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Max Manturov

Max Manturov

Head of investment research regulated by CySec 18.04.2022

10 stocks for the beginner investor in 2022

If you have opened a brokerage account and are ready to invest, it can still be difficult to choose the first securities to buy. Without being skilled in financial analysis, it is difficult to know whether you can make a profit on a particular stock.

In such a situation, our analysts recommend starting with stocks of large market capitalisation and stable companies that still have good growth potential. We have prepared a selection of the top 10 stocks to start building an investment portfolio in 2022.

Apple (AAPL.US)

Ticker: AAPL.US
Price: $167.70
Target price: $193.30
Growth potential: 15.3%

In terms of sales, the fourth quarter of 2021 was the company's most successful ever. EPS, which reflects the ratio of net income to the number of shares (essentially showing how profitable it is to buy these securities) was $2.10.

The company's revenue rose to $123.94 billion (+11.2% YoY). Revenue from product sales was $104.4bn and from services 一 $19.52bn. Apple earned the most from iPhone sales ($71.63bn) and wearable accessories and devices ($14.7bn).

Apple is planning a strong iPhone refresh cycle for the 2023 financial year. They also want to develop new products 一 already have a product line-up that includes virtual reality, augmented reality and electric cars. This supports a robust business outlook and enough flexibility for the company to grow aggressively.

Buy Apple >>

JP Morgan Chase (JPM.US)

Ticker: JPM.US
Price: $131.50
Target price: $176
Growth potential: 33.8%

JP Morgan has been ramping up its asset management activities over the past few years. The acceleration in core banking will stimulate growth in JPM shares over the coming year. Also, if the Fed raises interest rates, the bank's interest income will rise in 2022 and beyond. A delay in tapering, on the other hand, will keep the economy in the hot seat and this will create a favourable environment for JP Morgan.

Economic activity has now taken an upward trend in potential GDP. The banking sector is likely to benefit from core banking growth. That said, JP Morgan is investing in the digital future to confront the changes brought about by fintech, especially blockchain technology.

The company reported net income of $10.4bn and earnings per share of $3.33 in the fourth quarter of 2021. Such positive results were helped by increased capital markets activity and rising credit activity, as average loans across the firm rose 6%.

Buy JP Morgan Chase >>

Visa (V.US)

Ticker: V.US
Price: $211.40
Target price: $273.50
Growth potential: 29.4%

The company reported strong results for the first quarter of fiscal 2022 (coinciding with the fourth calendar quarter of 2021):

  • EPS increased by 28.8% YoY to $1.83. Market expectations were at $1.70.
  • Net profit rose to $3.96bn, up 26.6% YoY.
  • Net income was $7.06bn, compared with a median forecast of $6.79bn.
  • The net profit margin is 56.1%.

A key driver of Visa's financial performance was a resurgence in travel and consumer activity. The corporation maintains medium- and long-term growth prospects amid the digitalisation of the financial sector. At the same time, the issuer has strong margins and a strong balance sheet.

Buy Visa >>

Alphabet (GOOGL.US)

Ticker: GOOGL.US
Price: $2554
Target price: $3485
Growth potential: 36.5%

The company confirmed its market leadership with its performance during the quarter.

  • Revenue of $75.3 billion was 32% higher than last year. The result beat Wall Street expectations by 4.9% (the estimate was $71.8bn).
  • EPS was $30.69, although analysts had forecast $27.28. The real figure is 38% higher than a year earlier.

Google executives are running the business successfully and making good money for their shareholders. In all 15 years of trading on global stock exchanges, the holding company's share price has never fallen below its initial valuation; on the contrary, the stock price is rising year after year.

Alphabet has been a growth driver for 10+ years, and its small businesses are also gaining momentum.

Buy Alphabet >>

Amazon (AMZN.US)

Ticker: AMZN.US
Price: $3015
Target price: $4200
Growth potential: 39.3%

The online shopping and cloud services giant surprised Wall Street with a rise in profits in the fourth quarter.

  • The company increased its advertising sales by 32% year on year to $9.7bn, with Amazon earning $31bn 一 7% of total revenue from advertising for the full year.
  • The company's sales amounted to $137.4 billion, a 9% increase from a year ago.
  • Revenue from Amazon Web Services (AWS) cloud services was $17.8bn, up from estimates of $17.4bn.

With a capitalisation of more than $1.5 trillion, Amazon still manages to grow revenues in key segments, such as its AWS cloud business, by 40% a year. It is one of the key profit centres for the business.

Amazon is a company with too many positive catalysts to ignore and recent weakness provides an opportunity to enter an attractive asset.

Buy Amazon >>

Netflix (NFLX.US)

Ticker: NFLX.US
Price: $344
Target price: $515
Growth potential: 49.7%

Netflix is the "king of content". The company generated $7.7 billion in revenue for Q4 2021, up 16% from $6.64 billion in the same period last year.

At the beginning of 2022, the platform had 222 million paid subscribers. The total addressable market (TAM) is estimated at 800-900 million users, and Netflix estimates penetration at only 25%, setting the stage for further growth.

Buy Netflix >>

Microsoft (MSFT.US)

Ticker: MSFT.US
Price: $282
Target price: $375
Growth potential: 33%

Microsoft's results have exceeded Wall Street's expectations for the past four quarters. According to the company's latest Q4 report, Microsoft reported revenue of $51.7 billion, a 20% increase over the same period last year. The company's cloud computing segment has been a major driver of revenue growth, and Azure is an integral part of that growth.

The issuer is strengthening its market position through strategic manoeuvring and industry diversification. Microsoft recently bought Activision and is looking to capture a large share of the global gaming market. Microsoft is also looking to capture a share of the emerging metaverse market through AR/VR products.

