2 number of shares for investors to consider buying before they explode in 2025
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No one really knows where UK stocks will go in 2025. But I see a few attractive stock prices for retail investors to consider adding to their portfolios now in the hope that the markets have a great year.
Recovery is on!
A luxury watch retailer Swiss watches (LSE: WOSG) is one example of a stock that looks poised for a strong rebound. In fact, one can say that recovery has already begun. After enduring a tricky few years due to the cost of living crisis, the stock is up 34% in the past month alone!
This momentum was no doubt helped by the positive half-year results in early December. Meanwhile, management reported 4% revenue growth due to “encouraging improvement in trading in Q2“, partly due to better demand in the UK and US.
There is still time to think about buying
I think there may be a lot more potential ahead, especially since the stock still trades at a 14 price-to-earnings ratio (P/E). That’s not as low as it was a few months back but it’s below the company’s P./E ratio of 19 over the past five years. And it doesn’t sound too far-fetched if (and here’s an ‘if’) the UK economy holds its own next year.
Whether this will happen is open to debate. If inflation increases, the price of Watches of Switzerland will probably go sideways. There is also no dividend stream to compensate investors for staying put.
If, however, inflation comes back in line with the Bank of England’s 2% target, we could see further interest rate cuts. This should then feed into improved consumer confidence, potentially leading to improved profits from the Leicester-based business.
Dirt cheap
FTSE 100 a member JD Sports Fashion (LSE: JD) is another company that I think offers great value. The forecast P/E ratio for FY26 (starting February) stands at an incredibly cheap seven. And, that looks very attractive considering the company’s five-year average is no less than 20!
This is not to say that the £5bn cap does not currently face many challenges. For example, one of the main products it sells – the US giant Nike – have a nightmare year as smaller, more fictional rivals Opened again Hook up take market share.
Growing up overseas
However, can the above be considered a long-term issue? I have no doubts, especially if new Nike CEO Elliott Hill delivers on his promise to revitalize the business. In general, the future of the global sportswear market looks strong.
In fact, JD Sports looks well-equipped to ride out any storm thanks to its wide range of products, multi-channel offering and rapid growth overseas. Earlier this year, it acquired US rival Hibbett as part of a strategy to expand its footprint across the pond.
I also think it’s comforting that there seems to be very little interest in the company from short sellers. In other words, not many traders seem willing to gamble that the stock price will continue to fall.
Buying a stock where no one else is is going to be very profitable in the long run. While there’s a chance things could get off to a rocky start if January’s Q4 update fails to impress, that could be the case here.
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