Best Shares To Buy NOW - January 2022
All these shares have the potential to outperform the market in January
In this article, we dive into the best shares to buy in January 2022. The stock markets are highly volatile at the moment, mainly due to news about a new coronavirus variant.
That said, this is a perfect time to buy into stocks that have the potential to give a good ROI not just this month, but all the way into 2022. You will also find this analysis useful if you are new to the stock markets.
While this analysis is about shares to buy in January 2022, stay tuned because we have analysis for every month. The goal is to ensure that you are up-to-date on top-rated stocks every month.
Top 5 Shares to Buy Right Now
Before we do a more comprehensive analysis, here is a snapshot of our top 5 stock picks:
You can buy all of these top shares, as well as many others, at eToro and pay 0% fees!
Best Shares to Buy NOW - January 2022
If stocks rebound within the month, our top stock picks could beat the market by a huge margin.
1. Blue PRISM - Workplace automation could push this stock to new heights
Automation has been speeding up over the past few years, and has accelerated in the last 2-years. This makes Blue PRISM (PRSM) one of the best stocks to buy this January.
Blue PRISM is particularly well positioned for growth due to the moves it has been making in the robotics market. Last month PRSM was named the market leader in the IDC market. Blue PRISM was given this award for its studio capabilities, and its pricing approach that is based on customer outcomes.
PRISM was also awarded for its advances in AI especially in digital work production. The company’s system works in such a way that automated jobs can be pushed to available digital workers without wasting time.
Blue PRISM’s potential as a top UK stock this month comes from the strengths of partnerships that it has made recently.
One of the partnerships it has made so far include one with Amazon Web Services. In early November, PRISM announced that through its strategic relationship with AWS, it would be in a position to offer clients automation services at a scale it had not been able to achieve before.
As part of this strategic alliance, PRISM will create SaaS in close partnership with Amazon Web Services. The goal is to come up with highly efficient bots, by leveraging the machine learning tools provided by Amazon.
The partnership with Amazon is a big deal, and could significantly increase the adoption of PRISM going into the future. By extension, this means a potential increase in revenues, and that’s good for its value growth.
PRISM’s market share is already in a growth trajectory. Still in November, Blue PRISM announced that it was looking into automating, and helping companies manage digital identities. According to Blue PRISM’s Senior Vice President of Technologies, the goal is to help companies securely handle the digital identities of their workers.
This is a big deal considering that identity security in this age of online work has become a huge challenge for corporations. It’s such a huge market that it could easily push up PRISM’s revenues by a huge margin, and by extension, drive up its value.
Aside from the exponential market growth rate, PRISM’s books are pretty good too. The company is in a good position to repay all its short term liabilities with ease. This is evident in its current ratio, which stands at 1.52, meaning it has more than enough resources to pay its debt obligations.
This is important for PRISM in that even if interest rates were to go up, the impact on operations would be minimal. With inflation fears quite real in the U.K and most countries globally, investing in companies that have healthy debt levels, and a strong asset-base is a plus.
From a look at its charts, PRISM easily qualifies as a stock worth buying this January. After a sluggish H1 of the year, PRISM has been in a strong bullish reversal for the better part of H2.
The potential for a continuation of the bull trend is evident in PRISM’s price action all through December. While most stocks started this month in the red, PRISM started strong. It opened the month above November’s high close, and it has held above it all through.
With buying volumes on the rise, and PRISM’s fundamentals getting stronger, January could be a good month. PRISM is also likely to enter 2022 stronger, and possibly test prices above GBP 1400.
Would you like to buy Blue PRISM stock?
Online grocery shopping has gone mainstream, not just in the UK but globally. Quite naturally, this has uplifted the fortunes of online grocery companies such as Ocado (OCDO).
Besides operating in a high-growth market, Ocado also has some strong fundamentals in its own right that make it a top player to watch in this market.
