Yearly, we ask our freelance writers to share their high concepts for growth stocks with traders to contemplate shopping for within the yr forward — right here’s what they stated for 2025!
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easyJet
What it does: A no-frills funds airline providing short-haul flights between the UK and lots of European locations.
By Mark David Hartley. 4 years later the UK’s longest-running funds airline, easyJet (LSE: EZJ), has lastly reinstated dividends. At 4.5p per every £5.17 share, it’s not a lot (0.9%) — but it surely’s indicative of a restoration. With the devastating losses of the pandemic now behind it, it’s on observe for progress in 2025.
Value-cutting workouts mixed with a strategic overhaul of operations helped it turn into worthwhile once more this yr. Earnings are forecast to take pleasure in regular progress within the coming yr and the typical 12-month worth goal is between 20% to 30% above present ranges.
However the threat of additional journey disruption isn’t totally off the desk, as viral outbreaks stay an ever-present risk. Moreover, it faces robust competitors from rival funds airways like Ryanair, Wizz Air and Jet2. With excessive debt and a low revenue margin, there’s a lot work to be achieved but it surely’s heading in the right direction for now.
Mark David Hartley owns shares in easyJet.
Fresnillo
What it does: Fresnillo is the most important main silver producer on the planet, and Mexico’s largest gold producer.
By Andrew Mackie. Within the final 60 years there have solely been two gold cycles: throughout the inflationary decade of the Seventies and within the decade following the dot.com crash in 2000. I’m of the agency imagine that we’re within the early innings of a 3rd gold cycle.
In 2024, gold costs are up 35%. Regardless of important margin enhancements, the Fresnillo (LSE: FRES) share worth is just up 10% over the identical timeframe. This disparity between inventory costs and underlying steel costs is symptomatic of common investor sentiment towards valuable metals miners.
So as to scale back threat, I’m solely focused on investing in miners with established cash-generating mines in impartial jurisdictions. With a 500-year historical past of mining to attract on, along with over 2bn ounces of silver sources and 39m ounces of gold sources, Fresnillo is among the greatest UK-listed miners.
I might give a dozen the explanation why traders ought to take into account proudly owning gold mining shares right now. At a basic degree, although, spiralling authorities deficits implies that traders must personal a impartial asset with no counterparty threat. Gold and silver have performed this position for millennia.
Nonetheless, miners always face challenges and Fresnillo is not any completely different. Hovering prices, labour strikes and operational challenges have beset the corporate lately. However I imagine gold is heading to $3,000 and past within the coming years, and I need to get into the sector while share costs are so depressed.
Andrew Mackie owns shares in Fresnillo.
Video games Workshop
What it does: Video games Workshop designs and manufactures miniature figures for its numerous board video games set within the Warhammer universes.
By Zaven Boyrazian. The Video games Workshop (LSE:GAW) share worth surged greater than 15% on the again of its newest buying and selling replace. With pre-orders for its hottest upcoming Christmas Battleforce field units bought out inside lower than 5 minutes, the agency’s earnings jumped effectively forward of expectations. And subsequently, administration hiked its full-year steering.
Nonetheless, this progress doesn’t look like over. There’s a big pipeline of recent Warhammer miniatures lined up all through 2025. And its most up-to-date reveals of the Astra Militarum and Aeldari factions (anticipated to be launched in Q1 2025) seem to have been met with comparable ranges of enthusiasm.
Video games Workshop shares aren’t low cost, with a ahead price-to-earnings ratio of 28.7. As such, investor progress expectations are excessive. And if the brand new upcoming fashions fail to generate enchantment from clients, the group’s growth could fall quick, sparking share worth volatility.
Nonetheless, Video games Workshop has a behavior of defying expectations. That’s why I’ve already purchased extra for my portfolio, even on the present premium valuation.
Zaven Boyrazian owns shares in Video games Workshop.
Watches of Switzerland
What it does: Watches of Switzerland is a multi-channel retailer of watches and jewelry with 221 showrooms throughout the UK, US, and Europe.
By Paul Summers. Shares in timepiece vendor Watches of Switzerland (LSE: WOSG) have been underneath the cosh for the final three years as excessive inflation and a price of dwelling disaster have performed merry hell with gross sales. There’s an opportunity issues may go from dangerous to worse if the current bounce in inflation proves greater than short-term and aspirational customers proceed to steer clear.
Nonetheless, I believe a number of that is already accounted for within the below-average valuation. Latest updates have been reassuring with administration stating that it has seen “continued stabilisation of the UK market in each luxurious watches and jewelry”. The current acquisition of the North American division of designer model Roberto Coin must also increase revenue in time.
I reckon the UK’s greatest vendor of Rolex and Omega ought to be effectively positioned to recuperate strongly if (and that’s an enormous ‘if’) discretionary spending rebounds in 2025.
Paul Summers has no place in Watches of Switzerland
