10 Top Stocks to Consider in 2022

Investors hoping for a respite from the volatility of the past two years haven't had their prayers answered.

2022 begins with the omicron variant of the coronavirus sweeping the country, inflation at a 40-year high, and fears that rising interest could put the brakes on economic growth and stock market gains.

In this kind of an environment, it's probably a good idea to revisit some of your holdings and see if they're still a good fit. Have the businesses changed? Are the valuations stretched?

If you're looking to add some new stocks to your portfolio, here are 10 that look poised to outperform the market this year.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Meta Platforms (NASDAQ: FB), the company formerly known as Facebook, has a lot going for it this year.

The stock enters 2022 looking cheaper than any of its big tech peers, trading at a price-to-earnings ratio of just 23, less than that of the S&P 500, even though it consistently outperforms growth expectations.

The company has no intention of slowing down, with plans to add 10,000 new employees to its Reality Labs division, which is committed to virtual reality and augmented reality. Meta just signed a lease in Austin, Texas, for 589,000 square feet, a big move at a time when many companies are moving away from offices.

Aside from Facebook's domination of social media and digital advertising, what makes the stock so intriguing is its potential in the virtual world of the metaverse. Oculus headset sales soared over the holidays, and the company is reformatting its reporting segments to report Reality Labs as a separate segment from its family of apps.

If the numbers on Feb. 2 impress the market, the stock could easily surge.

ALSO READ: Why Facebook Is a Must-Own Metaverse Stock

If you're looking for stocks that are primed for a comeback, Pinterest (NYSE: PINS) is a top contender.

The social media stock plunged in 2021 after its user base shrunk as it lapped the high-growth months from the start of the pandemic.

However, revenue and profits have surged and the stock now looks cheap, especially for a company that should return to growth once the user decline bottoms out.

Pinterest currently trades at a P/E ratio of just 30 even though the company still has a promising growth path ahead of it, especially as it invests in new features for advertisers and users. The image discovery engine is unique in the social media space, and it's especially appealing to advertisers as many of its users come to the site looking to purchase something.

Additionally, the company's profitability has soared in the past two years, showing the scalability of its business model.

Like many growth stocks, MercadoLibre (NASDAQ: MELI) has been hit hard in recent months, with shares down 40% from its peak in September, in line with a broader rotation out of growth stocks.

However, MercadoLibre's business is still rock solid as it's the biggest e-commerce company in Latin America and fast expanding in markets like digital payments and logistics.

Its revenue jumped 73% on a currency-neutral basis in the third quarter, driven by 59% growth in total payment volume to $20.9 billion and 30% growth in gross merchandise volume to $7.3 billion.

As businesses like digital payments grow, the company is also seeing profitability soar as operating income nearly doubled in the quarter to $160.4 million.

With an expanding network of competitive advantages and a price-to-sales ratio of less than 10, MercadoLibre looks like a great bet for long-term growth.

The ad tech industry has taken off during the pandemic as digital advertising continues to grab market share from traditional channels like television and as software that optimizes ad campaigns gets more sophisticated. Meanwhile, connected TV (CTV), or ad-driven streaming, has also emerged as the next frontier in the ad market.

These are all tailwinds for Perion Network (NASDAQ: PERI), one of the more under-the-radar ad tech stocks. Unlike most of its peers, which serve either brands or publishers, Perion connects the two parties through its intelligent hub. The company is also growing fast in CTV and with the help of acquisitions, including Vidazoo, a video monetization technology company.

Perion expects 29% revenue growth this year on top of 42% growth in 2021. However, the stock still looks cheap at a P/E of less than 25.

ALSO READ: This Wildly Undervalued Stock Still Has 10X Potential

E-commerce has also boomed during the pandemic, and that propelled CarParts.com (NASDAQ: PRTS) to big gains in 2020.

New management took over the company in 2019 and changed strategy, streamlining the business under the CarParts.com brand and opening new warehouses to provide faster delivery and greater capacity.

As a result, sales have surged, up 33% in 2021 after jumping in 2020 as well. Over the long term, the company is targeting 20% to 25% revenue growth and 8% to 10% adjusted earnings before interest, depreciation, and amortization (EBITDA) margins.