One of the factors that have recently uplifted Ocado’s fortunes is the news that Marks & Spencer was considering buying out the company. Marks & Spencer already has a 50% control of Ocado that it bought two years ago.
Besides the potential buyout, the most interesting thing is what M&S said about Ocado. Marks & Spencer believes that Ocado would give it a lot of growth opportunities, essentially signaling that Ocado was well-positioned for growth. From an investor standpoint, that’s a good reason to be bullish, especially now that the festive season is about to start, and online grocery shopping will shoot up.
Ocado has also been making some major moves towards automating its Customer Fulfilment Centers, with the goal being to cut costs. The latest of its move towards automation was the introduction of washing machine robots. This has completely eliminated the need for humans in these tasks, hence eliminating one aspect of total costs.
According to Luke Jensen, the Chief Executive of Ocado Solutions, the goal is for complete automation of everything from the gates to the fridge, while giving customers complete satisfaction all through the process.
However, the most interesting bit is that other retailers are interested in Ocado’s bots. This means selling bots is a potentially new revenue stream for Ocado. To show just how much potential Ocado has, the company has already entered into agreements with supermarkets in 8 major economies. Ocado also announced that it was in talks with supermarkets from another 5 countries.
These deals have got investors excited, and this has been reflected in Ocado’s price over the years. Ocado landed its first deal in 2017, and since then its shares have surged by over 700%. Now that it is landing more deals for its cleaning bots, Ocado is likely to keep gaining in value. This pretty much makes Ocado one of the best shares to buy this January.
The best part is that Ocado’s books also paint a picture of a healthy company, one with strong growth prospects. For instance, the company has its debt levels completely under control. With a current ratio of 4.0, Ocado has more than enough current assets to take care of all its short-term liabilities. This means it would be pretty much unaffected even if interest rates were to go up, as is expected could happen within the next two years.
On top of that, Ocado is generating enough cash flows, which is critical to its operations. This is evident in its positive operating cash flows of £153.1 million. With the company’s quarterly revenue growth rate of 21.40%, cash flows are likely to also go up over time.
Clearly, the fundamentals pretty much scream ‘buy’ for Ocado in the short term. But what about its price action?
Ocado has been in a bear trend since October. However, it seems to have found strong support around the GBP 1750 to GBP 1585 range. If by any chance this support level holds, the potential upswing is huge.
With all the positive news surrounding Ocado at the moment, a bullish reversal of its current price could see it test September highs of GBP 2920 at some point in 2022. Such potential easily makes it one of the best stocks to buy this January and hold all through 2022.
Should you be buying Ocado stock?
3. Argo Blockchain - Potential exponential growth driven by the crypto rebound
The crypto market has made many millionaires over the years. However, it is also extremely volatile, and wild price swings of up to 20% in hours are not uncommon.
It is this volatility that has made crypto-focused stocks like Argo Blockchain (ARB) very attractive to investors. The attraction is easy to understand – these stocks give investors exposure to the potential gains that come with crypto, minus the wild price swings.
Argo Blockchain easily stands out among stocks that have exposure to the crypto market. That’s because one of Argo’s core businesses is Bitcoin mining, and the company has invested in proprietary technology aimed at making its Bitcoin mining operations more efficient than its competitors.
You are probably wondering, with the crypto market in the red all through the first week of December, how is Argo Blockchain, a top U.K stock to buy now?
Well, consider the fact that despite the dips, Bitcoin’s price is up overall, since launch. Even after the recent dip that pushed it to a low of $42k from highs of $57k, Bitcoin has bounced back. It is now trading pretty close to $50k. All this has happened in a span of a week.
With the adoption by countries (El Salvador) and major investment funds, the price is likely to keep trending up long-term. This adds to the intrinsic value of companies like Argo Blockchain that are involved in Bitcoin mining.
Evidence of the impact that Bitcoin’s price has on Argo Blockchain’s performance is in Argo’s Q3 results that were released in October. At the time, Argo Blockchain announced that it had made a record after hitting an EBITDA of £19.3 million in Q3. Argo Blockchain attributed this to excitement after its launch of a sustainable cryptocurrency mining facility in Texas, plus its already existing mining operations.
