3 Hidden Gem Stock Picks in 2022

These days the most popular stocks to follow are either meme plays or the most blue-chip S&P 500 companies. Very few investors seem to be interested in hidden gem stock picks.

About halfway through September, the index is down almost 15% year-to-date. Of the 11 sectors in the index, only energy (up 44.8%) and utilities (up 7.5%) are up for the year. Of the 503 stocks in the index, 318 are down for the year.

One possibility for finding hidden gem stock picks to beat the September slump is to limit your search to the companies in the index that are winning in 2022.

Mueller Industries (MLI)

Mueller Industries (NYSE:MLI) is the largest of these three stocks, with a $3.6 billion market capitalization. If you invested $1,000 in the March 1991 initial public offering of the manufacturer of copper, brass, aluminum, and plastic products, today you would have $76,380, a compound annual growth rate of 15.0%.

Mueller reported its Q2 2022 results in July. On the top line, its sales were $1.15 billion, 13.6% higher than a year earlier. On the bottom line, it had a net income of $206.6 million, 89.9% higher than Q2 2021. The company benefited from higher prices across all of its businesses.

The company acknowledged in its quarterly report that sales from building construction would slow in the months and quarters ahead. However, it also said its businesses have healthy backlogs and are operating at capacity.

JBG Smith Properties (JBGS)

If you live in the Washington D.C. area, there’s a good chance you live or work in one of JBG Smith’s (NYSE:JBGS) properties. The company’s current portfolio is 15.5 million square feet of commercial, multi-family, and retail with another 9.8 million in development.

The company’s long-term plan is for 70% or more of its portfolio to be focused on the National Landing section of Washington D.C., which includes the neighborhoods of Crystal City, Pentagon City, and Potomac Yard.

As the company’s latest presentation highlights, National Landing is “positioned to be the nation’s premier live-work-play destination.” The area has more than $6 billion in infrastructure initiatives that are fully committed to being completed in the future.

Its annualized net operating income is expected to grow from $300 million to $425 million by Q4 2026. And that doesn’t consider the monetization of 8.6 million square feet currently in the pipeline.

Yielding 4% at current prices, its stock hasn’t been this cheap since October 2020.

WiMi Hologram Cloud (WIMI)

WiMi Hologram Cloud (NASDAQ:WIMI) is a leading holographic AR provider that has been at the forefront of holographic AR technology research for many years, with the goal of becoming the world’s leading holographic cloud platform. The company continues to focus on R&D investment, and after a long period of technology accumulation, it has a leading technology reserve in VR/AR, 5G, artificial intelligence, arithmetic algorithm, digital twin, virtual human and other fields based on its existing strengths.

According to a research report, China’s metaverse market size is expected to maintain its growth trend from 2022-2027, reaching $42.53 billion in 2022 and further reaching $126.35 billion in 2027, with a CAGR of 32.98% from 2022-2027.

WiMi is capturing the huge opportunity of the metaverse, a market size worth hundreds of billions of dollars, and the company’s revenue figures continue to trend upward. Thus, while the company’s revenues are growing, it still has a huge market to tap into.

Its stock is currently trading at a PS multiple of just 1.36x. The cheap valuation has attracted the interest of institutional investors, with analysts giving WiMi stock a Buy rating with a price target of $7.