Like 2020, 2021 was a very odd year. Much of the news around the pandemic took centre stage, as we progressed from getting a vaccine out to coping with all the variants that followed. We even had to cope with the low-flying loonie. On a more subtle front, there were also several underdog stocks outside of the COVID sphere of impact that used 2021 to improve their business operations greatly. It’s those stocks that I’m going to watch closely in 2022.
Stock #1: Bombardier
Prior to 2021, Bombardier (TSX: BBD.B) was a beaten-up stock moving awfully close to the edge. In recent years, the company was forced to offload nearly its entire portfolio, including its lucrative rail business.
With most of those segments gone, and, more importantly, the revenue they generated, there were genuine concerns around Bombardier and its sole remaining segment. That segment, business jets, turned out to be a bit of a gold mine.
In the past year, Bombardier has revamped its business jet line, releasing several eye-catching products. This includes both the larger and record-breaking Global 7500 as well as the smaller Challenger series jets.
Both jets have growing order books, which should help the more focused Bombardier achieve some serious growth over the longer term.
Stock #2: Bausch Health
I would be remiss if I didn’t mention Bausch Health (TSX: BHC)(NYSE: BHC) in some form. Following a disastrous collapse several years ago stemming from a failed business model, Bausch is finally turning things around.
The pharmaceutical behemoth continues to refine its core business, bring new drugs to market, and pay down its mountain of debt.
To put that comeback into perspective, Bausch paid down over US$1 billion of that debt in just the most recent quarter. Adding to that appeal is a bevy of new IPOs expected to drop for some of its signature product names, including its namesake.
This will be a stock to watch closely in 2022.
Stock #3: Cameco
Cameco (TSX: CCO)(NYSE: CCJ) is one of the largest uranium miners on the planet. That uranium is, in turn, used for fuel in nuclear reactors around the world. Long-term purchase agreements that span a decade or longer provide a recurring stream of revenue for the company.
Following the Fukushima disaster in 2011, demand for nuclear power and, by extension, Cameco dropped sharply. This led to a multi-year lag in prices, whereby Cameco was forced to shutter facilities, bring down costs, and slash its dividend.
Demand, thankfully, started to pick up this year. Part of that recovery stemmed from a growing interest in nuclear power as a cleaner energy source. A surge in demand in markets such as China, Russia, and U.A.E helped the market as well.
As a result, the stock is up over 60% year to date, but still far off from its pre-Fukushima levels. Like the other stocks on this list, investors should watch closely in 2022 for that recovery to continue.
Final thoughts
All three of the stocks mentioned above boast some serious growth opportunities. This makes them all candidates to watch closely in 2022.
As intriguing as the stocks are, prospective investors need to remember that no stock is without risk. While these stocks have improved greatly in 2021, one or more of them may be too risky for some investors, particularly those with shorter investment timelines. For those investors, there are other options to consider.
If you can handle the risk, the stocks could provide some superb long-term growth.
