These stocks generated the best returns in 2022.
The S&P 500 finished its worst year since 2008 on a low note, falling 5.9% in December and ending 2022 down 19.4%. Investors remain concerned about persistently high inflation, aggressive Federal Reserve interest rate hikes and an uncertain global economic outlook. Despite those challenges, a handful of top-performing stocks have bucked the bearish trend. Top performers include several oil and gas stocks that benefited from surging energy prices and tanker stocks that help store and transport petroleum products. Here are the 10 best-performing stocks of 2022 among companies that trade on major U.S. exchanges and have market capitalizations of at least $1 billion. Returns are through Dec. 31.
10. Rhythm Pharmaceuticals Inc. (ticker: RYTM)
Rhythm Pharmaceuticals is a pharmaceutical company focused on developing drugs for treating rare genetic metabolic disorders. The company’s lead drug is Imcivree, which is approved by the U.S. Food and Drug Administration for treating Bardet-Biedl syndrome, or BBS. In June, the FDA expanded Imcivree’s label to help BBS patients with weight management. In November, the U.K.’s Medicines and Healthcare Products Regulatory Agency authorized a similar label expansion for Imcivree. Rhythm said more than 80 physicians wrote more than 120 prescriptions for Imcivree between the FDA expansion announcement and the end of September. Rhythm Pharmaceuticals shares ended the year up 191.8%.
9. Vista Energy SAB de CV (VIST)
Vista Energy is an oil and gas exploration and production company that operates in Mexico and Venezuela. In October, Vista reported 26% year-over-year total production growth in the third quarter, including 35% oil production growth. Shale production was up 51% from a year ago, and total revenue was up 91%. Higher energy prices helped Vista grow adjusted net income by 325% year over year. Vista has also improved its balance sheet, reducing its net leverage ratio from 1.1 times adjusted earnings before interest, taxes, depreciation and amortization a year ago to just 0.5 today. Vista shares went up by 193.8% in 2022.
8. PBF Energy Inc. (PBF)
PBF Energy is an independent refiner that produces gasoline, diesel and other refined petroleum products. PBF has taken advantage of the favorable energy environment by significantly improving its balance sheet in recent quarters, reducing consolidated debt by more than $2.6 billion in the 18 months preceding its third-quarter report. Diesel prices rose by more than 25% in 2022, while gasoline prices fell by more than 5% from a year ago, following a surge in the first half of the year. In October, PBF reported 77.6% revenue growth in the third quarter. Investors can expect PBF to continue to improve its balance sheet, and the company even recently reinstated its 20-cent quarterly dividend that had been suspended since March 2020. PBF Energy shares rose by 214.4% in 2022.
7. TransMedics Group Inc. (TMDX)
TransMedics is a health care company that specializes in organ transplantation. The company has developed the only organ transplant system that is approved by the FDA to transport multiple organs, keeping them viable in transit. TransMedics’ revenue jumped 378% year over year in the third quarter, driven by commercial sales of its heart and liver transport systems. TransMedics guided for full-year revenue growth of at least 164%, and its impressive 71% gross margins suggest the $1.9 billion company could be a cash cow for investors as it grows. TransMedics could also potentially be an attractive acquisition target for a larger health care company. TMDX stock went up 222.1% in 2022.
6. Madrigal Pharmaceuticals Inc. (MDGL)
Madrigal Pharmaceuticals is a biotechnology company focused on developing therapies to treat patients with metabolic and fatty liver diseases. The stock skyrocketed nearly 268% on Dec. 19, when Madrigal reported surprisingly good trial results for its drug candidate resmetirom in treating nonalcoholic steatohepatitis, or NASH, and liver fibrosis. NASH is an advanced form of nonalcoholic fatty liver disease, a condition that affects about 30% of Americans and 20% of the global population, so the potential market for resmetirom could be massive. With a market cap of just $5 billion, Madrigal may be an extremely attractive buyout target for a large pharmaceutical company in 2023. Madrigal shares rose 242.5% in 2022.
5. Tidewater Inc. (TDW)
Tidewater is an oil and gas services company that specializes in offshore energy support and transportation. Like other oil and gas stocks, Tidewater has benefited from elevated energy prices, especially since the Ukraine invasion began. In November, Tidewater reported 73.4% revenue growth through the first three quarters of 2022. Net losses also dropped to $32.4 million during that period, down from $91.6 million a year ago. Tidewater said its vessel level cash margin increased from 38.2% in the second quarter to 40.6% in the third quarter, and its average day rate increased $1,100 in the quarter to near record levels for the North Sea. Tidewater shares rose 244.1% last year.
4. Torm PLC (TRMD)
Torm is a U.K.-based refined oil shipping company with a fully owned fleet of more than 80 vessels. In November, Torm reported its best quarterly results in the company’s history. The company said its robust cash generation enabled the company to pay out a record $119 million, or $1.46 per share, in dividends in December. Third-quarter revenue nearly tripled from a year ago, and Torm swung from a net loss of $14.7 million in the third quarter of 2021 to a net profit of $217.1 million in the third quarter of 2022. Surging shipping rates sent Torm shares higher by 266.5% in 2022.
3. Verona Pharma PLC (VRNA)
Verona Pharma is a pharmaceutical company developing treatments for respiratory diseases. The stock jumped 44.3% on Aug. 9 after Verona reported extremely positive data from a late-stage study of its chronic obstructive pulmonary disease, or COPD, drug candidate ensifentrine. Another round of positive data on ensifentrine in December sent Verona shares to new multiyear highs. Even in a difficult environment, the company says it has access to $400 million, enough funding to get it through at least the end of 2025 and support a U.S. commercial launch of ensifentrine. Verona shares rose 288.8% in 2022.
2. Scorpio Tankers Inc. (STNG)
Scorpio Tankers operates a fleet of ocean tankers that transports refined petroleum products worldwide. Tanker rates surged when Russia invaded Ukraine, and Scorpio has taken advantage of a favorable environment by reducing its debt by $970 million in the first three quarters of 2022. The company has also increased its unrestricted cash balance from $228 million in February to $490 million in October. Vessel revenue was up more than 300% year over year to $490 million in the third quarter. Booming refined product demand, low inventories and strong refining margins will continue to support tanker rates. Scorpio shares rose 319.8% in 2022.
1. Target Hospitality Corp. (TH)
Target Hospitality was a somewhat unconventional play on the 2022 oil and gas boom. The company provides workforce lodging and other temporary housing used for oil and gas drilling, mining, large-scale events, government agencies and disaster relief. The stock has had bullish momentum all year, but the majority of its gains have come since the beginning of July. On July 8, the stock jumped 25.8% after Target raised its 2022 revenue guidance by 53%, following the announcement of a new government contract. It finished the year up 325.3% overall in 2022.
2022’s 10 best-performing stocks:
1. Target Hospitality Corp. (TH): +325.3%
2. Scorpio Tankers Inc. (STNG): +319.8%
3. Verona Pharma PLC (VRNA): +288.8%
4. Torm PLC (TRMD): +266.5%
5. Tidewater Inc. (TDW): +244.1%
6. Madrigal Pharmaceuticals Inc. (MDGL): +242.5%
7. TransMedics Group Inc. (TMDX): +222.1%
8. PBF Energy Inc. (PBF): +214.4%
9. Vista Energy SAB de CV (VIST): +193.8%
10. Rhythm Pharmaceuticals Inc. (RYTM): +191.8%
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2022’s 10 Best-Performing Stocks originally appeared on usnews.com
Update 01/03/23: This story was previously published at an earlier date and has been updated with new information.
