This year started off with gusto as the market bet on a quick recovery from the COVID-19 pandemic.
But as we close the book on 2021, the market is struggling for a few reasons:
- The Federal Reserve’s plans to taper its bond-buying efforts and raise interest rates in 2022.
- Surging inflation.
- And President Joe Biden’s failed “Build Back Better” keystone legislation.
As a smart investor, you have to get past the headlines and have a system in place to boost your portfolio.
It’s one of the many reasons I believe in chief investment strategist Adam O’Dell’s Green Zone Ratings system. It’s at the core of our powerful (and free) resource: the Money & Markets Hotlist.
Each week, Adam and I parse through our proprietary database to put together a list of 10 stocks positioned for huge gains, according to Green Zone Ratings.
The hotlist is at the heart of my weekly stock highlights. I find that one hotlist stock that stands above the rest. (Check out the latest one here.)
Looking back over the past year, we’ve had solid winners. Let’s highlight two of the best.
My Top Hotlist Pick of 2021: Synaptics Inc.
When Synaptics Inc. (Nasdaq: SYNA) hit our hotlist back in February, I was beyond excited.
Synaptics started as a company developing human interface products for electronic devices like touchpads for laptops and touch displays for smartphones, tablets and automobiles. It even developed the fingerprint ID technology that some smartphones use.
But the company has transformed.
In 2020, Synaptics paid $250 million to buy Broadcom Inc.’s wireless Internet of Things (IoT) business. That business included Wi-Fi, Bluetooth and GPS technologies.
The acquisition paid off for Synaptics in the fourth quarter of 2020 — and it carried that momentum into 2021.
After I recommended it in February, the stock started its slow climb before taking off in November.
The reason for the big jump in November? Synaptics’ quarterly earnings.
In its quarterly statement, the SYNA reported its IoT revenue jumped 70% year-over-year with a record gross margin of 53.2%.
That means, despite the headwinds due to global semiconductor shortages, Synaptics grew its sales to record levels.
When I recommended SYNA in February, I said it would beat the broader market by three times over the next 12 months.
Eleven months later, SYNA is close to a 100% gain while the S&P 500 is only up around 25% — so the recommendation crushed the market by roughly four times!
Perfect Timing: GreenSky Inc.
While Synaptics was our biggest winner, it wasn’t the only one.
In September, an alternative lender popped up on our hotlist, and I dug into fintech and any trends I could find.
It turned into a big winner, netting a 40% gain in just three months!
GreenSky Inc. (Nasdaq: GSKY) developed proprietary technology that supports a full range of loan functions for merchants, consumers and banks.
Its technology allows banks and merchants to make loans to consumers for home improvement, solar installation, health care and more.
GreenSky partners with 14 banks, including Regions Financial Corp. (NYSE: RF) and SunTrust Banks Inc. Those banks make loans online or through GreenSky’s mobile app to customers of more than 12,000 merchants, including Home Depot Inc. (NYSE: HD).
But something big happened the day after I recommended GreenSky to you.
The next day, Goldman Sachs (NYSE: GS) announced a plan to acquire GreenSky for $2.24 billion in an all-stock deal.
At that price, GreenSky’s value was more than 50% higher than the closing price the day before. Investors who jumped into GSKY right after my recommendation enjoyed a decent pop.
Note: GreenSky shareholders approved the deal last week. It should conclude sometime in the first quarter of 2022.
Bottom line: When it comes to investing, it pays to have a strategy and stick with it. And the weekly Money & Markets hotlist is a great place to start.
If you read headlines and worried about the decline in semiconductor and fintech stocks, you might have missed out on a near 100% gain in Synaptics and a 40% winner in GreenSky.
These are just two of the big stock winners from the Money & Markets Hotlist that I highlighted this year. I can’t wait to share even more stocks with market-crushing potential in 2022.
Matt Clark, CMSA®
Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He is a certified Capital Markets & Securities Analyst with the Corporate Finance Institute and a contributor to Seeking Alpha. Prior to joining Money & Markets, he was a journalist and editor for 25 years, covering college sports, business and politics.