2021 has been an outstanding year for the stock market in terms of growth. The S&P 500 has been on a rising streak since February 2021 and has appreciated by roughly 21%, year to date. However, will this growth continue in 2022? Well, I believe it’s possible for a few businesses out there.
But what are the best growth stocks to buy for 2022? Let’s take a look at my top two picks for next year.
A rising travel company: Booking Holdings
Booking Holdings (NASDAQ:BKNG) is an American travel technology firm that is well-positioned to earn full benefits from the recovery in the travel industry. At least, that’s what I think. The accelerating growth in travel coupled with the continuous increase in online and mobile bookings has pushed the firm’s revenue, for the third quarter, near to the pre-pandemic levels. That’s an impressive comeback, I feel. And it’s why it’s on my list for best growth stocks to buy for 2022.
The recent headlines of the travel company’s back-to-back acquisitions have brought it into the limelight. In an attempt to increase its footprint in the flight space, it plans on buying Sweden-based Etraveli Group for $1.83bn. In addition, it has also announced its plan to acquire hotel distributor Getaroom, a Texas-based B2B platform. I feel that the business’ progression towards penetrating the hotel business right before the holiday season is a smart move to boost revenue.
However, this growth potential hasn’t gone unnoticed by the market since the stock is trading at quite a lofty valuation. Moreover, increased competition from other travel companies along with its sizable debt pile might lead to problems later down the line. If the worse comes to pass, the share price could be pushed in an unfavourable direction.
Regardless, I still feel the firm’s accelerated recovery has set Booking Holdings on a path toward continuous growth.
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World’s premier airlines: Boeing
Boeing (NYSE:BA) is the most commonly known name in the aerospace industry. It’s recognised for its strong presence in the commercial airline industry and is the top supplier of government aircraft. Additionally, with a somewhat monopolistic position in the commercial aviation and defence industry, the company has managed to stay at the forefront. And that’s despite the grounding of some of its aircraft models in recent years. It’s worth mentioning that aerospace is a high-cost industry. Therefore, the low threat of new competition is minimal for Boeing.
No doubt, air traffic is on the rise globally. But on the other hand, fuel prices are also exceptionally high. Additionally, a manufacturing quality issue in Boeing Dreamliner aircraft has halted delivery. Personally, I’m getting concerned over this as the firm might not be able to achieve its set targets. As a result of the slow production of Dreamliner, the company is incurring continuous losses.
Having said that, the limited competition for a company like Boeing and the rise in demand for travel makes me believe Boeing is one of the best growth stocks to buy in 2022.
Final thoughts on the best growth stocks to buy
Growth Stocks have always been an excellent source of high returns for investors willing to take on more risk. Over the long term, I believe these two businesses have great potential. But in the short-term, I wouldn’t be surprised to see some volatility in the share price while the pandemic continues to influence the travel industry.
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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned at the time of writing. Views expressed on the companies, assets and strategies mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.