Argo Blockchain also reported that in Q3, it mined a total of 597 BTC, and benefited from rising Bitcoin prices, and efficiency in mining. For context on how efficient Argo Blockchain’s mining operations are, it mines BTC with a gross margin of 120%, while the industry average is 85%.
With Bitcoin’s price on a rebound, combined with Argo Blockchain’s industry-beating gross margins, it is not hard to see why it is a top stock to buy this January. Besides, Argo’s Texas mining facility is expected to become operational in Q2 of 2022. Once it starts running, this facility will increase Argo Blockchain’s total hash rate to 3.7 Exahash. That’s more than double the current hash rate of 1.075 Exahash.
An increase in mining capacity pretty much guarantees Argo Blockchain revenue growth all through 2022, and the same could reflect in its price. This makes ARB a hot stock to buy this January with a view of 2022, and beyond.
Argo Blockchain’s potential for growth is also evident in how fast institutional money has snapped up its shares since it went public. Most institutional investors tend to go for large corporations for their safety and reliability. The fact that they now own more than 50% of this low-cap stock is an indicator that it is a credible company with lots of potential for growth.
Argo Blockchain’s books are also a pretty good validation of its potential as an investment. ARB has a profit margin of 40%, which is high by any metric. Argo blockchains also have a pretty high quarterly revenue growth rate of 412.80%. Clearly, these are the metrics of a growth stock, one that can easily double capital in a short time.
From a look at its charts, ARB is in a buy zone, a factor that makes it even more attractive as the top UK shares to buy in January. ARB is currently trading at GBP 94, a key multi-month support level.
With the cryptocurrency market on a rebound, there is a good chance that ARB could bounce off this support. In such a scenario, the potential upside is huge, with the first major resistance at GBP 150.
Would you like to buy Argo Blockchain stock?
4. British American Tobacco
The markets are highly uncertain at the moment. A few days ago, news of a new strain of the coronavirus sent markets tumbling. There are also looming inflation fears, and the possibility of Central Banks, not just in the U.K, raising interest rates. This means it is worthwhile to have a defensive stock like British American Tobacco (BATS) in a stock portfolio this January.
British American Tobacco operates in an industry that is pretty much unaffected by the volatility in the economy. Smokers will still smoke, regardless of whether there is inflation or not. On top of that, even if fears of a new coronavirus strain scares people into spending a lot more of their time indoors, those who smoke will still smoke.
On top of that, British American has made major inroads in the e-cig market, a factor that has helped it offset declining numbers of traditional cigarette smokers.
With such fundamentals, it is not surprising that insiders have been buying up BATS over the past year. Four months ago, one of the company’s non-executive directors purchased 102% more of this stock, a signal that they are bullish on its stability and value growth.
This followed an equally big purchase by the company’s Independent Chairman Luc Jobin who purchased £1.2 million more of the company’s shares. It is also noteworthy that no insider has sold BATS since 2020.
Insider activity is usually an indicator of the health of a company since insiders have a better understanding of a company than anyone else. In essence, when insiders buy, it is usually an indicator that they believe the value of the company will grow. In the case of BATS, insider buying is a positive indicator especially now that uncertainty levels are high in the financial markets.
Besides the fact that it is a defensive stock, British American Tobacco also doubles up as a growth stock. Its key area of growth is likely to be the e-cig market. Back in October, the U.S FDA okayed the marketing of e-cigs. This is likely to boost the revenues of top e-cig manufacturers such as British American Tobacco. British American Tobacco already has a head start on this front after it won an e-cig case patent infringement lawsuit against Altria.
For a defensive stock, British American Tobacco’s books look pretty good too. British American has a profit margin of 24.12%, and an operating margin of 43.64%. These are high margins that are usually seen in small-cap companies. It’s an indicator that British American has market dominance and that it is innovating to better meet the needs of its customers.
