5 Best Shares To Buy Right Now in 2022 [Undervalued Stocks ASX]

Henry Fung

Henry is a co-founder of MF & Co. Asset Management with over 15 years of experience as a trader, investor and asset manager. Henry runs the Options Income Strategy and has a free 5-day options income strategy course you can take to learn how to use options to generate income.

April 28, 2022

Please note that any research that we publish does not take timing into consideration. We may publish research for a stock that we believe is of good quality but not necessarily trading at a discount or at a technical level for a high probability entry. If you would like to maximise your returns with optimised entry, exit and stop loss levels, check out our High Conviction Report.

Today, we’ll look at the best shares to buy right now that we think are undervalued stocks on the ASX in 2022.

Undervaluation can come from a few factors – these include competition strength, higher risk future valuations and most commonly, intrinsic value missed by investors.

Best Shares to Buy Right Now which are Undervalued Stocks on the ASX

These stocks are the best share to buy right now as they show strong potential but are considered to be undervalued stocks as they have not necessarily rallied along with the rest of the market.

Unlike dividend-paying blue-chip shares which tend to hold their value better, these stocks tend to be higher risk.

If you are looking for something with an even higher risk for a better potential return, we have a list of the 5 best penny stocks on the ASX.

Ioneer (ASX:INR)

Ioneer (ASX:INR)

Ioneer (ASX:INR) aims to be a world-class lithium producer supplying the burgeoning EV and battery market in the USA.

The company’s facility will be located in Nevada at the Rhyolite Ridge which holds the largest known lithium and boron deposit in North America.

Though ecological issues at the site have made news, the company is positive it can work with the relevant authorities to reach a solution.

The company has been a major beneficiary of the tailwind behind electrification due to climate awareness and record-high fuel prices, the Biden administration’s inclination towards decarbonization, and the DOE’s (Department of Energy) willingness to help fund projects that align with this policy.

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Read the full article on how Ioneer (ASX:INR) made our list of 5 best shares to buy right now.

Amcor (ASX:AMC)

Amcor (ASX AMC)

Amcor is a consumer goods packaging company with a client roster that includes some of the world’s largest names in consumer and healthcare.

The company has been a market favourite of late due to the tailwind of strong retail spending figures and the somewhat easier supply chains as pandemic restrictions abated.

Despite the operational challenges such as supply chain disruptions and rising raw material costs, the company has been able to stand its ground well in recent quarters.

With smaller rivals yet to get back on their feet after the pandemic, Amcor is now primed to capitalise on the return to normalisation.

Read the full article on how Amcor (ASX:AMC) made our ASX undervalued stocks list.

Fortescue Metals (ASX:FMG)

Fortescue Metals Group (ASX:FMG)

Fortescue Metals Group (ASX:FMG), led by Andrew Forrest, Australia’s richest man, is the world’s fourth-largest iron ore producer.

The company reported a record FY2021 as it took full advantage of high iron ore prices with a low-cost structure from its integrated operations, and the timely completion of a new mine.

Fortescue has underperformed the ASX 200 severely after July.

However, we see this as an opportunity to buy a quality stock at a low price with an incredible dividend of over 25%.

Even if Fortescue decide to halve the dividend, we are still looking at a yield of more than 12% which is far superior to what BHP and RIO can offer.

Read the full article on how Fortescue Metals (ASX:FMG) made our list of 5 best shares to buy right now.

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Johns Lyng Group (ASX:JLG)

Johns Lyng Group (ASX:JLG) is a construction and repair services company with a focus on contract insurance services and commercial real estate.

The company has benefited from Australia’s real estate boom and is a growing player in the strata (collective management of property by individual owners) services space.

The company’s business model puts it in a unique position in this market and its focus on post-catastrophe services is a rapidly growing field due to the effects of climate change.

The stock is nearly flat YTD due to the recent turmoil in global markets from inflation and the Russia-Ukraine war but is still a slight outperformer compared to the ASX200.

Read the full article on how Johns Lyng (ASX:JLG) made our ASX undervalued stocks list.

Core Lithium (ASX:CXO)

Core Lithium (ASX:CXO) is an Australian mining company aiming to become one of the biggest exporters of lithium to the Asian region.

The company has seen its stock skyrocket a monumental 887% over the past 12 months due to the ever-increasing price of lithium and substantial progress towards the commencement of production.

The company claims it will be one of the lowest-cost lithium spodumene producers in the world once its Finniss mine enters production.

The project is also highly capital-efficient, given that its production is based on the simple DMS process which uses just gravity and water.

This is two-thirds cheaper compared to the floatation process.

Moreover, the Finniss project is now fully funded.

The company will potentially enter production in 2H’FY22 and produce about 197,000 mtpa.

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Read the full article about Core Lithium (ASX:CXO) on how the stock made our ASX undervalued stocks list.

How We Pick The Best Shares To Buy Right Now

Stock markets are generally driven by three factors within the markets.

Understanding these forces helps us time the market and buy or sell stock at the most opportune moments.

In general, the markets and stocks are firstly driven on a short-term basis via supply and demand imbalances.

This is the order flow on a day to day basis as investors buy or sell a stock for different reasons.

This order flow is generally hard to forecast and requires strong technical analysis and understanding of the underlying market to properly time.

Secondly, markets and stocks are driven by macroeconomic forces in the medium-term.

Factors include but are not limited to changes in interest rates, consumer sentiment, government policies and so forth.

Understanding the nuances and how the different countries interact with each other in terms of trade and politics is key to understanding the forces that drive the markets as a whole.

Finally, stocks in the long-term are driven by fundamentals. Factors include but are not limited to quantitative factors such as earnings growth, profit margin and return on equity.

Qualitative factors include factors such as competition, operating environment, political and policy environment.

To be able to pick the best shares to buy now, it is essential to combine market timing, macroeconomic and fundamental analytics.

Keep in mind that we publish research on stocks that are not necessarily trading at a discount or at a preferable technical level. If you want to maximise your returns by optimising your entry price, exit price and stop loss level, check out our High Conviction Report.

Are you still looking for the best stocks to buy in 2022? We’ve put together a free report on 5 stocks that we think are the best buys on the ASX right now. Download it instantly here.

This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.

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