8 Destructive Trends to Watch Out for as We Ring in the New Year

Every year, the TV finale is "Dinner for One" and at the stock exchange, a peculiar tradition takes place: window dressing before New Year's Eve. This practice allows fund managers to unload unattractive stocks from their portfolios, creating an illusion that they avoided losing market bets in the past year. These sell-offs often exacerbate existing downtrends and lead to steep price drops. Come January, these bargain hunters swoop in, balancing the losses and driving prices up by double digits.

In recent years, these New Year's gambles have often yielded fruitful returns. Last year was no exception, with all eight stocks recommended in BÖRSE ONLINE 51-52/2023 rising in January 2024, four of which by more than ten percent. The average performance of the eight stocks since the recommendation on December 18, 2023, was 12.2%, significantly higher than the DAX's 1.5% increase in the same period.

Two potential New Year's rockets for a turnaround in the coming year are Stabilus and SGL Carbon.

Stabilus, a company known for producing high-quality gas springs that ensure car tailgates close automatically, experienced sales declines in its lifting technology division due to tough automobile market conditions. However, they offset the decline in their core business through a larger acquisition in the industrial sector. Despite not achieving the usual double-digit profit margins in the 2023/24 financial year, Stabilus aims to achieve an eleven percent margin even with stagnant revenues by implementing cost-cutting measures. This results in a low price-earnings ratio (P/E) for a world market leader, which is expected to rise as it is likely to increase profit in 2025, even in a challenging environment. Therefore, a short to medium-term recovery of the stock seems imminent.

SGL Carbon may also see a turnaround in the new year. Fund managers might buy back stocks they sold at the end of the year for window-dressing purposes. This could happen because SGL Carbon is on the verge of divesting a struggling business segment, potentially due to difficulties in alignment with the electric vehicle market. The company has two well-positioned sectors that benefit from long-term trends like growing electromobility. If the problematic area is sold, the announcement alone could give the Wiesbaden stock a significant boost.

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Stabilus:

Specializes in automotive products, capitalizing on growth in the automotive market, particularly in automated sectors.
Listed on European exchanges and recognized for leveraging digital transformation technologies in its operational domain.
Positioned as a potential turnaround candidate due to its foothold in growth areas like automotive automation and digital transformation, expected to drive demand in 2025.
Investors might consider Stabilus’s links to the digitization and automation trends in the automotive sector as a positive catalyst for recovery and growth in 2025.

SGL Carbon:

Supplies carbon-based products to sectors like automotive, industrial, and energy.
Turnaround potential may be inferred based on sector trends towards sustainability and carbon material innovations; additional financial data would be required for confirmation.
Could potentially leverage shifts towards sustainability and advanced carbon applications in 2025, positioning itself for recovery if it adapts to market trends effectively.
Investors should keep an eye on SGL Carbon's strategic pivots and industry developments in carbon technology.

In conclusion, Stabilus and SGL Carbon represent potential turnaround candidates with unique characteristics and promising prospects. Monitoring their updates, market demand signals, and adapting to industry trends appears vital for investors aiming at 2025 stock strategies. Consult more detailed financial reports and market analyses for definitive investment decisions.

Investing in Stabilus and SGL Carbon could be strategic move for the upcoming year, given their potential for turnaround. Stabilus, known for its automotive products and digital transformation technologies, might recover due to growth in automated sectors and the automotive market. On the other hand, SGL Carbon, a supplier of carbon-based products, may benefit from shifts towards sustainability and carbon material innovations. These stocks could be worth considering for 2025, especially as they fit into broader stock-market trends, but investors should carefully analyze financial reports and industry analyses before making investment decisions.