2 cheap growth stocks to buy for 2022
Valuation metrics such as price / earnings (P / E) ratio can be effective tools that investors can use to value stocks and compare their relative attractiveness. Currently the S&P 500The P / E ratio stands at over 30 which is high compared to previous years when it was much lower. High priced investments can be vulnerable to a correction.
One way to protect your portfolio in the event of a stock market crash is to focus on strong, value-driven purchases. Two stocks that trade at insanely low P / E ratios of less than 15 are Lightning Genetics (NASDAQ: FLGT) and FedEx (NYSE: FDX). Here’s why you’ll want to consider adding them to your portfolio today.
1. Fulminating Genetics
Testing company Fulgent Genetics is trading at just five times its profits. And when you look at the year ahead, it is trading at a futures P / E (which is based on analysts’ estimates) that is only slightly above under seven. Even with a share price north of 90% in 2021 – far exceeding the S&P 500’s 27% rise – it still managed to remain a relatively cheap buy.
Fulgent saw this impressive gain through exploding sales and profits. For the nine months ended September 30, 2021, the company achieved revenue of $ 740.9 million, nearly six times what it had reported in the previous year period. Net profit of $ 403 million was more than eight times its profit a year ago.
These excellent results are due to strong demand for its COVID-19 tests, and therefore its success in 2022 will depend on the state of the pandemic. With omicron wreaking havoc and threatening reopenings, it’s clear the world is not out of the woods just yet. Fulgent confirmed in December that its tests could detect the new variant. With perhaps more variations to come, demand for testing could remain strong in 2022.
Fulgent is not a risk-free buy, given that much will depend on COVID-19, but at its relatively low valuation, the potential rewards may outweigh the risks to this healthcare stock.
FedEx Shipping has not had as good a year as Fulgent; its shares were stable in 2021. But with a P / E of just 14, it’s a cheap buy, especially when compared to its rival. United Parcel Service, which is trading at double that level with a P / E of just under 29. And ultimately there continues to be a wide spread with FedEx stocks which are trading at 12 times its future earnings against 18. for UPS.
Investors could be worried about logistics companies in 2022, especially with inflation on the rise and consumers could tighten their belts. However, the credit card company MasterCard data released last month showing it isn’t – at least, not yet. During the holiday season (which covers the beginning of November until Christmas), spending is up 8.5% from a year ago and e-commerce sales are up 11%. Compared to 2019, all retail sales grew 10.7% and e-commerce grew over 61%. The data is a bit surprising considering that inflation in the United States for 2021 hit 6.8%, its highest level since 1982.
While these trends may not persist for long in unison, the data is encouraging. An increase in shopping, especially online, is great news for FedEx. The logistics company reported revenue of $ 23.5 billion for the period ending November 30, 2021, a 14% increase year-over-year. MasterCard data suggests that growth is not about to stop.
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