Top Performing Stocks of 2022

We are two and a half months into 2022 and already it has proven to be a memorable yar for the stock market.

Even before the war in Ukraine, the markets had become very volatile with sharp intraday swings. This only got worse after Russia invaded Ukraine.

Traders and investors alike have found it challenge to navigate the market. It's only some value investors who have managed to buy some stocks for the long term in the recent correction. The rest have been wondering what their next move should be.

But did you know, that in the middle of all this volatility, there have been stocks that have delivered multibagger returns?

Yes, that's right. Since the first of January, some well-known Nifty stocks have gone up when the Nifty itself is down about 4%.

Which are these outperforming stocks? In this article we will look at some of them.

# Hindalco

Metal stocks have been on fire since 2021 and Hindalco has certainly carried on the momentum this year too.

The stock is up about 20% in 2022. In fact, it was up 30% before the recent correction.

The bull market in metal prices has certainly helped the stock. Hindalco benefits from rising aluminium prices. And the metal has had a great run on the commodity markets.

In the December 2021 quarter the sales of the company was up 43% over the same quarter last year. This was on the back of high aluminium prices as well as robust volume growth. The net profit for the period was up a staggering 81%.

# Coal India

Who would have thought Coal India would be among the best performers of the year?

And yet with a gain of 14% it finds a place on this list.

We must point out here that the stock wouldn't have made it to this list if it wasn't for the war in Ukraine. All the gains for the year have come since the start of hostilities on 24 February. And the reason for that jump is simple.

Russia is major coal producer. It's now under western sanctions. There is a real threat of coal supplies being disrupted.

There's another reason driving the price higher. Countries around the world are re-thinking the speed at which they want to move away from fossil fuels.

The world is facing a big energy crunch as it re-opens after covid. Supply is not keeping up with demand. And as a result, coal prices have soared.

Coal India, as one of the world's biggest producers of coal, is a big beneficiary.

As far as financial results are concerned, in the December quarter, the company's sales were up 20% over last year. The net profit was up 48%.

# ONGC

The stock of ONGC is up about 14% this year. It was up about 30% in 2022 before the recent correction

The company is a beneficiary of rising crude oil prices. In the December 2021 quarter, the company's sales were up 45% year on year (YoY) on the back of higher oil prices.

The higher sales did not result in additional costs for the company. Thus the net profit tripled in the previous quarter. The longer crude oil prices remains high, the better it will be for ONGC.

However, investors should not read too much into the rise in the stock for the short term. The run up has been driven by the rise in crude prices. A fall in the commodity could trigger a correction in the stock as we have seen recently.

# Cipla

The stock of Cipla is up about 13% this year.

The pharma firm has not delivered spectacular results to justify the becoming an outperformer. In the December quarter, sales were up 6% over last year and the net profit was flat.

The rally is being driven by other reasons.

The company has received approval to conduct local trials for a covid pill Paxlovid. This could be big source of business for the company.

The other reason is the company's steady shift to the respiratory business, which can potentially deliver more profits over time.

Do recent trends matter?

Well, that depends on whether you're a trader or an investor.

Traders will find it useful to know which stocks are defying the trend in the market. They might look to trade these stocks in the F&O segment after careful analysis.

However, investors should not be too concerned about shout term price movements. It always feels good when the stock you have bought does well when the market declines. But to a long-term investor, it's the fundamentals that should matter.

Also, while considering any investment, doing due diligence goes without saying. The recent performance of the stock can only offer limited comfort when making a buying decision.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...