A rotation from growth or momentum stocks to value is happening in 2021 as the Federal Reserve embraces a more hawkish tone. This trend explains why the tech-heavy Nasdaq 100 index has slumped by more than 2% this year. This article will look at the top 3 value stocks to buy in 2022.
Deere & Company
Deere (NYSE: DE) is one of the leading American equipment manufacturers. The company has a total market capitalization of over $111 billion and annual sales of over $43 billion. It is also a highly profitable company that had a net income of over $5 billion in the past fiscal year.
Deere manufactures some of the best-known products in the agriculture and infrastructure industry. Indeed, its products like combine harvesters and excavators have their leading market share.
Deere had a difficult year in 2021. The company faced criticism for its right to repair policies that made it almost impossible for people to repair their equipment. It also suffered a long strike by some of its workers.
These issues explain why the Deere stock price crashed by about 17% from its highest level in September to its lowest level in November.
Therefore, with these issues behind it, the stock will likely bounce back considering that the average estimate is for it to rise to $406.
Ford (NYSE: F) has done well in the past few months. The Ford stock price jumped by more than 173% in the past 12 months, bringing its total market capitalization to more than $94 billion. Ford is a value stock that has been around for years.
The Ford stock has jumped sharply as investors cheer the company’s lineup of electric cars. For example, the Ford F-150 Lightning already has thousands of reservations.
Indeed, analysts believe that as a separate company, Lightning would be bigger than Ford itself. For example, Rivian is valued at more than $80 billion even though Lightning has more reservations. Therefore, the stock will likely keep rising this year.
Phillip Morris (NYSE: PM) and other tobacco companies always operate at a relatively low valuation multiple. The situation has worsened in an era when most woke money managers are moving to Environment, Social, and Governance (ESG) criteria.
Philip Morris is a cheap and undervalued value stock that is trading at a PE multiple of 14. The PM stock has more room to grow considering that demand for tobacco will keep rising as most countries reopen. According to Webull, analysts have an average target of $107, which is higher than the current $88.
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