British American's cash flows also paint a picture of stability and growth. It has operating cash flows of £8.56 billion and levered free cash flows of £4.95 billion. These are indicative of a company liquid enough to comfortably handle everyday operations, while also taking advantage of emergent opportunities in the market.
To get an even better idea of why BATS is a good stock to buy in January, you need to look at its price action. BATS is currently bouncing off a long-term (multi-year) support level at GBP 2518. Buying volumes are on the rise too, an indicator that bulls are in control.
If BATS’s current upside momentum sustains all through the month, the key level to watch would be its multi-year resistance at GBP 3212.5. If BATS breaks this resistance, prices above GBP 4000 could be attainable within 2022.
With such potential, and the fundamentals backing it up, BATS makes for the common-sense UK share to buy this January and hold long-term.
Would you like to buy British American Tobacco shares?
5. Burberry Group
With the UK economy pretty much opening up, and vaccination rates high, the economy is likely to grow in the short to medium term. This means the rich are likely to start spending more freely on luxury items.
These macro factors make it worthwhile to keep an eye on luxury fashion stocks such as Burberry Group (BRBY). Besides macro-economic factors potentially in its favour, Burberry is making moves that could see its profitability grow over time. One of the major moves it has made is to expand store format. The idea is to reach more high-paying clients, grow market share, and by extension, revenues.
Burberry’s books also paint the picture of a stable company. The company’s cash flows, both operating and levered free cash flows are positive. They stand at £737.8 million and £629.41 million respectively. This is important for business sustainability especially in the fashion retail market in which Burberry operates.
Burberry also has strong quarterly growth rate figures, standing at 38.20% year-over-year. That’s an indicator that despite the challenges of the last two years, demand for high-end luxury items is still high. It is also an indicator that as the economy returns to normalcy, Burberry’s long-term prospects look good.
Burberry has a pretty good balance sheet too. It has a current ratio of 2.60, which means it has more than enough resources to cover all current liabilities. This means it is safe even if interest rates were to go up in the short to medium term. It also means that Burberry has the space to borrow if they need to expand or other valuable investment opportunities come up.
Despite its strong fundamentals, Burberry has taken a hit recently. This has a lot to do with short-term factors such as missing quarterly earnings targets. These are factors that have nothing to do with Burberry’s long-term direction when you consider the economy and the fact that the company is expanding.
Interestingly, the recent correction has put Burberry in a buy zone. All through the first week of December BRBY has been in the green. This is after it hit, GBP 1753.5, a key multi-year support level in November.
If the bounce off the multi-year support sustains for another week, then BRBY could be one of the hottest U.K shares to buy in January. That’s because the next target is at GBP 2219, a key resistance level for 2021. If this resistance is broken, then prices above GBP 2400 are possible in 2022.
Based on the fundamentals, and the fact that BRBY has bounced off a key support level, it easily comes off as one of the best stocks to buy now.
Should you be buying Burberry Group stock?
How To Find The Best Shares To Buy Now
Choosing good stocks to buy is no mean feat. Without proper analysis or an understanding of market dynamics, you can lose a lot of money.
However, you don’t have to worry, we have outlined some tips you can use to improve your choice of stocks.
Below are some of the tips that you may find useful in your investing journey.
1. Understand the macro environment
Before you invest in any stock, analyze the macro-environment: things like interest rates, fiscal policy, and even the period of the year. For instance, this is the holiday season, and since the pandemic, most shopping is now done online. This means stocks like Ocado, and Burberry are likely to experience a surge in sales short term.
Similarly, with the current labour shortages in the UK, automation is likely to grow at an accelerated rate going into the future. Quite naturally, this means stocks that deal with robotics and other aspects of automation such as Blue PRISM are set to benefit a big deal.
