Barron's Streetwise - Andrew Bary’s Top Stocks for 2026

Episode Date: December 19, 2025

The Barron’s star has a hot hand after crushing the market in 2025. Can he do it again? Learn more about your ad choices. Visit megaphone.fm/adchoices

Wait, why are we clapping? We're, we're, you're sinking, what are you sinking? I'm sinking your track and my track because we're not recording in the same room. Ah, okay. So I need some sort of mechanism where I can sink them up. And that, that's the clap. Yeah, okay. But so, so one, two, three and then clap or one, two, and then clap on three?

No, one, two, three, then clap. The same thing came up in, what was that movie, lethal weapon where, remember the toilet, was going to blow up, and they had to pull the guy off the toilet. And it was like, do we go on, on three? Do we do it on three or do it, one, two, three, then do it. Oh, it's your ass, go, geez. I mean, it's up to you. There's a whole extended discussion.

Anyhow, the stakes are not that high right now. So, but let's get it. One, two, three, and then we clap. And then we're starving, right? All right. Who's going to do the counting? I'll count. One, two, three.

How'd I do? All right? That was good. That was good. Thank you. Now all I need is something to say, right? We've got, I don't think there's much. We've got a conversation coming right up with Barron's own Andrew Barry. And he's going to give us his top stock picks for 2026.

If you don't hear all the ticker symbols or any of the ticker symbols, don't worry, I'll give them all to you at the end. And that's it. Let's get to the conversation. Andrew Barry, as I live and breathe, I looked at my calendar today. says Andrew Berry's top stocks. You can imagine my excitement. How are you? Doing great. Glad to be with you, Jack, for another run at this. Each year, you put out your top 10 stock picks for Barron's, and you had quite a bit of success last year. How'd you do? Yeah, I mean, we had a great year in 2025. We had 10 picks, and they were up in total return about 28%, which was more than 10 percentage points

better than the overall market. And we make the picks in December. We measure them 12 months later. We can't change anything. So we got to live with them. And I mean, this can be a humbling game. I mean, 2024 was not great. And so, I mean, we're hoping for a good 2026. And I think we have a good list here. Hold on. I just want to make sure I've got the numbers right. 28% last year. That's including dividends. And the S&P 500 returned 15%. So you nearly doubled the S&P. So you're calling it a humbling game. But right now, you're riding high. You're riding high in the saddle. I mean, yeah, I mean, we're definitely riding high. And some of the stock picks we made are even off to a pretty good start for 2026. But it's a long game. It's a full year. I mean, let me tell you a little

bit about what's behind the 10 stocks. I've got more of a value orientation. So many of the stocks are quote unquote value stocks. They're not some of the growth darlings in the market. But we have picked three growth stocks that have been laggards in the market during 2025. And I think if you pick quality growth companies that have lagged the market. That's often a pretty good investment strategy, but we can get into some of the names in a few minutes. Am I right that the approach is not the same thing every year? Like you might change it depending on how the market's position or what's cheap or what have you? Like last year, you had a number of kinds of tech stocks that won big. Yeah, I mean, I try to go where I think there's opportunity. And I mean, this past year, we won with a couple

stocks, Google, which was the best stock in the MAG-7, City Group, which was the best bank among the major banks. Alibaba was a huge winner. Uber was a big winner. So, I mean, they were among the stocks that really powered the 10. None of those stocks are on the list for this coming year. I try to have a new group or have very little overlap. I try to have a fresh group.

And I think some of the stocks have gotten to be more fully priced for 2025. All right. Let's put this hot hand to work for your. picks for 2026. Is the list on the whole cheaper? Is it more of a value tilt this year than last year? I would say it's more of a value tilt than last year. But I mean, there are also some special situations as well. All right. Let me run through these names. The first one I've heard of, it's Amazon.com. Well, Amazon is actually the worst performer among the mag seven stocks this year. It's basically about flat stocks trading in the 220s right now. And there are like twin concerns.

