After crashing 30% or more, these growth stocks are now ‘no-brainer’ buys!

This Fool thinks 2022 has offered him an opportunity to buy some truly great growth stocks.

| More on:
Smiling young man sitting in cafe and checking messages, with his laptop in front of him.

Image source: Getty Images

Growth stocks have been unpopular with investors in 2022 and it’s not hard to see why. Galloping inflation, supply chain woes, a frustratingly persistent pandemic and the awful invasion of Ukraine have knocked sentiment in even the most profitable, high-quality companies with solid outlooks.

I think some of these heavy fallers already look like they might be ‘no-brainer’ buys for my portfolio.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Halma

FTSE 100 health & safety tech firm Halma (LSE: HLMA) continues to appeal. Having lost 31% in 2022 so far, it leaves the share near its 52-week low. For a company whose products and services are deemed “essential“, thanks to increasing environmental and health legislation, that smacks of an opportunity to me.

Back in March, the company said it expects to deliver “substantial revenue growth” when full-year results are announced in June. Adjusted pre-tax profit is also likely to be in line with analyst predictions.

Halma looks in great financial shape too. This should permit further acquisitions to help drive yet more growth, not to mention keep the run of 42 consecutive years of dividend growth going.

Of course, no investment case isn’t without a niggle or two. With Halma, it’s the valuation. A P/E of 34 is far from cheap (although it’s far better than it once was). Nevertheless, I’d be happy to start buying today.

Watches of Switzerland

Also on my list of potential ‘no-brainer’ buys is luxury timepiece seller Watches of Switzerland (LSE: WOSG). At the time of writing, WOSG’s valuation has tumbled 35% in 2022.

This isn’t completely illogical. After multi-bagging in value between 2020 and 2022, some profit-taking was always on the cards here. It might be argued that the dramatic rise in the cost of living and the subsequent hit to discretionary spending made selling a logical move.

Nevertheless, I reckon WOSG’s target group is unlikely to be feeling the pinch as much as others. What’s more, the company has already said trading has been “in line with expectations” in Q4. Another update is due tomorrow.

As such, I suspect more serious falls are unlikely, albeit not impossible. A forecast P/E of 18 already looks great value for a company whose share price should recover its positive momentum in time.

Polar Capital Technology Trust

The last stock for today is actually a fund rather than an individual company — Polar Capital Technology Trust (LSE: PCT).

Like the others mentioned, PCT’s value has crashed in the year to date. Personally, I see this fall as another chance to begin building a position in the FTSE 250 member that holds some of the biggest and best tech stocks in the world before sentiment changes for the better.

Naturally, no one knows when a recovery will kick in. Things could get even worse if interest rates rise at a faster clip than expected. However, the diversification offered by this investment trust helps mitigate this to some extent. A total of 104 company stocks are held in the portfolio.

Unless I think the likes of Microsoft, Apple and Alphabet are incapable of thriving again, I’m simply being given a chance to snap them up on sale. The only downside here is the inevitable management fees that come with investing in an actively managed fund.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Alphabet (A shares), Alphabet (C shares), Apple, Halma, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Social media and digital online concept, woman using smartphone
Investing Articles

Will Lloyds shares recover in 2022?

Lloyds shares have struggled this year and the looming recession won't help. But I'd still buy them today.

Read more »

Two hands holding champagne glasses toasting each other with Paris in the background
Investing Articles

Can the stock market make me rich even now?

Here are three ways I'm coping with the stock market's recent bout of weakness and aiming to build wealth in…

Read more »

Cogs turning against each other
Investing Articles

3 top investment trusts to buy right now

Investment trusts offer a wide range of options for investors. And in troubled times, they provide some safety through diversification…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Why hasn’t the FTSE 100 crashed in 2022?

The catastrophic events of 2022 have left investors around the globe fearing the worst for stock markets. And some have…

Read more »

Trader on video call from his home office
Investing Articles

2 inflation-resistant FTSE 100 stocks to buy today

Soaring inflation could dent my returns if I don't take care. Here are two top inflation-resistant FTSE 100 stocks I'd…

Read more »

Tabletop model of a bear sat on desk in front of monitors showing stock charts
Investing Articles

Why a bear market is an investor’s best friend

A bear market can certainly be scary. But any investor tempted to sell might benefit by looking at Warren Buffett's…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

The Rolls-Royce share price could be stuck below £1 for a while. Should I buy?

The Rolls-Royce share price has been trading at penny stock levels since April. Could the stock be a bargain at…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

I’m aiming to make £45,000 in passive income with UK shares and never work again!

Investing regularly in UK shares can generate a substantial passive income over the long run. Zaven Boyrazian demonstrates how.

Read more »