On top of that, in times of economic uncertainty such as now, defensive stocks that can withstand a market slump tend to do well. This is due to their low risk of correction relative to the rest of the market. For instance, a stock like BATS, which is a dividend-paying, and recession-proof stock could perform well in the medium-term.
2. Look out for market dips
Savvy investors know that the best way to make money in the stock markets is to buy low and sell high. The trick is to identify high-value stocks that are in a correction and catch them at key support levels.
For instance, Burberry is on an expansion path at the moment. The economy is opening up too, which means demand for luxury fashion items will go up going into 2022. Despite these fundamentals, Burberry has dipped over the last few months after it missed sales targets. It is currently trading at a multi-year support level, which makes it a perfect buy for investors looking for a bounce back.
3. Build up your portfolio over time
Stock market investing is a long-term game. As such, if you don’t have money to buy a huge chunk of the stock you want at once, you can always buy in bits until you hit your goal. This is called Dollar-Cost-Averaging. For instance, a stock like BATS is quite expensive at the moment, but through dollar-cost-average, you can hit your target.
With these tips, you are ready to start investing, right? Good! Let’s get started.
Is This A Good Time To Buy Stocks?
There is never a good or bad time to buy stocks. So long as a stock’s fundamentals are right, there is a good chance it will gain in value over time. For instance, while stock prices collapsed in 2008, anyone who had bought in 2007, but didn’t sell, is still in profit today. It is all about patience.
How To Buy The Best Shares Of January 2022
If you’re interested in buying one of the top shares listed on this page - we would suggest checking out eToro. This online broker gives you access to over 1,700+ shares (including the 5 picks listed on this page) - all of which can be purchased on a commission-free basis, You can buy shares from $50 (£40) per trade.
While eToro is super-popular in the UK, Australia, and much of Mainland Europe, the broker is also experiencing a surge of account sign-ups from the US.
Nevertheless, if you’ve never bought shares online before, here’s a quickfire breakdown of what you need to do.
Here what you need to do to buy shares from eToro:
Step 1: Register an Account
To buy shares online you will need to open an account with a trusted broker. If using eToro, the registration process takes minutes. You simply need to provide some personal information and upload a copy of your ID.
Step 2: Deposit Funds
You are going to be buying your chosen shares with real money - so you’ll need to deposit some funds into your eToro account. This comes at a minimum of $200 and you have several payment methods to choose from. If you want to buy shares instantly - you’re best to use a debit/credit card or an e-wallet like Paypal.
Step 3: Search for Shares
Once your eToro account has been funded you will then need to search for the company you wish to invest in. You’ll then need to click on the ‘Trade’ button to go straight to the investment page of your chosen stock.
Step 4: Place a Commission-Free Buy Order
Finally, you will need to place a buy order to complete the share purchase process. This is easy - as all you need to do at eToro is state the amount that you wish to invest.
It doesn’t matter if you are buying shares in a company like Amazon that has a stock price in the thousands of dollars - as eToro allows you to invest from just $50. This is known as ‘fractional investing’, as you will be buying a 'fraction' of a share.
Once you confirm the buy order, the shares will be added to your eToro portfolio. If the shares in question pay dividends, this will be reflected in your eToro account as and when they are paid. You can sell your shares at any time - as long as the markets are open.
If you want to invest in the stock market and consider the best shares to buy today, there’s no better place to do so than eToro. Simply click the link below to sign up today!
eToro – Buy The Best Shares With No Commission
eToro have proven themselves trustworthy within the industry over many years – we recommend you try them out.
Your capital is at risk. Other fees may apply
Best Shares to Buy Right Now: The Verdict?
As always, the best shares to buy discussed in this article are the views of the author. As such, it is imperative that you perform your own research prior to making an investment.
Nevertheless, there are plenty of profit-making opportunities available in the markets at present - even during the turbulent times that we currently live in. In particular, with many companies still staring at a stock price that is lower than pre-pandemic levels, there are a lot of bargains to be had.
Warning: All trading carries risk. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. Past performance is no guarantee of future results.