One of them is that there was a slowdown for part of the year in their Amazon Web Services, which is their leading cloud computing business. And I think there may be some lingering fears about the health of the consumer, and as well as whether there'll be as much of a beneficiary from the AI boom as some of the other Mag7 companies. But it's left to the company and the stock trading at a pretty reasonable valuation. It's trading for under 30 times 2026 earnings. We're using a conservative 2026 estimate that includes stock compensation. that's below Walmart, below Costco.

And this is a double-digit earnings grower with two phenomenal franchises, e-commerce where there's a leader in the United States, over a 40% market share, and Amazon Web Services, the leader in cloud computing, plus some interesting other businesses advertising, $75 billion in revenues, very high margin, and other things like Alexa and also a satellite communication business, which may compete against Elon Musk's Starlink. Have you used Rufus yet in your shopping?

Amazon's Rufus AI. I don't use any of that kind of stuff. I mean, I'm a single guy. I mean, and so I don't really need. I kind of know what I like. Well, I'm not asking you to start a relationship with Rufus. I'm just asking if you're using it for shopping. Nah.

All right. Next one, Bristol Myers Squib. I mean, the drug industry during 2025 has been a story of haves and have-nots. The biggest have-hav-has been Eli-Lylii, the lead in the GLP-1 diet drugs. Bristol-Myers has been a have-not along with Pfizer and Merck. It's viewed as being a company with a somewhat challenged outlook in terms of the quality of its pipeline, and also it's facing some patent expirations on key drugs. Stock is flattished to down this year, but it's trading cheaply now.

Nearly a 5% dividend yield, the P.E. ratio. I love that. Gigantic dividend. Very nice dividend, and I think it's very sustainable, and you've got a P.E. under 10, and you've got an underappreciated pipeline. They've got a drug for Alzheimer's, which I think could be. an interesting one. The stock is actually starting to pick up ahead of steam. This was actually recommended by Barron's Investor Circle, which is doing stock picking in conjunction with Barron's.

And I try to be somewhat collegial in terms of taking some ideas from some of my colleagues, and I think that they're good ones. Okay. Now look, Comcasts. I can think of a lot of reasons to not like Comcasts, right? Trouble in television, trouble in, even the cable broadband business. I feel like telecom has come after that hard with all the fiber that they're laying out. So what's the appeal here? Is it that it's cheap? Is it that I'm underestimating the strength of the broadband business? What do you like about Comcast?

Well, yeah, you're right about that. I mean, the stock has been a weak performer this year, down 15, 20 percent. It's now trading around 28 or 29. The concern is that there's more competition in broadband, which is their by far their most important business from telecom companies like AT&T that have laid fiber, also Team Mobile and others are offering what's called fixed wireless, which is a low-end version of broadband, which is less expensive. There's more competition. There's price competition. And that's been depressing Comcast stock, but it's a very cheap stock, nearly a 5% dividend, one of the lowest

PE ratios in the S&P 500. It's only around 6 for 2026. And you could see some, a catalyst. They have a big media and entertainment business, NBC Universal. They own the theme park in Orlando, which they just opened a new one. They have NBC. They've got universal pictures. And there could be a spinoff of that business during 2026. And that could be a catalyst. A spin off of which business? Of the media and entertainment business, NBC Universal, which they call NBCU. It looks like there's buyers out there for legacy media assets. So why not, right? I mean, if Paramount loses the battle for Netflix. It's a potential combination with Paramount. And if Netflix loses the battle for Warner, it potentially could do something with Comcast. And you've seen in the last

couple days, Comcast stock has started a rally. There has been some speculation that an activist may surface in the stock. The company is controlled by the CEO Brian Roberts. The Roberts family founder of the company. His controlling stake is only about a 1% economic stake. And so there could be pressure on Comcast during 2026, and I think that could be bullish for investors. ExxonMobil. What's the chief appeal here? Is it tons of free cash flow? Is it an opportunity to increase production?

What do you like here? Oil has been an outlier in the commodity markets. Oil has been weak this year. It's under $60 a barrel down 15, 20%. In fact, oil recently hit its lowest levels for a couple of years. ExxonMobil is the champ, the best company in the industry. It has the best balance sheet, best management, best production, I think it's argue the best outlook, best diversification. So it's a quality play in and out of favor sector.

