These Companies Will Be the Hottest Plays of 2022

Andy Snyder|November 29, 2021

The phone rang, and we almost hung up as soon as we answered.

“Hello, this is Senator so-and-so. I’m calling to let you know…”

Ah, geez…

We thought the elections were over. But the grainy voice on the other end of the line had some personality to it. It may not have been a recording.

We kept listening.

We’re glad we did. It was a real person. It was the senator.

They had good news on a stream restoration project we are working on. The senator lined up a quarter of a million dollars for it.

Hanging up wouldn’t have been good.

A lot of money was on the line… quite literally.

With it, we’re virtually assured that a nearly mile-long stretch of valuable but long-neglected and -abused stream will be restored to pristine condition.

It’ll be even better than if Ma Nature did it herself.

The story of who we celebrated the news with paints an interesting and ironic picture… especially for investors looking to invest in a few “restoration projects” of their own.

Over the next 18 months… Wall Street will be full of them.

An Icon Ready to Retire

Shortly after the senator called, we sat down for dinner with a few local business owners and bigwigs in the community. One of the folks with us that night was top brass at Harley Davidson (HOG). The thousand or so employees under him assemble the company’s iconic bikes.

He’s in charge of the joint.

He described the company’s own restoration efforts to us.

Harley’s not what it used to be. As so many headline writers have touted… millennials are killing the company. They don’t want its bikes.

They want motorcycles that are good in the city… that are green… and that are small and quiet.

Harley makes bikes for long country cruises… that spew fuel out the tailpipes… and are big and loud.

You can see the problem.

Anybody can.

That’s why the fella at dinner told us about the company’s latest lineup of bikes.

The iconic Sportster is gone. Roaming the nation from 1957 to 2021, it spanned America’s golden years.

It’s gone.

In its place are three-wheeled bikes, a new “adventure touring” lineup that takes aim at the company’s European competition and… oh my… the company behind the roaring Harley sound now makes an electric bike.

From roaring chrome pipes… to an extension cord hanging out the back.

Indeed, the company is working on a bit of a restoration project of its own.

Will it work?

Opportunity Abounds

It’s a good question these days. It’s one lots of investors are asking about lots of companies.

General Electric (GE), the blue chip of blue chips, just announced a breakup. Johnson & Johnson (JNJ) made a similar move. And surely any of us can name at least a few big-name companies that didn’t survive the last year.

But several companies that many once thought were dead have made it. And shareholders have profited handsomely.

Ford (F), for instance, just saw its share price rise to more than $20 for the first time in two decades. Our Venture Fortunes subscribers used the latest big push to lock in a gain of more than 500% on a monthlong option play.

And then there’s Campbell Soup Company (CPB). A decade ago, many thought it was a write-off. Its soup was hot with Granny… but lukewarm with those darn millennials.

They deemed it too corporate… and not healthy enough.

Today, though, that soup is a case study in many MBA programs. It’s a turnaround story that’s simple and easy to understand.

It takes us back to that idea at the very top. Restoration is easy… if you’ve got the money.

The One Critical Factor

Campbell switched to a zero-based budgeting philosophy.

The opposite of simply taking last year’s profits and multiplying them by some calculated growth figure, zero-based budgeting uses a much stricter method. In this system, income and expenses are zeroed out each month. Every dollar that comes in the door is tracked and, most importantly, has a job to do.

It’s the same idea all those get-out-of-debt gurus preach.

It works for businesses too.

In Campbell’s case, the company slashed expenses, refinanced its debt and worked to bring its worst-in-class margins to the top of the industry leaderboard.

Using this model, the company didn’t need to transform its product lineup. We still see row after row of its canned soup at the grocery store.

Instead of throwing darts at a board, hoping an idea would stick or it would find an “in” with a new demographic, the company used old-fashioned math to get the job done.

Again, it takes money to bring about restoration. As Harley is finding out, it also takes money (lots of it) to debut new products and retool the factories that make them… a high-risk endeavor.

Turnaround companies can be great investments. In fact, we think they’ll be some of the hottest plays of 2022 (more on why soon).

Some companies won’t make the turn. They’ll fail.

Others will earn their shareholders piles of money as they prove the skeptics wrong.

The difference between the two will always be clear. The company that can shore up its cash flow will shore up its business.

Forward-looking shareholders will win.

Bottom line… it’s a good time to own the companies that don’t hang up when the money is calling.