For most investors, 2022 was nothing short of a disaster. With the S&P 500 down nearly 20% and the NASDAQ falling by one-third, big winners were few and far between. Even stocks that seemingly had everything lined up for them fell prey to the negative trend of the overall stock market.
On the plus side, this potentially sets up an opportunity for investors that have some dry powder at the start of 2023. Plenty of stocks have fallen 20%, 50% or even more from their highs yet still have valid business models and future earnings growth.
Of course, just because a stock has fallen from its high doesn’t make it a screaming buy. If interest rates and/or inflation continue to rise in 2023, earnings growth will continue to slow, and stocks may suffer as a result. But each of the stocks listed below has some combination of growth and/or value that should help it withstand further selloffs and spring to life when markets recover.
As always, consult with your financial advisor before you buy any stocks to ensure that they’re a match for your personal investment objectives and risk tolerance.
PayPal is one of the leading payment processors in the world, but it’s still finding its footing after the pandemic. In 2020, shares skyrocketed as the world stayed at home, gaining over 107%. But those gains were followed by losses of about 20% in 2021 and more than 60% in 2022. Although revenue growth has slowed, the company did top earnings estimates in its most recent report, and it’s gaining support from Wall Street investment houses like Morgan Stanley.
For a “blue chip” stock, Disney has endured some pretty significant declines. In 2022 alone, shares of the Mouse House fell close to 44%, after an initial decline of about 15% in 2021. However, big catalysts may be afoot at one of the most recognizable companies on Earth. Former CEO Bob Iger, who chaired the company for 15 of its best years, returned to the fold in Nov. 2022. If nothing else, this could reverse the company’s most recent run of bad fortune, and it could potentially herald Disney’s return to its former glory.
The times are few and far between when investors can pick up shares of Amazon down more than 50% from their highs.If you’re a believer that Amazon will remain the dominant and driving force in e-commerce going forward, picking up shares could be an opportunity. Analysts are united behind a consensus “strong buy” rating on the stock, and their average price target sits about 60% above current levels.
Tesla is one of the most volatile stocks in the S&P 500, offering both risk and reward for investors. The stock posted shocking gains of 700% in 2020, then followed through with another 50% in 2021. Unfortunately, the stock completely cratered in 2022, suffering through its worst year ever as it fell about 65%. But the company has many potential catalysts for 2023, including new electric vehicle rebates, rising demand for solar technology and perhaps most important of all, CEO Elon Musk talking about giving up the helm of Twitter.
Costco stock fell a touch under 20% in 2022, right in line with the S&P 500. Although the stock is a perennial champion, fears of an upcoming recession helped drag down shares in 2022. However, in early 2023 Costco announced that its December sales were above expectations, popping the stock and perhaps setting the stage for a much better 2023. Even if sales were to moderate a bit, unlike most retailers, Costco has an active fee program in its back pocket, with customers renewing their $60-to-$120 annual memberships at a more than 90% clip.
Meta Platforms (META)
Meta Platforms seems to have run into nothing but trouble since it changed its name from Facebook in Oct. 2021. The stock plummeted more than 64% in 2022, thanks in large part to the collapse of the cryptocurrency market and, correspondingly, interest in the metaverse. However, this former high-flying growth stock has rarely traded at the meager 11x forward earnings multiple it now sports, and it’s still run by one of the most visionary CEOs in tech, Mark Zuckerberg, so many analysts view it as a potential bounce back candidate.
Generac Holdings (GNRC)
Generac Holdings is likely the most unfamiliar name on this list to the average investor. But flying beneath the radar can be a good way for a stock to get a big kick because it means it is under-owned. If the stock starts moving higher, it can draw investor attention that amplifies its gains. Why might Generac Holdings soar in 2023? According to analysts at Northland Capital Markets, investors have gotten too caught up in short-term labor/installation problems at the power generation and management company and are overlooking strong end-user demand, making the shares – which fell over 70% in 2022 – a value.
Microsoft, even more so than most stocks on this list, didn’t post any major news to make it trade down to current levels. The global leader in software and the cloud,Microsoft is also set up to be an important player in the future of self-driving cars. Yet, the stock still fell a significant 28% in 2022, much more than the S&P 500 index. Analysts maintain a “strong buy” rating on the stock, and its industry-leading global position could help push shares up in 2023.
Match Group (MTCH)
In addition to its namesake Match brand, online dating company Match hosts a wide variety of apps and websites designed to help people connect from Tinder and Hinge to OKCupid, Upward and PlentyofFish. The company had a rough go of it in 2022, falling more than 68%. But the extremely strong dollar of 2022 played a big role in Match Group’s troubles, as more than half of its revenue comes from overseas. Add in a few snafus regarding new product delays and investors fled the stock in droves. But if inflation, interest rates and the dollar turn around, these could all act as tailwinds for the company, which is pushing customers towards higher-priced subscription plans.
Picking Apple as a winning stock in 2023 might not seem very adventurous, but it’s not a given that the stock will always rise. In fact, in 2022, the stock fell a significant 27%. But if you believe that the market averages in general will recover in 2023, you pretty much have to own Apple. As the largest company in the United States – and sometimes even in the entire world, depending on where it is trading – Apple is by far the biggest component of the S&P 500 index. It will be difficult to get a significant market rally if Apple isn’t leading the way.
More From GOBankingRates