Investors should keep an eye on casino and real estate stocks next year, according to Gerber Kawasaki Wealth & Investment Management CEO Ross Gerber.
MGM (MGM), Lennar (LEN) and Tesla (TSLA) were selected as the top three stocks set to rise in 2022 in Gerber’s preview. He joined Yahoo Finance Live on Thursday to discuss which stocks are expected to perform best next year.
“MGM is one of our long-term actions and we’ve added weakness to it because of Omicron,” said Gerber. “And we absolutely believe that it’s the end of the game for Corona, this winter being again sort of one of the toughest winters. But as each winter progresses, it will become a lot more normal and a lot less disruptive. “
MGM Resorts International, a giant in the hospitality and entertainment industry, specializes in casinos, hotels and resorts. As the global outlook continues to improve and the economy adjusts to new realities around COVID, Gerber noted, the hospitality industry could benefit greatly.
The prospect of an interest rate hike in 2022 looms over the economic picture for next year and has dampened some analysts’ expectations for stock market growth. “The likelihood of a 10% correction in the near term or over the next 12 months is high,” Savita Subramanian, head of US equities and quantitative strategy at Bank of America (BAC), told Bloomberg.
Gerber, who expressed doubts the Fed’s three rate hikes would take place in 2022, was more optimistic.
“We actually don’t think the Fed will hit its three rate hikes next year, we’ll see,” he said. “But if that happens, it won’t be until the end of the year, and therefore housing is an imbalance of supply and demand on a massive scale. And home builders like Lennar, especially Lennar, who is a very large homebuilder established in several regions, are only benefiting from this huge demand. So for every house they build, the profits go up every month because the prices keep going up.
Lennar, a Florida-based homebuilding company, recently suffered from supply chain disruptions linked to the pandemic. However, industry experts expect many of these challenges in the housing market to be overcome next year. Research and Markets has indicated that the US construction sector is expected to grow 3.7% in 2022.
For most of the year, the housing market remained warm. Like other industries, such as electronics, housing has faced bottlenecks and labor shortages that have constrained supply in the face of growing demand. The Federal Housing Finance Agency said house prices rose 18.5% through the third quarter of 2021 compared to a year ago, culminating with the largest annual increase in the housing index. agency housing prices.
Tesla was Gerber’s last recommendation and his number one choice for investors in 2022. He had some bold predictions for the electric vehicle maker in his interview with Yahoo Finance Live.
“I believe that over the next decade Tesla will be the most important company in business history,” said Gerber. “I think 12 months from now we’re going to see some amazing breakthroughs in AI and tech. And what Elon has done again, we don’t know, you want to own stocks in that future. So with the robotics, AI and the dominance of electric and climatic space, Tesla is the best stock ever. ”
Tesla has certainly rewarded bullish investors in 2021. This year, Tesla stock has gained 56%, more than double the 27% rise of the S&P 500.
Even so, challenges remain. The company has recalled nearly half a million of its Model 3 and S models over safety concerns relating to backup cameras and car trunks. Industry experts have raised concerns about the sustainability of Tesla’s high market share in the electric vehicle market, as well as the possible emergence of competitors.
Gerber has warned investors not to worry too much about recalls. Recalls are relatively normal for automakers, and Tesla’s main strengths lie outside of their auto services anyway, he added.
“Tesla is a better AI tech company than a car maker, as we’ve all learned over the past 10 years,” he said. “They build cars, but they basically build an iPhone on wheels. And so all the infrastructure they’ve built around the service, for example, has been a big challenge for them. They’ve innovated amazing things like mobile service.
Overall, shares held steady on the last trading day of 2021, giving this year’s Santa Rallye a rather mixed end. The S&P 500 hit an intraday high on Thursday but fell in the afternoon. This year, the index hit a record every month, a feat achieved only once before, in 2014.
Follow Yahoo Finance on Twitter, Instagram, Youtube, Facebook, Flipboard, and LinkedIn