This Year's Best (And Worst) Stock Picks

Feb 04, 2022 By Triston Martin

As of December 3, GameStop Corp. (GME) has a YTD total return of 815.0%, making it the best stock for 2021. StoneCo. Ltd. (STNE), a financial technology (fintech) company, has had the worst year so far, with a YTD total return of -81.8 percent. With that in mind, the Russell 1000's YTD return was 20.5 percent.

Many factors have influenced this year's top stocks. Stocks like GameStop, which had been severely shorted, rose sharply earlier this year on the back of the "meme stock" mania. Other top-five equities have seen a boost from AI and COVID-19 vaccines while rising oil prices have boosted the shares of the final two top five companies.

Two payment processors saw a significant reduction in business during the epidemic, two that had recently gone public and failed to fulfill expectations, and one that suffered when the pandemic conditions that had driven its stock up began to diminish. The five of them all had unsatisfactory financial outcomes.

1. GameStop Corp. (GME)

  • Year-to-Date Return on Investment: 815.0%
  • A consumer discretionary2 sector
  • The company has a market capitalization of $13.2 billion.

In addition to video games, GameStop also sells movies, music, and books. This retail chain operates under GameStop, EB Games, and Micromania in the United States, Canada, Australia, and Europe. It sells anything from video gaming consoles and peripherals to software and memorabilia. At $1.2 billion in net sales for the three months ending July 31, 2021, GameStop recorded a Q2 FY 2021 loss of $61.6 million. Sales were up 25.6 percent from last year when the company lost $111.3 million in the period.

As Reddit members on the r/wallstreetbets subreddit forum pushed retail traders to launch a short squeeze on the stock, GameStop's stock soared early in the year. When a highly shorted stock price unexpectedly rises, short-sellers are forced to cut their losses and close out their positions by buying the shares, which drives up the price. AMC Entertainment Holdings Inc. (AMC) and Blackberry Ltd. (BB) were two additional heavily-shorted stocks that gained substantially as a result of the so-called "meme stock" phenomena. Even though GameStop's stock has fallen from earlier this year's highs, it is still the best-performing stock of the year.

2. The year-to-date performance of Upstart Holdings Inc. (UPST)

  • Percentage: 321.1%
  • Sector: Banking and Finance
  • It has a valuation of $14.1 billion1

Using artificial intelligence, Upstart Holdings is a lending platform that assesses borrowers' creditworthiness. Upstart employs machine learning to look at more variables than typical credit risk assessments, which it argues will allow banks to lend to more borrowers with less risk because of the greater accuracy of this method. Upstart. 5 In the third quarter of the fiscal year 2021, Upstart reported a net income of $29.1 million on $228.5 million. Net income rose by 201 percent, while revenue jumped by 249.5 percent for the year (YOY).

First traded on the Nasdaq in December 2020, Upstart's stock has soared since its first public offering (IPO).

The company's strong fundamentals, including profitability and rapid growth, are a significant contributor to the steep rise in shares. However, the company's business model is based on AI, which has become one of the most popular investment concepts in recent years.

3. Moderna, Inc., A Software Development Firm (mRNA)

  • 193.6 percent year-to-date return
  • Healthcare8 is the industry
  • Market capitalization: $12.4 billion1

Moderna specializes in developing messenger RNA (mRNA) treatments and vaccines for a clinical-stage biotechnology business. mRNA therapies are being developed for various conditions, including infectious diseases, cancer immuno-oncology, and unusual diseases. Moderna reported a net income of $3.3 billion on revenue of $5.0 billion in Q3 FY 2021, which concluded on September 30, 2021, based on 23 active initiatives, 15 of which have entered clinical studies9. With a net profit of $70 million, the company outperformed its loss of $233 million in the previous year. The company's revenue increased 32 times year-over-year.

Over the past year, Moderna's sales and shares have risen due to the success of its COVID-19 vaccine. Vaccines are allowed to be used in an emergency in the United States. 2020, Food and Drug Administration (FDA). Pfizer Inc. and BioNTech SE got EUA clearance for a COVID-19 vaccine they jointly developed earlier in the month.1112 Sales of that vaccine, the business's first to receive FDA approval, sparked a first-quarter profit for the company in 2021.

4. Company: Devon Energy, Inc. (DVN)

  • A total return of 175.3 percent thus far in the year
  • Affiliation: Energy
  • a market capitalization of $28.3bn1

Exploration and production (E&'''P) of oil and natural gas is what Devon Energy is all about. For the three months that ended on September 30 of FY 2021, Devon Energy had a net profit of $839 million on revenue of $3.5 billion, all of which were derived from the company's operations in the United States. With revenue up 224.8 percent year-over-year, net earnings improved dramatically from last year's net loss of $91 million.

Investor confidence in the energy sector has boosted Devon Energy's increasing stock this year, as oil prices have risen from their pandemic-depressed lows. As a result of rising oil prices, oil producers have seen increased revenues.

Many oil and gas businesses return profits to shareholders instead of investing in future expansion, which is a change from previous cycles. While cutting back on capital expenditures, Devon Energy has been rewarding shareholders with variable dividends, enticing investors who may not have previously invested in the energy sector.

5. Constellation Energy Inc. (CLR)

  • Return for the First Half of the Year: 167.1%
  • 16 Energy is a sector.
  • Its market value is $15.7 billion.

North Dakota and Montana's Bakken oil field region is the largest leaseholder and one of the largest oil producers for Continental Resources, an oil and gas E&'''P business. The revenue increase of 93.7% YOY was a remarkable improvement over the year-ago quarter's net loss of $79.4 million.

Oil prices have risen to levels not seen since 2014, as the global economy recovers from the pandemic shock and supply constraints abound, and Continental Resources, like Devon Energy, is reaping the benefits. Not every oil company has reaped the same rewards. Due to hedging arrangements, some have lost out on the price rises since they hope to avoid another price fall. Oil prices surged rapidly for Continental Resources, which was essentially unhedged, and took advantage of it.

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