CNBC’s Jim Cramer on Monday provided his 2022 outlook for the ten worst-performing shares within the S&P 500 final yr, when the broad fairness index superior almost 27%.
The “Mad Cash” host additionally shared his expectations for the S&P 500’s largest winners on Monday’s present.
“The worst performers within the S&P final yr appear like they’ll hold underperforming in 2022 except we get some main sea-changes and I simply do not see that taking place” within the close to or medium time period, Cramer mentioned.
1. Penn Nationwide Gaming
Cramer mentioned he believes Penn National Gaming, which saw its stock fall 40% last year, will be challenging to own until a trio of major headwinds dissipates. In Cramer’s opinion, Penn National shares will be able to perform better once there’s more consolidation in the industry, more states legalize sports betting and the Covid pandemic fully recedes.
2. Global Payments
While Cramer said Global Payments had been a “perennial winner,” the financial technology company’s stock struggled in 2021, falling 37%.
“I’ve always admired Global Payments, as well as the card issuers and the small business empowerment plays and the buy-now-pay-later outfits, but there are just too many darned stocks in the group,” Cramer said. “They’re all too expensive, especially compared to the super-cheap bank stocks that should get a huge profitability boost as the Fed raises rates.”
3. Las Vegas Sands
Las Vegas Sands shares lost nearly 37% last year, and Cramer said it’s still a tough environment to own a casino operator with a large presence in the gaming hub of Macao.
4. Activision Blizzard
SOPA Images | LightRocket | Getty Images
Activision Blizzard’s 28% decline in 2021 could be for a number of reasons, Cramer said, including investors expecting the video game company to struggle as the economy reopened from Covid closures and title release delays. Cramer said another reason is newspaper reports that have been critical of CEO Bobby Kotick. However, the company has pushed back against the validity of the reporting.
Cramer said he thinks Activision Blizzard may actually rise if Kotick leaves the company “because it’s a hit-driven business that’s not generating the kind of hits people have come to expect, perhaps because they don’t want to work for Bobby anymore.”
5. MarketAxess Holdings
While MarketAxess Holdings had a first-mover advantage around the digitization of bond trading, Cramer said that’s no longer the case as the field has filled up with the competition. “I don’t see how MarketAxess can come back without a massive spike in bond trading, and I think that’s already in the rearview mirror,” Cramer said.
Cramer isn’t optimistic about Viatris, a generic drug play created in late 2020 when Pfizer spun off its Upjohn division which then merged with Mylan. “The only thing really intriguing about Viatris is that it sells for four times earnings, but that’s usually a red flag and on-patent big pharma stocks are cheap, too,” Cramer said.
7. Citrix Systems
“I’m not sure what to do with this much-less proprietary software company that might be put up for sale at the urging of some powerful activist investors,” Cramer said. “If they walk away, I have no idea what Citrix is worth, other than the fact that it was down 27% last year and it once traded much higher. These guys used to be the king of business collaboration software … but now it’s become a very crowded industry.”
8. Wynn Resorts
A pedestrian with an umbrella walks in front of the Wynn Palace casino resort, operated by Wynn Resorts Ltd., in Macau, China, on Jan. 31, 2018.
Billy H.C. Kwok | Bloomberg | Getty Images
Cramer said his outlook on Wynn Resorts is similar to that of Las Vegas Sands. He is famous that whereas he owns Wynn Resorts in his charitable belief, his favorable view on the inventory has been mistaken so far. Cramer mentioned he thinks Wynn Resorts, which fell about 25% in 2021, may very well be “caught in a rut” till the Covid pandemic subsides.
9. IPG Photonics
IPG Photonics, which makes and sells fiber lasers, saw its stock fall 23% last year. However, Cramer said he believes IPG Photonics shares have the best chance of any on this list to rebound in 2022.
“It’s got real earnings, but it had a shortfall thanks to weakening Chinese sales that crushed the stock. I know that IPG Photonics is, therefore, in the doghouse. But it has very good prospects, which is why it still sells for 35 times earnings.”
10. Fidelity National
Fidelity National shares fell about 23% in 2021, which Cramer said largely due to the fact the company is involved in financial technology. “It’s done nothing wrong other than being in a cohort that’s despised and I don’t see any of that changing soon,” he said.
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