2022 has been one of the worst years for stocks in history. While stock indices have dropped by approximately 30%, many stocks suffered a 70% to 80% price drop. The bear market is brutal, but some companies managed to jump higher as if nothing’s happening.
1. ConocoPhillips (COP)
It’s no surprise ConocoPhillips rose this year, as it’s an oil and energy-oriented company. It was founded just twenty years ago and has already reached a $160 billion valuation. COP jumped by 82% last year and is currently up 71% so far this year. That’s not bad while tech giants like Meta lost 70% of their value.
ConocoPhillips chart, source: Finviz.com
The company seems to be fairly valued, as P/E is 8.92, P/B is 3.2, and P/S is 2.12. There is no significant overvaluation or excessive debt. The company even offers a 4.18% dividend for its shareholders.
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Conoco’s profits were declining for a few years in a row, but 2021 kickstarted a new wave, almost reaching $50 billion in revenue. The company’s revenue increased for several quarters, but profits have been declining since the start of 2022.
ConocoPhillips revenue and earnings, source: finance.yahoo.com
COP may continue to rise, but it would be a risky entry at the moment for several reasons. First, it had approximately a 500% run despite being not so volatile stock. Second, it is reliant on oil, which has already reached its peak several months ago. It may be more reasonable to wait for a better entry, but if higher oil prices persist, it could easily go above $150.
2. Cigna Corporation (CI)
Cigna Corporation is a healthcare organization with enormous revenues. It was founded in 1982, and it has had higher revenue for several years than its market cap. The company is very close to reaching a $100 billion valuation milestone soon. Despite its monstrous rise, there is no severe indication of overvaluation at the moment.
Cigna Corporation chart, source: Finviz.com
2021 was not such a good year for Cigna, but while most stocks crashed in 2022, this one is currently up 42%. Moreover, the corporation pays a 1.4% dividend to its stockholders. It has a little debt, but it’s not that bad. Ratios are fairly valued as follows: P/B at 2.16, P/E at 15.32, and P/S only 0.54.
The stock dropped by a whopping 87% in the last recession in 2008, so it’s surprising to see it rise with such momentum. Cigna’s revenue skyrocketed in 2019 by approximately 250% within just one year as you can see from the chart. And it keeps rising. Since 2022, the revenue has steadied, yet, has remained extremely high.
Cigna Corporation revenue and earnings, source: finance.yahoo.com
3. Eli Lilly and Company (LLY)
This company has been on a winning streak since 2009. Just like Cigna Corporation, it is a health care and drag manufacturing company, but with higher market capitalization. It’s currently valued at $345 billion and several red lights are flashing. LLY has been performing very well for 13 years, but it performed poorly between 2000 and 2008.
Eli Lilly and Company chart, source: Finviz.com
The same could occur soon as Eli Lilly got severely overvalued. The company pays a small dividend, as does Cigna, but it has much higher debt. Moreover, LLY’s ratios P/E 54.7, P/S 11.8, P/B 32.55, and P/C 125.82 are significantly high. In my opinion, it is definitely not a good buy opportunity at the moment or in the near future.
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The company’s revenue has been rising for the past few years at a healthy pace, but the stock has jumped much faster. Earnings were falling since 2020 and revenue is declining since the end of 2021. Kudos to those investors who held the stock throughout its whole ride, but it is poised to retrace sooner or later.
Eli Lilly and Company revenue and earnings, source: finance.yahoo.com
Bottom line
While ConocoPhillips and Cigna Corporation may still deliver some returns for their shareholders, Eli Lilly and Company is extremely overvalued. The point of this article was to show you there are still stocks that continue in an uptrend despite the economic meltdown. Don’t take it as investment advice.
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