The stock has held up reasonably well given the fundamentals, but they're looking to boost their production in the coming years. They're very strong in the Permian Basin in Texas. They also are the leaders in one of the best oil fields in the world off the coast of Guyana. You're talking about a stock that's trading around 15 times forward earnings, about a 3% dividend year. Super solid. It's a conservative play right now. Have you watched that show Landman? Yeah, I love that show, Landman.

I knew you would love that show. You're a landman guy. I mean, I love the whole oil patch and the outsized characters and the craziness that goes on down there. It's interesting that, you know, the Landman commented that, you know, Exxon and Chevron don't really get involved in these kind of games because, you know, they don't really need

to play in the gamier side of oil and gas exploration. But anyhow, Exxon is definitely a company. Okay, now we've done, let me see if my math is correct here. Amazon Bristolmeier Comcast and Exxon. So we're going to do one more, and then we'll be halfway through and then we'll take a break. So the last one before we take a break is Fairfax Financial Holdings. I'm not that familiar with this one. Well, let me introduce you to it. I mean, I follow Berkshire Hathaway very closely. Berkshire's been on our list of top 10 stocks for many years. I took it off for 2026. I put on

Fairfax, which I would consider to be a mini Berkshire Hathaway. There are a number of companies that have pursued a similar strategy to Berkshire on a much smaller scale. I think Fairfax is one of the better ones based in Canada, founded by someone named Prem Watsaw, W-A-T-S-A, and it's got a great long-term record in terms of stock market performance and book value growth. And right now, it's trading mostly in Canada. You can buy there's some U.S. listed shares, which are not super liquid. The ticker is FRF. HF. What's the specialty in terms of what they invest in? So it's basically insurance and investments. It's property and casually insurance and investments. They aim to grow their book value 15% a year. And if the stock price follows book value,

which is done historically, you can be staring at a 15% plus return. They're also very shrewd investors. And they have some very successful investments outside the United States, particularly in India. They've invested in some Indian fintech companies. They also control the Bangalore airport of all things. So it's an interesting mix of businesses. And actually a former Berkshire Hathaway executive, David Sokol, who left Berkshire about 10 years ago,

was actually involved in running a shipping business for them. It's a nice package and not well-known, but I think it will become better known, particularly if they get a more high-profile U.S. listing. We're speaking with Andrew Barry, Barron's associate editor with his top 10 stock picks for 2006. The first five are done. We'll hear about the next five coming right up after this quick break.

Welcome back. Andrew Barry from Barron's joins us with more of his top 10 stock picks for 2026. Andrew, I think half my town is sick with the flu right now. I can't remember you ever getting sick. Do you not ever get sick? What's your secret? I try to be indestructible in an Iron Man. I'm not sure what.

I think it's more luck than anything. There's no herbal remedy, herbal. I don't buy into any of those supplement stuff. I eat a Warren Buffett-style diet, which is like cheeseburgers and Cokes and hash brown. Don't make me laugh. I'm too congested. All right.

We left off with Fairfax financial holdings, and we're still on the F's. Next up is Flutter Entertainment. Tell us about Flutter for people who don't know the company. Well, most people in the United States don't know Flutter, but they do know it's U.S. business. It's the leading online sports gambling company in the world, and it owns Fanduel, which is a leading online sports betting company in the United States. It's bigger than Draft Kings. Now, what I know about sports betting, obviously it's exploding, but I hear about

about everybody getting into these prediction markets. And there just seems to be a lot of competition for taking these bets between the prediction markets and the traditional sports gambling companies and, of course, the casinos that were in that business to begin with. Where is this company positioned that you feel like it's a good pick? Fanduil is the center of and the focus of the company. You're right that the growth in prediction markets, Kalshi Polymarkets, has hurt, flutter stock this year. It's down this year. But it's difficult. for prediction markets to replicate what the online sports gambling companies can do. For instance, it Flutter, one of the most popular things and one of the most profitable parts of the businesses

are so-called parlays. It's multiple events in a single bet. Rather than betting, the Knicks are going to win tonight. You would bet that Brunson's going to score 40 and you might have Josh Hart scoring 30. Wemba Yama's going to hit his head on the rim, whatever it is. Right. And so you might have four or five events and it's a big payoff. They're harder to structure. You need to have expertise. That's very popular. Also so-called prop bets, which are unrelated to the outcome of the game. How many points is Brunson going to score tonight? How many minutes will he have? You know, what color will a gatorade will be thrown on the coach at the Super Bowl after they win? That kind of stuff you really can't have in prediction markets. And I think they really excel at doing that. And the stock is trading now for about

