My Selection of Top 10 Investment Assets for 2025
In under two weeks, we'll flip the page on what should be another stellar year for Wall Street. Up until the closing bell on Dec. 17, the well-known Dow Jones Industrial Average, diverse S&P 500, and progress-driven Nasdaq Composite saw gains of 15%, 27%, and 34% respectively for the year.
These substantial increases can't be denied, but Wall Street is all about looking ahead and not dwelling too much on the past.
Given that this is one of the costliest stock markets in history, I don't anticipate a continuous upward trajectory for equities in 2025. However, this doesn't mean I'm planning to step away altogether. I'm an investor with a long-term perspective, and the vast majority of the 35 positions I plan to enter in 2025 have been held for a year or more.
My investment strategy is reminiscent of Warren Buffett's in that I believe my top investment ideas warrant a substantial portion of my capital. At present, my top 10 portfolio picks for 2025 account for 75% of my invested assets, excluding cash. I'm optimistic that they will outperform in what might be a challenging market.
1. Teva Pharmaceutical Industries
My highest-valued holding, drug developer Teva Pharmaceutical Industries (TEVA -1.25%), should commence 2025 on a high note following its and Sanofi's impressive phase 2b results for experimental inflammatory bowel disease drug duvakitug. Management's strategic shift away from low-margin generic drugs to more profitable, brand-name treatments is expected to result in steady income growth for the remainder of the decade.
Furthermore, Teva has effectively resolved its major concerns. It has settled its long-standing opioid litigation, and its net debt has decreased from over $35 billion following the Actavis buyout in 2016 to approximately $15.7 billion as of September's end.
As a result, Teva's forward price-to-earnings (P/E) ratio of 7.5 is a bargain.
2. SSR Mining
While Teva flourished in 2024, precious-metal miner SSR Mining (SSRM 1.46%) had a disappointing year marked by the heap leach pad collapse at the Copler mine in Turkey. SSR forecasts spending up to $300 million in remediation costs at Copler, with this clean-up process expected to last 24 to 36 months.
Nevertheless, I believe SSR Mining's assets are worth more than what the market currently values the company at. The company's recent acquisition of the Cripple Creek & Victor gold mine from Newmont Mining, combined with its existing gold production from the Marigold and Seabee mines, indicates strong cash flow as gold mirrors near an all-time high.
Furthermore, SSR Mining has historically maintained a net-cash position and has sufficient resources to tackle its challenges in Turkey.
3. Meta Platforms
Although Wall Street is captivated by social media titan Meta Platforms' (META -0.97%) AI and metaverse aspirations, I continue to be astounded by its advertising dominance. Meta managed to attract 3.29 billion daily active users to its platforms during the September-ended quarter, and there isn't a social media platform that comes close to rivaling these figures. Meta often enjoys considerable ad-pricing power as a result.
Meta's robust balance sheet and operating cash flow enable it to be aggressive with high-growth initiatives. It closed out September with $70.9 billion in cash, cash equivalents, and marketable securities, and is projected to reach $85 billion in net cash from operating activities in 2024.
Even despite being near an all-time high, Meta's forward P/E of 24 is relatively affordable.
4. Bark
As you may be noticing, I have a fondness for small-cap stocks and under-the-radar companies. My fourth-largest holding is pet products and services provider Bark (BARK -1.07%), which predominantly generates revenue through direct-to-consumer sales.
The wonderful thing about pets is that they're routinely viewed as an integral part of the family. People are typically willing to spend to ensure the well-being and happiness of their four-legged companions, resulting in pet expenditures increasing regardless of the U.S. economy's condition.
Instead of prioritizing breakneck sales growth, Bark's management has focused on cost reduction and generating positive cash flow, which has been successful. With direct-to-consumer gross margin approaching 65%, Bark has the potential to achieve profitability in the near future.
5. Lovesac
Another obscure small cap I've invested heavily in is furniture retailer Lovesac (LOVE -1.00%). This company generates over 91% of its net sales from its sactionals, which are versatile couches that can be arranged in numerous ways to fit various living spaces. It's challenging to find genuine differentiation in the furniture industry, but Lovesac's premium products have proven to be a success.
