Share tip review of 2025 and what I’d do with them now
Analyst Rodney Hobson looks at some of his big calls of the past year and what he’d do with the stocks in 2026. He names his top bank, housebuilders to own, plus companies on his sell list.
30th December 2025 08:01
by Rodney Hobson from interactive investor
Every investment portfolio should have at least one bank in it, a mantra that has held for decades apart from the financial crisis of 2007-08. I have favoured American banks in particular since I started writing for interactive investor seven years ago and that bias still holds.
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One should never underestimate the propensity of banks to squander money, but American banks are well capitalised and there is no sign over there of a relaxation of the necessary regulations that have kept them in check for the past 17 years. They have not produced mega profits, nor are they likely to do so any time soon, but they have remained solid and profitable throughout the Covid pandemic, the move to higher interest rates and a prolonged period of absence of big stock market deals.
They should cope well with the current downward phase of lower interest rates, thanks in part to the sensible reluctance of the Federal Reserve Board to cause mayhem by cutting rates too quickly. With the latest quarter-point rather than half-point cut backed by all except the one ardent Trump supporter voting for the sharper reduction, this policy looks set to continue.
Which bank looks best has varied from quarter to quarter, with profits inevitably changing, so at this stage investors may prefer to wait for the 2025 results due in mid-January. But the best option currently is to plump for banks that gain most from handling wealth and assets and those that are into supporting mergers and acquisitions.
Anyone wishing to invest ahead of results could do worse than pick Citigroup Inc (NYSE:C), which began the year at $70, dipped below $60 in April and has since reached $110. I continue to rate it one of the best in the sector. The share charts for JPMorgan Chase & Co (NYSE:JPM), Morgan Stanley (NYSE:MS) and Bank of America Corp (NYSE:BAC), all of which I have commented on favourably, have followed a similar trajectory and still look attractive.
Given the way that the US economy has come through the past 12 turbulent months, and indeed further back in the recovery after Covid, one has to fancy housebuilders, a sector where share prices have not progressed as well as they deserve.
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I said in March thatKB Home (NYSE:KBH)seemed to be bottoming out at $60 but there was more pain to come, with the bottom in fact proving to be $50 during early summer. The shares have crept back up to $64 and should have further to rise.
A larger play in the sector isD.R. Horton Inc (NYSE:DHI), which I have recommended several times over the years, including at $128 in March and again, for active traders only, at $165 in September. The 12-month low was $115 in April, the high $185 in September. At around $155 in December, the shares are worth considering as a purchase.
Energy suppliers have also enjoyed increased demand, though offset by increased input prices that should ease as the US renews its quest for oil and away from the expense of developing green energy.
I have written about the merits of Duke Energy Corp (NYSE:DUK)in particular, tipping the shares most recently at $126. They struck $129 in October, but they have been in a steep decline since to $115. This has been a consistent performer over time for patient investors willing to sit through the dips and there is no doubt that this is a long-term winner. I suggested Southern Co (NYSE:SO) as an alternative at $90, like Duke with a decent yield. The stock looked set to top $100 in October but has run back to a disappointing $85. Buy to take advantage of the slippage. A floor should hold at $80 at worst.
I hate the food but love the shares at fast food chain McDonald's Corp (NYSE:MCD), where I restored the buy rating in January after a dip to $280. We are back above $300 where I would continue to hold with the warning that around $320 has proved an insurmountable barrier several times this year. The rating is not too high at current levels and there is a reasonable yield.
However, no sector has soared like technology. The big question is whether this is a bubble that can burst any day now, as it did at midnight on New Year’s Eve 1999, and those fears have been reawakened by heavy falls in share prices in the sector as the year draws to a close. I have pointed out several times during 2025 that technology has moved on over the past quarter of a century. There are now ballooning revenues to go with the ballooning share prices and AI will accelerate the process.
Ratings have got completely out of hand but price/earnings (PE) ratios in triple figures can work if profits rise rapidly. Famous last words, perhaps, but the tech bubble does not look ready to burst in the next 12 months. I think the latest downturn will prove to be a much-needed correction that will open up buying opportunities in the new year.
This is not a sector for those building steady, sensible portfolios but it is fruitful ground for active traders who know to get in and out with the changing of the tide. Remember that today’s spectacular winners have a habit of turning into tomorrow’s forgotten army.
I have to admit that I got Palantir Technologies Inc Ordinary Shares - Class A (NASDAQ:PLTR)spectacularly wrong. Scared by a PE that actually hit 600 at one point, I rated the shares a sell several time before having to admit that soaring revenue and profits meant that normal valuations did not apply. The shares may have peaked at last around $190. Do not chase them higher unless you really do check your holdings at least daily.
Last February I thought that social media platforms operator Meta Platforms Inc Class A (NASDAQ:META)offered better prospects at $700 with a more reasonable PE and a modest dividend. It was the wrong choice. The shares actually dipped below $600 but have now steadied at around $650 and they are worth considering as a buy.
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A rather different case is aerospace manufacturer Boeing Co (NYSE:BA). For some reason, despite repeated safety issues with commercial aircraft, a rebellious workforce and an inability to produce profits let alone consistent ones, this stock has remained popular with investors. My advice throughout the year to sell looked good in early April when the stock slipped below $140; not so great at $235 in August. However, I cannot believe it is wrong to stay well away.
Admittedly, the side of Boeing selling to the American government has benefited from the global tensions of the past 12 months, but this has not turned the whole group into a cash cow. My advice to sell remains even after the shares have slipped to nearer $200.
As does my sell rating on exercise specialist Peloton Interactive Inc (NASDAQ:PTON), now languishing at $7 and sliding again. The previous floor at $5 beckons.
Rodney Hobson is a freelance contributor and not a direct employee of interactive investor.
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