20 times 2026 earnings, given the fact that the earnings are growing 40% this year and, I mean, during 2026 and 2027, I think it's a pretty reasonable valuation. And the company moved his primary listing to the U.S. in the last year or so it could be added to the S&P 500 during 2026, which would be a nice bump. By the way, speaking of the Knicks and Wembe, the Knicks beat Wembe Yamah and the Spurs to win that mid-year championship they're doing in the NBA. I forget but they call it Emirates or something like this. So the Knicks are looking good, and your next pick here is Madison Square Garden Sports.

What do you like there? Well, Madison Square Garden Sports owns the Knicks and the New York Rangers, and the Knicks are having a great season so far. I mean, whether or not they can get past Oklahoma City, which is the best team in the NBA, one of the best teams ever. My sources are telling me they cannot. Yeah, I know.

So, I mean, that's going to be an impediment come next spring during the playoffs, I think, for them. But the story with MSG sports is it's a very cheap sports play. Sports investing is really hot. There are a lot of private investing going on in sports companies. And the market value right now of Madison Square Garden Sports is about $5.5 billion. The value in Nix alone is probably $10 billion. The Lakers in Los Angeles sold for about a $10 billion valuation in the past year.

The Rangers are probably worth $3 to $4 billion. That's about $13 to $14 billion. So at $5 billion, you're paying a very big. big discount to the value of the two teams. Why does it trade so cheaply? They call it the so-called Dolan discount. The Dolan family controls the company. Jim Dolan is a CEO. He's essentially ruled out of sale of the company, and that's why it trades so cheaply. I mean, that's not great corporate governments. You could see potential activist involvement in this stock, and there's a possibility they might split the two teams, create a New York Nick stock, New York Ranger stock.

They also might sell partial interest in one of the teams to some rich people in and use that money to buy back stock. I think there's a lot of, quote, unquote, optionality or ways where you could win with MSG sports in 2026. It's a far better investment, I think, than buying a lot of these private sports investing things that are now very popular with rich people. I feel like with sports teams and ownership,

there's a lot of vanity involved, which takes you outside of traditional economics, which means if in the future you want to sell something, I feel like there's a good chance that you can sell it for more than it's worth because of the vanity factor. Yeah, the vanity factor is big. I mean, if the Knicks were to go on the market, it would be like tremendous interest. The Rangers went on the market, there'd be tremendous interest. The problem with sports teams, they tend to not make a lot of money because of high player salaries and other issues. Like MSG sports has no dividend. It's got very little

free cash flow. I mean, the payoff really comes in a sale. And the reason why the stock, one of the stock trades so cheaply is that no one sees a sale as being imminent or if ever. And there's not a lot of income or cash flow being generated in the interim. So that's why I think there's the opportunity right now. Here's the name I see around town, and by town I mean New York City, S.L. Green Realty. S.L. Green Realty is the leading commercial property owner, Manhattan. They own a lot of office buildings, particularly in the so-called Grand Central Card around Grand Central Station. They own one Vanderbilt, which is a huge thousand-plus foot tower, which is very valuable. It has an observatory at the top. And it's out of favor for a couple of

reasons. There's some concern about the incoming mayor of Mamdani, who is a Democratic socialist. He's not exactly a business friendly guy, and he's talked about freezing rents, but he was talking about freezing rents on apartments, not on commercial. So I think there's a bit of an overhang from the Mamdani factor. The stock trades cheaply. It's in the mid-40s right now. A dividend yield is north of 5%. And the company recently had an investor day where they think that the net asset value of the company is well north. of $70 a share. The stock's trading in the mid-40s right now. So I think it's an interesting play in what's now an out-of-favor sector, which is New York commercial real estate.