And higher prices for new and used cars also favor the company as vehicles on the road get older and require more maintenance. At the moment, shares look cheap at a P/S ratio of less than 1, a great price for a fast-growing e-commerce company.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Lumber prices skyrocketed last year due to supply constraints and as demand for home-improvement products soared during the housing boom.

While prices have come down since that peak, they still remain at elevated levels and have been rising in the past few months. They are also likely to remain above prepandemic levels as there is still a housing shortage across North America and higher home values allow for more home-improvement projects.

That's good news for lumber companies, in particular Resolute Forest Products (NYSE: RFP), a Canadian timber company that provides a range of paper and wood products but has been pivoting toward wood.

The company made bumper profits in 2021 thanks to high lumber prices, and it looks poised to do it again in 2022. The stock currently trades at rock-bottom P/E ratio of less than 3 based on 2022's expected earnings. If that holds true, investors are likely to get another special after getting a $1-per-share one-time payout back in the spring, getting rewarded in multiple ways.

Brick-and-mortar retailers struggled through the pandemic, but The Children's Place (NASDAQ: PLCE) bucked the trend in 2021, posting record profits as sales returned and the company's profitability benefited from store closures during the pandemic and before it. The company has long had a store rationalization strategy in place, gradually closing down locations and shifting its business to e-commerce.

That strategy seems to be paying off as 45% of its revenue came from the digital channel in the third quarter, which the company said is tops in the industry.

Given that momentum, The Children's Place seems poised for another strong performance in 2022, and the stock looks like a bargain at a P/E ratio of just 7.

ALSO READ: Top Apparel Stocks for 2022

Another retailer that looks poised to outperform in 2022 is Target (NYSE: TGT).

The big-box chain has posted stellar results over the past two years as it's benefited from a unique omnichannel approach, investing in same-day fulfillment services like curbside pickup that have seen monster sales growth during the pandemic.

Target is unique in the retail industry as a multicategory chain that has stores in both urban and rural locations at a range of sizes. In fact, it's opening small-format stores in underpenetrated neighborhoods to take advantage of that market opportunity and leverage its same-day fulfillment infrastructure in high-density areas.

Currently, the stock trades at a P/E of just 17, which seems too cheap for a company with its growth potential.

The internet crushed the newspaper industry, but lately media companies have been bouncing back with the help of paywalls, and none is thriving more than The New York Times (NYSE: NYT).

After years of dwindling print subscriptions weighing on its performance, the company has hit a tipping point recently with digital subscriptions making up the bulk of its business and growing briskly. Additionally, advertising has come roaring back after a lull early in the pandemic.

The streaming boom also gives the company a number of new ways to monetize its content. It's partnered with Hulu on "The Weekly" series and is investing more in audio content like podcasts. It's easy to imagine a future in which the company is providing content like cooking shows, documentary-style shows, or news and sports talk shows for both its own subscribers and on other streaming services.

It also recently acquired The Athletic, strengthening its position in sports and showing its ambitions to be more than just its namesake product. It's also an important component to rebuilding its media empire.

While the delta and omicron variants have put a damper on the pandemic recovery, eventually it will end. When it does, Revolve Group (NYSE: RVLV), an influencer-driven online apparel company, is sure to be a winner.

The company sells higher-end clothing with a focus on occasion wear for events like weddings, parties, and music festivals. As those gatherings return, sales are likely to boom. In fact, they're already surging, up 62% in the third quarter.

Revolve showed off its profit potential earlier in the pandemic as earnings actually rose in 2020 even as revenue was flat. Now, the company is planning to spend more to invest in the business, but it's likely to get significant tailwinds once the omicron wave passes.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

While it's a smart move to consider stocks poised to do well in 2022, it's better to buy stocks to hold for the long term. Even the best stocks won't beat the market every year, but their winning years will more than make up for the losing ones.

Many of the stocks mentioned here have proven their growth potential in the past, have brought momentum into 2022, and look undervalued compared with their peers. That's a great combination to look for in long-term winners.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman owns CarParts.com, Inc., MercadoLibre, Meta Platforms, Inc., Perion Network, Pinterest, Resolute Forest Products, Revolve Group Inc, Target, and The Children’s Place. The Motley Fool owns and recommends MercadoLibre, Meta Platforms, Inc., Pinterest, and Revolve Group Inc. The Motley Fool has a disclosure policy.