2 stocks multiplied to buy for the January effect – News Couple
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2 stocks multiplied to buy for the January effect


Don’t lose sight of the effect of the January effect

Do you know the term “January Effect”? Refers to the theory that stock prices rise seasonally during January. This can happen for a number of different reasons, including investors taking advantage of the lower prices that occur in December when tax harvesting is a factor. There is also the possibility that investors will use year-end bonuses to add shares in January. Whatever the case may be, it’s important to be aware of the potential rally to start 2022 thanks to the January effect.
While the current market environment may not look very attractive to investors with some liquidity on the sidelines to work, sentiment can change in the blink of an eye. Staying prepared with a solid stock watchlist and dry powder to post once the stock markets start to do better can really pay off as we head into a new trading year. There’s a good chance that some turbulent stocks from 2021 will rebound of some kind in January and beyond, as investors try to generate alpha from market areas that present interesting risks to reward profiles.
That’s why we’ve put together a brief overview of 3 affected stocks to buy for The January Effect. Let’s take a closer look below.

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Zoom Video Communications (NASDAQ: ZM)

Zoom Video was certainly one of the biggest winners during the pandemic, but the stock took a beating throughout 2021 as the world reopened and people started returning to classrooms and offices. While it is always difficult to call a definite bottom for a stock, one could argue that Zoom’s sell-off has been pared and that stocks may be due to a rebound in the coming months. The company provides a communications platform that connects people through video, voice, chat, and content sharing, and has been delivering impressive revenue growth over the past few quarters.
Most recently, Zoom Video posted third-quarter revenue growth of 35% year-over-year to $1.051 billion, with new customers accounting for 74% of revenue. Some analysts believe that the way people work has permanently changed after the pandemic, and that Zoom is the kind of company that should continue to thrive as more companies rely on hybrid office/remote working models. It’s also worth noting that Zoom spends heavily on research and development to bring new products to its existing customers, and the company is already profiting from sales of Zoom Phone and Zoom Rooms. Keep an eye on Zoom in upcoming sessions, as it’s a pesky company that might be in a good position to start the year.

Companies in the digital payments industry have seen their stock prices obliterate over the past few months, and Block Inc is a good example of that. The stock has simply not been able to find a bid recently, and the stock has reached extremely oversold levels. Much of this has to do with the overall outlook for the macroeconomic picture, as factors such as rising inflation and a slowing economy can negatively impact this business in the near term. However, the digital payments industry is not going anywhere and preparing for explosive growth over the next decade, especially when you consider how electronic payments will grow overseas. Big selloffs at companies like Block could end up with a great buying opportunity in the long run, although investors should be careful about adding too much exposure.
This technology company, officially known as Square, focuses on financial services products including Square, Cash App, Spiral, Tidal, and more. Square is a device that turns iPads into payment terminals and helps entrepreneurs manage their business finances in a more convenient way. Another popular offering from Block is the Cash App, which allows consumers to send, spend, store money on an app, and even buy and sell Bitcoin. While the shares of this innovative fintech company have been selling relentlessly, it is worth noting that the company recorded a 43% increase in total payment volume in the third quarter and saw a 27% increase in net revenue. It’s also an interesting “reopening play” as many Square merchants must benefit from the return of people to the public after the pandemic.



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