2022 has been an interesting year for the stock market. During the first two and a half months, the S&P500 the index was down about 13% from its 52-week high. In recent weeks, however, the story has been completely different, with the S&P 500 rallying about 10% from lows reached in early March.
Despite this, many stocks are still trading well below their 52-week highs, which could be a good buying opportunity for investors to grab strong companies trading at a discount, in part because they have been caught in the massive sale. Four obvious stocks you can buy today are marqueta (m² 0.50% ), Assets received ( UPST 0.01% ), Chicken head insurance (GSHD 1.24% )and T price. Rowe (TROW 0.70% ). Let’s find out a little more about these four actions.
1. Marqueta: Down 69% from its 52-week high
The pandemic has changed our lives in many ways. One notable change has been how our lives have gone digital, including how we pay for things. This change is what gives Marqeta momentum. Marqeta specializes in creating payment products for businesses using its modern card issuance platform, helping them keep pace with the digital age.
The company creates physical and digital card payment solutions for businesses looking to keep pace in an increasingly digital world or enable new businesses to rethink the way payments are made.
This expertise is why Marqeta has partnered with several large companies for its payment solutions, including Goldman Sachs, Alphabet, by Dash, Uberand To assert. Marqeta earns money on a per transaction basis – a revenue model similar to Visa and MasterCard. It also extends usage-based discounts to these long-term customers to encourage them to use the products even more.
The growth of the company has been meteoric. Since 2017, the company’s total processed volume has grown 50-fold. This growth continued last year, with Marqeta’s total processed volume growing 85% to $111 billion, helping exceptional revenue growth of 78% to $517 million. However, the company reported a net loss of $164 million last year, largely related to an increase in stock-based compensation.
Despite these losses, Marqeta’s growing network and revenue makes me optimistic about this company’s long-term growth trajectory, which could be a bargain at its current price of just under $12 per share.
2. Upstart: Down 71% from its 52-week high
Upstart Holdings is a fintech looking to change the way consumer lending is done. The company wants to make loans accessible to everyone, including those who are not considered creditworthy by traditional credit scores. It does this by using artificial intelligence (AI) to provide personal loans.
Upstart connects potential borrowers with banking partners who make and hold these loans. Upstart receives referral commission and platform fees in return from its partners. Last year, nearly 70% of Upstart’s loans were fully automated.
The company is growing rapidly and last year its trading volume increased by 241% to $11.7 billion. This volume propelled meteoric growth, with revenue up 264% year-over-year to $849 million. Net income fell from $6 million in 2020 to $135 million last year.
Investors are optimistic about the lender for good reason. On the one hand, it is growing rapidly, seeing the volume of transactions explode, leading to growth in turnover and net income. The company is already profitable and has been since its IPO, an impressive feat.
Additionally, it extends its reach to car loans. This market is seven times larger than the consumer loan market, and Upstart wants to make a splash. After increasing the number of its dealership partners, Upstart expects to see auto financing volume of $1.5 billion in 2022, which could drive its next phase of growth.
3. Goosehead Insurance: Down 54% from its 52-week high
Goosehead sells insurance. The company began selling insurance from its headquarters, but expanded into franchise arrangements in 2012. It saw a franchise model as the best way to drive business growth and scale, which paid off. By the end of 2021, Goosehead had nearly 1,200 franchises in operation, and another 953 were ready for onboarding.
The growth of the company has been meteoric with this model. Since 2017, its corporate chain has seen its premiums increase at a compound annual growth rate (CAGR) of 31%, while its franchise chain has seen its premiums increase at a CAGR of 56%.
While the company itself isn’t the most exciting, its business model sets it up for long-term revenue growth. When he launches a franchise for the first time, Goosehead receives 20% royalties. Franchise contracts have a term of 10 years with two five-year renewals. When franchisees renew their terms, Goosehead’s royalties jump to 50%.
Management prefers these revenue streams because they are recurring and more predictable, which they believe will propel the long-term growth of this insurance agency. With a track record of steady growth and a royalty structure that benefits it over the long term, analysts are optimistic about Goosehead, giving it a 93% upside from here.
4. T. Rowe price: down 32% from its 52-week high
T. Rowe Price is an investment advisor for individuals, mutual funds and separately managed accounts. The investment firm has done well to continue growing its business despite some headwinds from the growth of passive investing.
While passive investing has hurt active managers like T. Rowe Price, it has grown its assets under management (AUM) at a CAGR of 12% over the past decade. Last year, it saw outflows of $28 billion, but still grew its assets under management by $170 billion on the back of exceptional investment performance.
Recent investor concerns stem from management’s forecast for 2022 that net flows would likely fall short of its 1% to 3% growth target. However, the company believes that active management could play a valuable role if inflationary pressures persist in markets, helping investors navigate a difficult investment environment.
Despite these headwinds, T. Rowe Price has done an excellent job of managing its cash flow. Last year, the company spent $1.7 billion in dividends, another $1.1 billion in share buybacks, as well as $2.5 billion to acquire Oak Hill Advisors, LP
Even with all that spending, the company still has $2 billion in cash and liquid assets. Strong cash management is a key reason T. Rowe Price has increased its dividend every year for 35 consecutive years, making it a member of the exclusive club of dividend aristocrats. That, coupled with its price-to-earnings ratio of 11.8 and dividend yield of 2.9%, makes T. Rowe Price a great stock to add to its current price.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.