Furthermore, Lovesac leverages its omnichannel sales platform. While it operates brick-and-mortar stores in 42 U.S. states, it primarily relies on direct-to-consumer sales, partnerships, and pop-up showrooms to minimize overhead costs.
Though the company is dealing with some temporary difficulties, its long-term growth prospects remain appealing.
6. PayPal Holdings
PayPal Holdings (PYPL -0.09%) takes up the sixth-largest space in my 2025 portfolio. Concerns about rising competition in the digital payments sector haven't diminished the company's growth. The number of completed payments by active accounts during the previous 12 months has grown steadily, rising from 40.9 at the end of 2020 to 61.4 by September 2024. PayPal's active user base is more involved than ever.
The addition of Alex Chriss as CEO last year has payed off. Chriss, who came from Intuit, where he focused on the company's Small Business Group segment, understands the innovations required to attract new businesses. He's not afraid to tighten the budget when necessary to boost profits.
PayPal's aggressive share repurchase program, with $5.4 billion worth of shares purchased over the previous 12 months, should lead to a boost in the company's earnings per share.
7. Bank of America
Bank of America (BAC 0.09%) has been a long-term holding of mine since 2011 and is one of the least likely stocks I'll sell. The bank is the most interest-sensitive among America's largest banks by total assets, which can result in a dip in net interest income during a rate-easing cycle. However, it also means the company benefits greatly from a steep rate-hiking cycle, such as the one from March 2022 through July 2023, which has been the highest in four decades. The bank's ability to navigate both types of cycles makes it a strong investment.
Donald Trump's electoral victory in November 2016 is another positive for bank stocks. The incoming Trump administration is expected to ease banking regulations, leading to higher profits for banks like Bank of America.
8. Pinterest
Pinterest (PINS -0.52%) takes up the eighth-largest space in my 2025 portfolio. Despite fluctuations in its monthly active user (MAU) count due to the COVID-19 pandemic, a longer-term look at Pinterest's MAU shows a steady incline spanning eight years. With Pinterest's MAU count exceeding 500 million, advertisers are willing to pay a premium. Global average revenue per user (ARPU) grew 5% in the September-ended quarter, with double-digit growth in ARPU observed in emerging markets.
Pinterest's advantage is its operating model. Unlike other social media platforms, which rely on data-tracking tools, Pinterest's users provide valuable information on their interests for free, strengthening the company's ad-pricing power.
9. PubMatic
PubMatic (PUBM -1.67%) is the ninth-largest position in my 2025 portfolio, making it one of the three ad-driven businesses in my top-10 holdings. PubMatic finds itself at the center of the fastest-growing niche within advertising: digital ads. Its cloud-based programmatic ad platform helps publishers sell their digital display space, with a focus on video, mobile, and connected TV, all of which can deliver sustained double-digit growth in spending.
PubMatic's unique selling point is its self-developed and self-built cloud-based infrastructure, which should result in better margins as revenue scales up. The company also has over $140 million in cash, cash equivalents, and marketable securities, with no debt and a regular share repurchase program.
10. First Majestic Silver
First Majestic Silver (AG 1.85%) is my 10th-largest portfolio holding for 2025. The company acquired Primero Mining in an all-stock deal in May 2018, resulting in a low cost basis for me. However, First Majestic Silver has had a less-than-impressive track record of reducing production costs and consistently generating profits.
Despite silver's growing demand for solar panels and electric vehicles, First Majestic Silver's performance has been inconsistent. New acquisitions and reduced capital expenditures offer hope for increased cash flow in 2025, but I may trim my stake in the company once again in the new year.
In terms of leveraging my investment strategy, I'm planning to allocate a significant portion of my funds towards companies with strong potential for growth, such as Metadata Platforms. The social media titan's robust balance sheet and operating cash flow, combined with its advertising dominance, make it an attractive investment opportunity, even though its forward P/E ratio of 24 is relatively higher than the average.
Given the volatility of the stock market, it's crucial to have a diversified portfolio. This is why I also invest in sectors like finance, with companies like Bank of America being a long-term holding. Despite being interest-sensitive, Bank of America's ability to navigate both rate-easing and rate-hiking cycles, along with potential regulatory easing under certain political environments, make it a sturdy investment option.