Buy Microsoft >>

Goldman Sachs (GS.US)

Ticker: GS.US
Price: 319.8
Target price: $448
Growth potential: 40%

Goldman Sachs is one of the world's leading investment banking and financial institutions. In 2021, the company generated $59 billion in annual revenues and $21.6 billion in net income. This was more than 60% higher than the previous historical high. Cash and cash equivalents at the end of the period stood at $261 billion, confirming the issuer's strong balance sheet.

Goldman Sachs is a healthy, growing company that has weathered the pandemic and achieved record results during it. We have seen a clear progression of growth on the back of solid business performance over the past 5 years. The average revenue growth rate is 16% per annum.

Buy Goldman Sachs >>

Chipotle Mexican Grill (CMG.US)

Ticker: CMG.US
Price: $1532
Target price: $1950
Growth potential: 27.3%

Chipotle Mexican Grill is a chain of 3000 fast-food restaurants in the US. In the fourth quarter, revenues grew 22% year on year to $2 billion, driven by new openings and a 15% increase in like-for-like sales.

The restaurant giant has offset rising food and labour costs by raising prices on menus. As a result, despite the sharp rise in costs, operating margins at the restaurant level and across the company as a whole rose to 20.2% 一 a huge advantage in the face of high inflation.

The company's long-term strategy is to open more than 7000 restaurants in North America alone. Chipotle plans to increase the number of its establishments by 8-10% a year and open up to 250 restaurants in 2022. This will contribute to the growth of the business.

Buy Chipotle Mexican Grill >>

DuPont de Nemours (DD.US)

Ticker: DD.US
Price: $68.50
Target price: $97
Growth potential: 41.6%

DuPont de Nemours 一 one of the world's largest producers of chemical and specialised materials. The company is now in a period of transition, shifting its focus from low-margin chemical companies to sectors with long-term growth potential.

DuPont recently announced the $5.2bn acquisition of Rogers Corporation, a purchase that gives the issuer access to long-term, high-growth markets including electric vehicles, 5G and clean energy. Once the deal is completed, the company will enjoy more stable earnings and a higher growth rate. Also, DuPont remains significantly undervalued compared to its specialised chemical and diversified peers.

DuPont's financial results for the fourth quarter were better than expected. Revenue was $4.27bn (+13.9% YoY). The company also raised its dividend by 10% 一 to $0.33 per share, and approved a $1bn buyback programme.

The company expects EPS for the full year 2022 to be in the range of $4.60 to $4.90 (consensus $4.87), up 10% from 2021.

Buy DuPont de Nemours >>

How to Buy Shares

If you don't have an investment account yet, open it now: this can be done online, in just 10 minutes. All you need to do is fill out a short form and verify your account.

Once your account has been opened, you can buy shares in any of the following ways, whichever is more convenient to you:

1. Freedom24 Web Platform: In the Web Terminal section, type the company ticker in the search box and select the company in question from the results. Open a secure session in the trading window on the right, select the number of shares you want to buy, and click Buy.

2. Freedom24 iPhone App and Android: Go to the Price screen and tab the search icon in the top right corner. In the search dialog that shows up, type the company ticker and select the company in question in the search results. You will then see the stock in the market watch; tap it and go to the Order tab in the dialog that shows up. Specify the number of shares you want to buy and click Buy.

*Additional information is available upon request. Investment in securities and other financial instruments always involves risks of capital loss. The Client should make himself aware at his own accord, including to familiarize himself with Risk Disclosure Notice. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Commissions, fees or other charges can diminish financial returns. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and do not constitute an investment advice service. The recipient of this report must make their own independent decisions regarding any securities or financial instruments mentioned herein. Information has been obtained from sources believed to be reliable by Freedom Finance Europe Ltd. or its affiliates and/or subsidiaries (collectively Freedom Finance). Freedom Finance Europe Ltd. do not warrant its completeness or accuracy except with respect to any disclosures relative to the Freedom Finance Europe Ltd. and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated.

  • Sources of information

  • Recommendation evaluation methodology in accordance with Terms and Conditions of Market Research Use

    Freedom Finance analysts perform a three-stage analysis. They select a promising industry based on the latest news, statistics and industry-specific metrics. They assess the supply and demand situation and its future development dynamics. Industry’s investment attractiveness is mostly affected by the forecasted market growth rates; total addressable market, player concentration level and likeliness of a monopoly formation, as well as the level of regulation by various entities or associations.

    The assessment is followed by the comparative analysis based on the selected sample. The sample comprises companies with a market capitalization of over USD 1 billion, but there is space for exceptions (when the suitable level of liquidity for company’s securities is available on the stock exchange). The selected companies (peers) are being compared against each other based on multipliers (EV/S, EV/EBITDA, PE, P/FCF, P/B), revenue growth rates, marginality and profitability (operating income margin, net income margin, ROE, ROA), and business performance.

    Having completed the comparative analysis, the analysts carry out a more in-depth research of the news about the selected company. They review company’s development policy, information about its current and potential mergers and acquisitions (M&A activity), and assess the efficiency of company's inorganic growth and other news about it over the past year. The main objective at this stage is to identify the growth drivers and evaluate their stability, as well as the extent of impact they have on the business.

    Based on all the data collected, the analysts determine the weighted forecasted figures of company’s growth rates and proposed business marginality, which are used to calculate the company’s multiplier-based estimated value. The said value enables setting the stock price target and stock value growth potential.

    The expected timing of the idea implementation is set depending on the current market situation, volatility level and available forecasting horizon for industry and company development. The forecasting period is normally set between 3 and 12 months.