Best Performing ASX200 stocks in 2022

There are more than 2,000 companies listed on the ASX, and while we would like to examine them all we just wouldn’t have the time. So, we spoke with the Wealth Within to get their take on how the ASX’s 10 biggest players have performed recently.

Here is what we learned about the 10 biggest ASX companies by market capitalisation:

1. Australian and New Zealand Banking Group Ltd (ANZ)

From around March 2021, ANZ’s share price was behaving erratically and this continued when the company began its on-market buyback in the second half of 2021. Interestingly around the time they announced half year results on May 4, they also announced the buyback had been completed. What we see is that investors, to their detriment, tend to focus on the published monthly or quarterly price movements which don’t provide a complete picture of the volatility of the ANZ share price.

Whilst ANZ shares fell by just 1.09% in April which is not overly volatile, the devil lies in the detail.  What has really happened with ANZ in recent times? From around March 2021 ANZ fell by around 10% before rising, and it did this six times to the low of $24.65 in March 2022. Is that normal? Given the degree of these falls, the market capitalisation of ANZ and the value of the buyback, it appears not. Perhaps institutional traders or someone with deep pockets were taking advantage of the buyback. Meanwhile investors were blissfully unaware of the short-term potential for the stock to fall. ANZ’s share price gapped down heavily on market open Monday May 19 and has continued to fall towards the March 2022 low.

2. BHP Group Ltd (BHP)

BHP had a good run to the high of $53.72 on April 19 as it attempted to break to a new all-time high, but this failed, and it subsequently reversed and fell. In April the stock was down 7.2% following a sharp drop in the price of iron ore, the sell-off in BHP occurred when the Chinese government decided to intensify COVID lockdowns and enforce a zero-tolerance policy.

Of the three big miners, BHP, FMG and RIO, it was BHP that fell the most in the sell-off. Its share price declined by around 17.9% into a low of $44.11 on May 10. This recent fall has increased short-term resistance against a further rise through the all-time high of $54.55 in July 2021. Should BHP’s price fall below $44.05 speculators may halt the fall as they attempt to grab a perceived bargain. BHP could rise from there as the medium to long term outlook for BHP remains positive, currently the short term risk indicates the possibility of a further fall.

3. Commonwealth Bank of Australia (CBA)

CBA’s share price is currently pulling back steadily, as the analysis indicated was likely to occur. Since June 2021, the stock has largely traded sideways, which comes as no surprise as the All Ordinaries Index has done pretty much the same. The market has been waiting for some time to confirm a change in RBA policy which occurred on May 3. Changes to the cash rate can temporarily hold the market back and even the biggest stock on our market is not immune.

News of higher inflation and the RBA’s decision to begin increasing the cash rate by 0.25% was dramatised by the media, so let’s put it in context as rates are still at their lowest levels in history and we all know banks make higher margins when borrowing costs rise. The Banks have lifted borrowing rates in line with the RBA’s increase.

So, this is how we view the current pullback in CBA’s share price. It simply allows the stock to build support from buyers prior to it rising to break the all-time high of $110.19 in November 2021. In the short term, CBA’s share price is likely to settle just below $100 before it tests buyer support for the next rise.

4. CSL Limited (CSL)

CSL’s price chart has dramatically changed since the COVID pandemic began. The historical trajectory of CSL’s share price has been up for over a decade, with very little downside as it rose to its all time high. Unfortunately for long term investors the stock changed personality in February 2020 to the point where currently we now do not consider it a low risk investment. The longer it trades below $320, the greater the uncertainty around the medium-term direction of its share price.

The one positive is how the share price has held up better than expected. CSL was up 1.92% to $273 in April and continued to trade up slightly higher in the first few days in May. Considering short term upside, CSL may be in the early stages of a recovery, however the big concern for CSL shareholders is what has already occurred. In February 2022 CSL fell below the low of $242 in March 2021, indicating the longer-term direction remains down. Given this, it must jump through a number of hoops to provide confidence that any short-term recovery can become a stable medium to long term rise.

5. Fortescue Metals Group Ltd (FMG)

Although FMG’s share price recently pulled back to the level we expected to find support at around $20, FMG has currently held up well. The share price gained around 4.7% in April while the other big iron ore miners fell. Though at times FMG has been the least volatile of the big miners, it was not immune from the sell-off that occurred when iron ore fell on the further COVID lockdowns in China. From its peak in April FMG fell by 16.7%, compared to 16% for BHP and RIO lost around 19.6% of its value.

Volatility in the iron ore price due to the situation in China is allowing the short sellers to borrow stock to sell it down and play havoc with the share prices of our iron ore stocks. Although it looks positive in the medium to long term, FMG stocks will likely instill more confidence in investors if it trades back above $21 in the short term to avoid a further sell-off.

6. Macquarie Group Limited (MQG)

MQG shareholders will probably have been shocked to see their shares fall by around 7.6% on May 6. Although MQG had just announced a staggering profit of $4.7 billion dollars, representing an increase on the previous year of 56%.

The market reacted to the talk of inflation getting out of control and this means further rate hikes by the RBA are likely. We had said it was unlikely for MQG to trade below the March 2022 low unless a broader market sell-off occurred. As the market has been sold down, the likelihood of a further fall in the share price is likely in the short term.

Related article: 10 Best ASX Stocks To Buy Right Now

7. National Australia Bank Limited (NAB)

NAB’s share price gained approximately 0.9% in April which was a great achievement given the run it has had. We wondered when the rise would end, however, historically $33 was an important level for NAB and had the potential to turn the price down at least in the short term. It appears that growth for this half of the year has been fully priced into the stock.

NAB traded up to $33.75 on April 21 before it fell by around 10%.  NAB appears to be pulling back to test the angle of the prior rise.

8. Westpac Banking Corporation (WBC)

Prior to the RBA’s decision at the start of May to lift the cash rate, WBC had shifted its view on the timing of the next RBA rate rise to June 2022. Prior to this most banks expected the RBA to begin hiking rates later in the year. With the first of a potential series of rate rises this year behind us, the RBA may further increase the cash rate in June 2022, with the banks predicting the next rise to be 0.4%.

In previous reports we have been optimistic about the future for the WBC share price, while also having identified the short term risk to the downside. Our analysis indicated that WBC had the potential to fall to around $23.20, it fell to $23.40 on April 27 before turning back up.

In April WBC fell just 1.53% and has since held up extremely well which may indicate the potential to rise from here rather than fall further. Although there is a risk of a further fall below $23 in coming months.

9. Wesfarmers Limited (WES)

The stock fell by around 2% to $49.41 in April and is now trading above April’s close. There is one reservation about this view, and this is that currently the stock is teetering around a very important support level at approximately $48.50. A strong fall below this level could indicate the current medium-term decline will continue to between $42 and $43.

10. Woolworths Group Limited (WOW)

WOW has had a stellar rise of 18.5% from its low of $33.45 in January 2022 to a high in April 2022. The stock gained 3.35% in April, however, as defensive as WOW may seem to be, the share price has fallen recently by around 6.4% to the low on May 12. We previously mentioned the importance of the $38.20 level and while WOW’s share price did exceed this price, the rise proceeded unabated which makes it difficult to be confident that the recent gains could be repeated this year.