Top
Image Alt

The Investing Box

  /  Editor's Pick   /  1 FTSE stock that could double my money in 2022

1 FTSE stock that could double my money in 2022

macro shot of computer monitor with FTSE 100 stock market data in trading application

At the start of each calendar year I am on the lookout for FTSE stocks that could bolster my portfolio in the year ahead and beyond. Focusrite (LSE:TUNE) is one stock I believe could double my money in 2022. Here’s why.

Sweet music

Focusrite is a designer and manufacturer of audio equipment and software. More specifically, it professes to be one of the best in the world at making audio interfaces. An audio interface is key to ensuring music is recorded well ready for distribution. Prior to this, Focusrite used to also make music consoles before technology evolved.

As I write, Focusrite shares are trading for 1,460p per share. At this time last year, shares were trading for 976p, which equates to a 49% return.

Why I like Focusrite

The music industry took a major hit when the pandemic began back in 2020. With restrictions in force, many events, gigs, and concerts of all shapes and sizes were cancelled or rescheduled. With the vaccine roll out and pandemic easing from its peak, demand for music and audio equipment is rising once more. In addition to this, Focusrite also possesses a home studio product range that mitigated the impact of the pandemic.

Focusrite’s released full-year results for 2021 in November which helped support my belief it could be a fruitful FTSE stock to add to my holdings for the long term. It confirmed revenue increased by 34% compared to 2020 levels. Gross margin increased by 2.4% and this helped boost operating profit by a mammoth 353% compared to 2020 levels. Net cash also increased boosting a healthy balance sheet. The cherry on top was a dividend of 5.2p per share too.

Focusrite’s increased demand, full-year results, and current pandemic outlook have led analysts to estimate 2022 revenue will surpass 2021 revenue by at least 2%. If this were achieved, I believe Focusrite shares could double my money in 2022. Over the past five years, shares have returned just short of 600%, so a 100% return is feasible in my opinion.

FTSE stocks have risks

Focusrite’s current momentum could be derailed by the ongoing pandemic. Despite vaccine roll out and pent up demand helping boost financials and performance, any new variant of the virus could lead to restrictions and cancellations of events. This could hamper momentum and projected growth. In addition to this, competition in the music equipment industry is intense. All firms out there will be attempting to recover from pandemic woes and this could also affect any progress for Focusrite.

At current levels I would add Focusrite shares to my holdings. It is a FTSE stock with a track record of growth and recent results are encouraging. Analysts also seem to back the stock to grow with recent projections. Focusrite is on an upward trajectory, is being boosted by pent up demand, and pays a dividend. I believe I could double my money in 2022 if I add the shares to my holdings now.

The post 1 FTSE stock that could double my money in 2022 appeared first on The Motley Fool UK.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

More reading

Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Focusrite. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.