Here are 5 companies whose shares are currently undervalued and will show growth in value in 2022.
Advanced Micro Devices (AMD).
On Feb. 14, AMD completed its acquisition of Xilinx, which could boost the company’s earnings and free cash flow. And on April 4, AMD acquired Pensando, which will accelerate its penetration of the cloud, enterprise and peripheral applications market.
The new acquisitions will boost AMD’s revenue, and it’s likely that investors are underestimating the company’s revenue and potential earnings. New product launches in 2022 are likely to resonate with existing customers and attract new ones.
Moderna (MRNA).
One could argue that the Covid-19 pandemic is beginning to subside, but the future is difficult to predict. Moderna believes that the virus is moving toward an endemic phase and humanity will simply have to live with it. Any development will still require the use of vaccines. Moderna is already expecting major orders for Spikevax in 2022 and beyond in 2023.
Moderna has a total of 44 programs in the works. The most notable of these will be the flu vaccine and the HIV vaccine. Successful developments will fluff up the issuer’s stock.
GitLab (GTLB).
The GitLab platform is at the center of writing the code IT needs to build the next generation of leading applications. It’s critical software that can continue to grow despite an inflationary market.
The target market opportunity for GitLab in the DevOps market is about $40 billion.
Rivian Automotive (RIVN).
Rivian produced 2,553 electric vehicles in the first quarter of 2022 and plans to ramp up production by the end of the year. The partnership with Amazon is their competitive advantage because it guarantees the firm’s steady cash flow and increases confidence in the brand.
Rivian is trading at a low valuation of just 5.3 times their future sales in the order book, so the only major obstacle to the firm’s success is the current supply chain disruptions.
Sibanye Stillwater Limited (SBSW).
Those wishing to hedge against fiat currency volatility can look to platinum. The metal remains at 2016 levels due to weakness in global auto production, but threats to Russian exports or renewed demand from investors could end the glut.
Sibanye shares have an extremely low valuation compared to the market and peers. Their dividend yield is 8%. The company also has a strong cash position, good debt levels and has plans to reduce capital expenditures in the coming years.
Undervalued stock δΈ€ the opportunity to earn several times more on securities than the market average. But that outlook involves high risks, so you should protect yourself from losses by diversifying. More importantly, you should study to better understand the characteristics of different sectors and their impact on companies.