7 Top-Quality Stocks to Buy Before 2022

top-quality stocks - 7 Top-Quality Stocks to Buy Before 2022

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In a world where supply chain disruptions, energy shortages and new Covid-19 variants are making the headlines daily, top-quality stocks are a very calming influence.

That’s why now is the perfect time to share some of the best stocks I have come across in my Portfolio Grader. These stocks top the lists when it comes to quantitative, fundamental and total ratings.

The quantitative aspect looks at how well the stocks are faring in the current market. It shows it there’s not only interest, but broad interest. That means volumes of purchases are rising and the speed of those purchases is increasing.

The fundamental rating is about looking at the management as well as the business prospects of the companies. Quality management in an expanding sector are good signs.

The overall rating is all about combining the quantitative score with the fundamental score. Triple-A ratings are tough to come by, but in this kind of market, they’re crucial to own.

  • Atkore (NYSE:ATKR)
  • Choice Hotels (NYSE:CHH)
  • Newmark Group (NASDAQ:NMRK)
  • Encore Wire (NASDAQ:WIRE)
  • Moelis & Co (NYSE:MC)
  • Headhunter Group (NASDAQ:HHR)
  • Donnelly Financial Solutions (NYSE:DFIN)

Top-Quality Stocks: Atkore (ATKR)

An array of electrical conduits are lined up in a row across the ceiling of a room.

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Conduit. That might not boost your heartrate, but it’s the core of every house and building. Without conduit you don’t run wires (at least to code) or build systems that keep the structure functional to its occupants. Also, not only are smart buildings as well as server farms, etc., a big deal, but also other “smart” roadways and other systems.

ATKR has been building and innovating in the sector since 1959. And its story over the decades has seen it bought by a giant conglomerate that added a number of strategic divisions, then sold off to a private equity firm. Ultimately, within the past decade, the company is independent again.

It’s perfect timing, since the infrastructure market is beginning to boom once more. And now ATKR is a major domestic player in the space. It also has some important holdings in Europe where they also have a big infrastructure stimulus spending bill in place.

This top-quality stock is up 151% year-to-date, yet it’s trading at a current price-to-earnings ratio just below 9x. That’s pretty exciting.

This stock is triple A-rated in my Portfolio Grader.

Choice Hotels (CHH)

A magnifying glass zooms in on the Choice Hotels (CHH) website.

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When you’re on your short or long road trips, it’s likely you’ve seen road signs for any number of CHH properties. There are more than 7,000 of them in more than 70 countries.

And given the fact that the company has been around since 1939, the brands such as Quality Inn, Econo Lodge, Clarion and Comfort Inn are U.S. mainstays. They’re also big in other parts of the world as well.

And the entire operation is set up on a franchise structure, so the parent company isn’t using all its capital for expanding its operations. That’s good in the current environment where travel optimism is rising and falling almost weekly.

CHH is a second-tier brand by size, but top-quality stock right now. It has gained 37% YTD and has better days ahead.

This stock is triple A-rated in my Portfolio Grader.

Top-Quality Stocks: Newmark Group (NMRK)

a stack of coins and red arrow pointing up to a house figure to represent crowdfunding real estate

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You may have heard that former President Donald Trump recently sold his hotel in Washington, D.C. The Washington Post reported that the Trump organization hired NMRK to broker the deal.

Since its beginnings in the teeth of the Great Depression, NMRK has been an active participant in the commercial real estate markets in the U.S., Europe, Latin America and other parts of the world.

With a market cap of $3.5 billion, it’s not big company. But being a well-regarded niche player in commercial real estate for almost 100 years is reassuring. That means you are a go-to player for smart money when you need to get the deal done.

The stock has gained 133% YTD yet trades at a current P/E below 6x. It’s a bargain as all this easy money will start pouring into real assets in coming quarters.

This stock is triple A-rated in my Portfolio Grader.

Encore Wire (WIRE)

A concept image of electricity flowing between two disconnected electric cables.

Source: ESB Professional / Shutterstock.com

It shouldn’t come as a surprise that WIRE has made this list, given it builds one of the key components that runs inside ATKR’s conduit — copper wires. It also provides photovoltaic cable as well, which is getting more and more attention.

But the overarching point is, these are meat-and-potato companies that many investors overlook on their quest for sexy headline grabbing stocks in flashy industries. But the reality is, companies like WIRE are quietly racking up the gains and incredibly attractive valuations.

If investors are truly looking for top-quality stocks, then it should be immaterial how appealing they are. What’s attractive about an investment is how well it performs and how well you can sleep at night while you own it.

WIRE stock is up 140% YTD, yet has a current P/E sitting just below 6x.

This stock is triple A-rated in my Portfolio Grader.

Top-Quality Stocks: Moelis & Co (MC)

cash and a pen lay atop a paper with graphs and tables

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This global investment bank is another interesting niche player. It has 20 offices around the world that focus on helping its corporation and governmental clients with restructuring and recapitalizations, mergers and acquisitions, as well as privatizations and other structural and strategic efforts.

MC has been the middleman on a number of significant deals since its inception in 2007 and continues to be key strategic player in some of the biggest deals that go down year after year. And this kind of activity is likely to speed up in coming quarters as rising rates will see big companies look for new ways to derive value for shareholders.

MC stock has gained 35% YTD. It also has a 3.8% dividend and current P/E of just below 11x.

Headhunter Group (HHR)

a picture of someone holding a resume in their hand

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One of the most enduring headlines we’ve seen is the challenge of keeping a well-stocked labor force. While unemployment claims remain low, at the same time many industries are struggling to find or attract workers.

This challenge isn’t limited to the U.S. HHR is tackling the employment challenges in Russia as well as its confederation of states as well as some of the Baltic nations. It’s a unique company that has been able to expand its footprint quickly and built a strong competitive moat.

The stock has been on the move for a while now, and it has risen 84% YTD. It’s a bit expensive, but given its footprint, it will continue to grow earnings and become an even better value.

This stock is triple A-rated in my Portfolio Grader.

Top-Quality Stocks: Donnelley Financial Solutions (DFIN)

A photo of a hand holding a magnifying glass and looking at a paper.

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There’s a lot of paperwork that goes into any kind of financial transaction. And much of it is tied up in boilerplate compliance and legal documents required of all the participants.

It makes sense. DFIN is a spinoff of one of the largest publishing and printing companies in the world. By developing this financial unit, DFIN can offer unique services in a sector that will continue to evolve but never disappear. Also, DFIN has a knowledge base unique to the sectors it serves, which adds value to the organization.

DFIN has just a $1.6 billion market cap, and that’s after running up 168% YTD. It’s a growth stock in a growth industry, especially as this niche goes digital. And after that run, this top-quality stock has current P/E of just 20x.

This stock is triple A-rated in my Portfolio Grader.

On the date of publication, Louis Navellier has positions in ATKR, CHH, NMRK and WIRE in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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