Each year, the team at the SmallCap Informer stock newsletter releases a list of 10 stocks that offer opportunities for the year ahead. Current subscribers may log in to the Subscribers section of the SmallCap Informer website right now to download their copy. Non-subscribers should continue reading to learn how to get their copy of the report.
For 2022, our general economic and market outlook is for continuing unpredictability. Rising inflation and increased interest rates are almost certainly going to be part of the plot. Energy prices and supply chain issues will almost certainly play leading roles, while the pace of home construction may well get demoted to a supporting role. The villains in the tale—Covid-19 and its variants—have the power to thwart the best laid plans of investors.
Of course, what is twelve months in the lifetime of any investor? Our objective is to identify companies that stand the test of time, and deliver superior returns over five or more years. As we look ahead to 2022, this aim should remain foremost.
With eyes firmly on the long-term horizon (but sneaking a glance now and then at the current state of the world), we are pleased to present our Top Small-Cap Stocks for 2022. These companies represent our best ideas for above-average total return over the next five years (but quite possibly with an edge over other stocks in 2022 as well).
All of these stocks are included in our current SmallCap Informer newsletter coverage list, winnowed down to find companies that have:
- A history of strong and steady growth of EPS and revenues, and tailwinds that will drive future growth.
- Stable or growing profit margins that are robust when compared to peers and industry averages.
- Reasonable P/E ratios relative to their histories, expected future growth, and industry trends.
Very few companies are able to pass this 1-2-3 checklist, and so the stocks in this Special Report are an uncommon lot.
This year, we have divided our list into two separate groupings: the first is a more traditional collection of five high-quality smaller companies, and the second is a set of “deep value” growth companies.
This latter group includes much smaller companies that are largely overlooked by Wall Street and most have seen their prices decline in recent times. However, their fundamentals still appear strong, and conditions are good for some manner of catalyst to come to play in 2022 that has good potential to boost their fortunes. Whether or not Wall Street will notice is another question. In the end, though, the stock market is a marathon, not a beauty pageant, and quality will (almost) always triumph at the end of the day. Needless to say, these opportunities are more speculative in nature.
As always, conduct your own research before investing to determine the suitability of any recommended stock for your personal portfolio objectives, personal preferences, and risk tolerances.
The SmallCap Informer's stock picks ended 2021 with a 34.2% compounded annual return compared to just 24.7% for the S&P SmallCap 600 index. SCI has outperformed the small-cap index in the last one, three, and five years, as well as for the lifetime of the newsletter since 2012. See our complete performance results.
Not a subscriber? Use Promo Code TOPPICK22 to subscribe to the SmallCap Informer and receive our Top Small-Cap Stocks for 2022 Special Report, as well as a year's worth of monthly small company stock recommendations and updated buy/sell prices for each of the 49 high-quality small company stocks covered in the newsletter.