, the mouse isn’t as “integral” as Alphabet Inc. Still, they’ve got an incredible supply of hugely profitable IPs, parks, venues, a digital streaming service, and an undeniable reputation for quality entertainment.
Besides, streaming, in general, is still going strong, and Disney has a ton of new potential blockbusters on the way. And all of this is happening at a time when the big player in the streaming field (Netflix) is losing subscribers, while Disney is gaining numbers. So what we see here is an absolute steal.
Activision Blizzard (ATVI)
- Current Price: $77.90 ((today change: +0.49 (+0.63%))
- Market Cap: 60.909B
- PE Ratio: 24.74
- EPS: 3.15
Now, we know that ATVI has been getting a lot of flak lately, both by fans (declining product quality) and by the general public (the harassment scandals), but we still believe that there’s a bright future for this company. First of all, they’ve got incredible IPs. No matter what happens with the business or how much people hate on them, they are still buying the new products as soon as they come out. Then, they’ve also got a lot of new releases lined up for the coming years (with a mobile game debuting as we’re recording this). Oh, and there’s also this minor thing where… Microsoft is primed to purchase ATVI in the near future. And, as we mentioned in one of our recent videos, Warren Buffett is also looking to capitalise on this – he bought 49 657 101 shares, increasing his position by over 330%.
So this stock holds a ton of promise, possibilities, and a bright future.
- Current Price: $476.03 ((today change: +19.04 (+4.17%))
- Market Cap: 210.853B
- PE Ratio: 37.48
- EPS: 12.70
Costco is a business that has been doing really well, with Q3 earnings and sales both beating estimates by a comfortable margin. In addition, they reported over 16% increase in net sales, while net profit grew by almost 11%. As an interesting side-fact, they abstained from raising membership fees while also opting to keep the price of their famous hot-dog & soda combo at its historic price tag of $1.50. We’re not big on hot-dogs or soft drinks, but they absolutely get an “A” here.
This makes Costco not just one of the best performing players in the field but also a company that single-handedly redeemed the entire industry from our (long-term investing) point of view. However, despite all of the positives, the share price still took a nosedive (in line with the current market trends) which immediately placed it on our “buy and hold” list.
And our final suggestion for today is PayPal (ticker symbol PYPL). Again, this is one of the prime examples of stocks that we’d like to hold on to forever. Sure, the short-term isn’t looking great, but you have to remember that the graph shows not just the economic pressure and other short-term factors but also the post-lockdown situation.
- Current Price: $86.65 ((today change: +4.17 (+5.06%))
- Market Cap: 199.818B
- PE Ratio: 75.66
- EPS: 1.45
Back when people were stuck at home, they did most of their shopping online, and PayPal got a lot more business. Despite all of this, PayPal’s top line saw an increase of $6.48 billion (8%) year-over-year. This surpasses the side-sell analyst expectations ($6.41 billion). Their non-GAAP adjusted EPS dropped by 28% year-over-year, precisely in line with Wall Street’s projected expectations for Q1.
All in all, PayPal is looking in good shape, despite everything that’s happening at the moment. This one is a solid hold.
May 2022 Portfolio Changes
May 2022 was a very interesting month on the stock market. Since everything was down massively, you had a ton of people trying to get out of what they thought were losing positions. And we also sold some shares… but for a different reason! So, here’s what we did last month.
And, for all of you who stayed with us this far, here’s the bonus we promised:
What we sold
Our general approach to selling remains the same – we always aim to hold stocks for as long as possible unless:
- something unexpected happens, and we lose faith in the business
- we would rather move the money into a more lucrative position
- we want to diversify more
- we have hit one of our specific targets
So, what we did here is we only sold small portions of our positions, and only after they hit our target of 200% up, and, of course, we did not close any of our positions. As an added upside, we were able to reinvest our gains into our current diversification targets – gold, silver, commodities and crypto.
What we bought
- Tech Stocks (Google & Tesla)
- Crypto (Bitcoin)
- Indices (iShares GSCI Commodity)
- Precious Metal Commodities (Gold & Silver)
Moving forward, we plan to keep a close eye on the big players in the tech field and… Costco! All of these companies are industry leaders, backed by great fundamentals and excellent management.
- Google – Google is very much a “too big to fail business”, backed up by incredible earnings and solid management. Plus, we heavily rely on Google services for our business, and we believe in investing in the things that we use.
- Microsoft – Solid business and widely-used products. The stock is expected to stagnate a bit in the short-term, meaning more buying opportunities.
- PayPal – The number one digital payment processor; if we see a repeat of the 2021 situation, they’re guaranteed to benefit massively.
- Costco – Costco managed to outperform both Walmart and Target.
Oh, and we’re also going to keep a close eye on Starbucks (even though we prefer tea)
And so, it’s time to wrap things up for today. This ended up a bit shorter than our last few blogs, but we don’t like to dwell on the negatives, as we mentioned at the start. Yes, things are looking pretty rough for the stock market, but things will eventually recover as they always do. Until then, we plan to do what we’ve always done – get into good positions, diversify and hold.
Now, if you’d like to learn more about our strategies and how we approach the Stock Market, feel free to drop by our Private Investing group. This is where we discuss current events, do stock analysis and share new ideas. Our members also get access to a ton of exclusive content, courses, eBooks, guides and, of course, the ability to get in touch directly with the team.
If you enjoyed this blog, please don’t forget to give it a thumbs up and share it with your friends! We really appreciate it. You can also check out our previous blog on “Mistakes Most People Make In Dividend Investing“. Oh, and if you’d like to see us cover a specific topic, drop us a line in the comments, and we’ll see what we can do!
And that’s all we’ve got for today, folks.
Thank you all for reading, and until next time!
Recommended books for further reading:
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits
- The Warren Buffett Way
- How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
- Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week
- Investing QuickStart Guide: The Simplified Beginner’s Guide to Successfully Navigating the Stock Market, Growing Your Wealth & Creating a Secure Financial Future
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