After months of dealing with the coronavirus, geopolitical issues, fears of inflation, Fed action, and depressing economic outlooks, investors want to know what’s going to happen next.
Unfortunately, we can’t tell you that with 100% certainty. Our crystal ball is in the shop.
However, we can point you in the direction of red hot stocks that could run even higher in the New Year.
Top Stock for 2022: Albemarle Corporation (ALB)
At $223 a share, Albemarle could easily see higher highs.
All thanks to a lithium bull market that shows no signs of slowing – at least not soon. For one, by 2030, it’s expected we’ll see up to 125 million electric vehicles on the road. Two, major automakers are starting to abandon internal combustion engines for EVs.
However, for millions of EVs to hit the roads, each will need around 22 pounds of lithium.
Unfortunately, we don’t have enough.
Even the International Energy Agency is warning that the, “The supply of critical minerals crucial for technologies such as wind turbines and electric vehicles will have to be ramped up over the next decades if the planet’s climate targets are to be met.”
It’s why Albemarle could see higher highs.
Analysts seem to like the stock, too. Loop Capital, for example, just raised its price target to $280 from $253. Analyst Christopher Kapsch “cites the continued acceleration in demand growth, surging lithium prices, the favorable messaging from the company’s recent Investor Day presentation and the emerging trends from China as reasons to believe that the ‘carbonate market will be even larger than previously contemplated,’” as noted by TheFly.com.
Citi analyst P.J. Juvekar also raised his target to $266 from $262, with a buy rating. All as the lithium sector benefits from tight supply-demand issues.
Top Stock for 2022: FuelCell Energy (FCEL)
For months, shares of hydrogen-fuel stock FCEL have been stuck in a tight channel between $6 and $7.65. However, with the hydrogen story heating up, the stock could break to higher highs.
For one, analysts at Goldman Sachs love the hydrogen story, believing hydrogen could be an $12 trillion market by 2030. Two, the International Energy Agency says the world still needs an investment of $1.2 trillion by 2030 to meet global net zero emission goals. Even automakers – like Volkswagen are now looking into hydrogen technology.
Even more impressive, FCEL is growing. In fact, for the third quarter of 2021, the company reported revenues of $26.8 million, as compared to $18.7 million year over year. Gross profits shot up to $1.1 million from a loss of $3.1 million year over year.
Top Stock for 2022: Affirm Holdings (AFRM)
These days, what’s not to like about Affirm?
After bottoming out around $47, the BNPL – or Buy Now, Pay Later stock ran to $145. From here, it could see $200, with industry growth booming.
For one, according to Barron’s, “BNPL is gaining popularity given that interest rates are ultralow, reducing costs for consumers. Other fintech apps have entered the market, including Affirm, a pure play on the sector, and PayPal (PYPL). Apple (AAPL) is also developing a BNPL service with Goldman Sachs Group (GS), its credit-card partner.”
Two, BNPL has some major players coming in.
PayPal for example just bought BNPL company Paidy for $2.7 billion. Square just bought Afterpay for $29 billion. Amazon.com just partnered with Affirm Holdings.
Three, Bank of America just raised its price target on AFRM to $160 from $119. Even better, Affirm just blew earnings estimates out of the water. Its gross merchandise volumes (GMV) more than doubled year over year to $2.5 billion. Active customer base rocketed to 7.1 million. Revenues were up 70% to $261.8 million. Heading into 2022, it sees GMVs up by 70%, with revenues of between $1.16 billion and $1.19 billion.
With the BNPL market only heating up, AFRM has become a leader.
Again, from a current price of $145, we could see it at $200, maybe even $250 in the New Year.
Top Stock for 2022: Cassava Sciences (SAVA)
Cassava Sciences could be one of the most talked about Alzheimer’s stocks of 2022.
Despite recent negative accusations of wrongdoing, the SAVA stock continues to push higher. After bottoming out around $40, it could test $70 resistance next. From there, we’d like to see a bearish gap refill around $120 a share.
After seeing positive cognition scores with its drug candidate, simufilam, the company just initiated Phase 3 efficacy trials.
According to a recent press release, “Cassava Sciences’ Phase 3 efficacy studies of simufilam in Alzheimer’s disease are being conducted under Special Protocol Assessments (SPA) from the U.S. Food and Drug Administration (FDA). The SPAs document that FDA has reviewed and agreed upon the key design features of Cassava Sciences’ Phase 3 study protocols.”
Should Phase 3 results be as impressive as prior reports, SAVA could easily race back to $120. Especially if it can successfully help millions of people with mild to moderate Alzheimer’s.
Cassava Sciences’ Phase 3 efficacy studies of simufilam in Alzheimer’s disease are being conducted under Special Protocol Assessments (SPA) from the U.S. Food and Drug Administration (FDA). The SPAs document that FDA has reviewed and agreed upon the key design features of Cassava Sciences’ Phase 3 study protocols.
Top Stock for 2022: Nio Inc. (NIO)
When it comes to electric vehicle stocks, one of the top stocks is, of course, Tesla (TSLA). After running from a low of $550 in May 2021, it’s now up to $811. From here, it could easily see $1,000 a share, as the EV boom accelerates. It’s a great opportunity.
However, if you’re looking for a far less expensive EV stock, consider NIO.
At the moment, NIO is sitting at major support at $36.25, dating back to March 2021. From here, we’d like to see an initial test of $40 a share. Moving forward, we’d like to see it closer to its July 2021 high of $55. All as the company continues to produce solid numbers.
Most recently, the company reported:
“With the concerted efforts of NIO teams and supply chain partners, NIO delivered 10,628 vehicles globally in September 2021, an all-time high monthly record representing a robust growth of 125.7% year-over-year. NIO delivered 24,439 vehicles in the third quarter of 2021, representing an increase of 100.2% year-over-year and exceeding the higher end of the Company’s quarterly guidance.”
Goldman Sachs’ analyst Fei Fang also just upgraded the stock to a buy rating, with a $56 price target. Mizuho analyst Vijay Rakesh is also positive on NIO heading into Q4 earnings.
