Top 10 instruments in 2022. What will be their outlook in 2023?

The year 2022 brought a myriad of surprises and obstacles to the markets. We experienced high volatility, a sharp rise in the price of commodities such as oil or natural gas, as well as the rapid fall of the cryptocurrency exchange FTX. This year has been a year of record prices, and there is no end in sight to the decline in inflation. Rising interest rates have begun to slow slightly, but the coming global recession is imminent. [1] Investors today face the dilemma of where to invest their money so that it is not swallowed up by high inflation. Let's take a look at our selection of the best instruments for 2022. We'll also talk about their direction in 2023.

It is typical for growth stocks to have an upward bias during economic expansions when interest rates are low. These stocks have already experienced a significant rally and outperformed value stocks or the S&P 500 index as a whole in the period after the last financial crisis. However, it is different nowadays. The rise in key interest rates has triggered a big shift by investors away from growth stocks. So, where did investors start "pouring" their capital? The trend today is value stocks, which offer interesting buying opportunities for opportunistic long-term investors.

 

We have compiled our ranking in a variety of ways so that it also covers the commodity or currencies sector, we focused primarily on the performance for the year 2022, and it turned out like this:

Snímek obrazovky 2023-01-10 v 11.11.15

Let's take a closer look at the top three companies in the rankings:

 

1. Occidental Petroleum Corp. (OXY) 

 

Occidental Petroleum focuses on the extraction of oil and gas, commodity exploration, as well as the production of petrochemical products. For the third quarter of 2022, the company reported a profit of $2.5 billion on net sales of $9.4 billion. Net income and net sales increased 305% and 38% year-over-year, respectively.

Warren Buffett also owns a stake in OXY. According to the latest available data, his company Berkshire Hathaway owns 21.4% of OXY shares. Looking ahead, it is very important to note that Buffett's company received regulatory approval in August to buy up to 50% of this oil and gas producer. The value of the stock could reach between $75 and $100 per share in the next year from today's $62 per share. [2] During 2022, the share value of this title increased by approximately 121%.*

 

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Occidental Petroleum Corp (OXY)'s performance over the past 5 years. (Source: Investing)*

 

2. Marathon Petroleum Corp

 

Marathon Petroleum Corporation is an energy company engaged in the processing, sale and retail of crude oil in the United States. Adjusted earnings before interest, taxes, depreciation, and amortization for the third quarter of 2022 were excellent, up to $6.8 billion compared to $2.4 billion for the third quarter of 2021. In the company's favour is the fact that the market demand for their products is very strong, while they are improving their operations and business. Other positives were the completion of a $15 billion share buyback and the announcement of a quarterly dividend increase of approximately 30%. From the current US$111 per share, the value could rise to between US$134 and US$153 in the next period. [3]

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Marathon Petroleum Corp's performance over the past 5 years. (Source: Investing)*

 

3. ExxonMobil Corporation

 

One of the world's largest energy providers and chemical producers, also dedicated to developing next-generation technologies. The giant ExxonMobil can be happy with 2022. The last quarter was one of the best in its history thanks to high oil prices, rising production, and strong refining. A plus factor was the start of the African FLNG project, which could provide further growth in the near term. The outlook for energy prices over the next few years is very strong; we estimate an increase in the company's value to US$138 from the current price of US$105 per share. [4] However, this increase may be slowed down by worse results in the last quarter of the year. Over the past year, this title has gained 72%. [*]

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ExxonMobil's performance over the past 5 years. (Source: Investing)*

 

Conclusion

The winners for the year 2022 were clearly the shares of energy companies, which were "riding" on the high prices of oil and natural gas. So, the prediction for 2023 is clear, unless there are any unforeseen events and there is no severe global recession, this performance could continue. [5] An end to the conflict in Ukraine is not in sight, and commodity supply will remain limited.

 

Olívia Lacenová, analyst of Wonderinterest Trading Ltd.

 

All data current as of 21.12.2022

 

[*] Past performance is no guarantee of future results

 

[1,2,3,4,5] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.

 

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This text constitutes marketing communication. It is not any form of investment advice or investment research or an offer for any transactions in financial instrument. Its content does not take into consideration individual circumstances of the readers, their experience or financial situation. The past performance is not a guarantee or prediction of future results.

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