Okay. The next pick on the list is Visa. What do you like about Visa? Visa is one of the great financial companies. It and MasterCard are the leader in terms of payments processing for credit and debit cards. Went public more than 15 years ago. Huge winner. It's a so-called compounder. it grows its earnings, which means it steadily grows its earnings, pretty much regardless of the economic environment. It's a very durable business model. Stock has come under some pressure this year. It's been a bit of a laggard. The reasons include concern about threats to their kind of near-monopoly position with MasterCard stable coins, buy now, pay later, and merchants don't like them, but everybody else pretty much in the payments ecosystem does like a visa. Very high margins.

the world in America continues to move to plastic from cash. It's a big headwind plus economic growth and greater spending. And it's really almost a toll taker on some of those trends. The stock is not cheap. It's trading for about between 25 and 30 times earnings. But given the low double digit to teens growth rate on the company, I think it's pretty reasonable and it's very high quality. I'm starting to feel a little bit sad because we're through talking with nine of these

stocks. There's only one left. Well, the last one is near and dear to you, Jack. It's Disney. You wrote a cover story on it for Barron's during 2025. It's not nearly as near and dear as it was when the kids were small. I used to go to some of their parks. This is before they, now it's like billionaire pricing over there.

And also the kids are older. Well, I mean, that's one of the issues. Disney stock is about flattish this year. And one of the concerns is that they've raised prices so much, particularly at Disney world, which is the key part of their parks business, which in turn is probably the most of value. part of the company. People are concerned that I think, you know, you may know better than I do. I think you can pay $200 a day per person at Disney World during the Christmas season. It's a very expensive

trip. I spend that much on churros. Go ahead. But, yeah, but Disney stock is trading now around 110. It's trading pretty reasonably now, especially in light of the takeover battle for Warner Brothers. I think Disney trades cheaply relative to Warner, cheaply relative to some other media plays. It's trading for about 16 or 17 times 2026 earnings. They projected the 10-ish percent growth in earnings in 26, 10 percent in 2027. So you get a nice earnings trajectory. And there could be some catalyst ahead depending on what happens with the Warner Brothers takeover battle. Plus, you have a wild card. Bob Iger is finishing up his second run as CEO in 2026. He's due to retire at the end of the year. I think he wants to go out on a high note. So far, his second tenure has not been

super great from a stockholder standpoint. We don't know who the next leader is going to be in Disney, but I think that could be an interesting potential catalyst for Disney during 2026. It's a low expectation stock now. And I think it's worth people taking a hard look at. What levers does Bob Iger have at his disposal to pull if he wants to get the stock working better in 2006? You know, if he's looking at, if he's leaving at the end of the year, that's not much time to get some buzz going around the stock. Well, you know, I mean, that's unclear. I mean, they've got the streaming businesses. You got the parks business. You got ESPN. You got the ABC. I mean, you've got a lot of pieces there. I mean, I don't really have an RX for him in terms of what they could do. It's not like

Comcast where there's an obvious thing they could do, which has been off their entertainment business. I mean, Disney's already entrenched. They feel that the ecosystem that they have right now is very valuable and works and they don't need to, quote, do anything. And, you know, right now, Disney and Netflix have about the same amount of earnings of net income. And Netflix has twice the market cap. I just don't think that's justified. I think Netflix is a great company, but I don't think it's twice as good as Disney is.

As Netflix is showing now, then when they're in bidding for Warner Brothers, they seem to want to add to their empire when a lot of people thought they had all they needed. So I think Disney versus Netflix could be an interesting trade for 2026. It's already happening because Netflix has been underperforming recently. Thank you, Andrew.

I promised everyone some ticker, symbols. Here they are. Amazon, AMZN. Bristol-Myers Squibb, B-M-Y. Comcast, C-M-C-C-S-A. Fancy five letters. Exxon, X-O-M. Fairfax. The ticker is F-R-F-H-F. Remember it, just say for-for-H-H-F. Flutter Entertainment, F-L-U-T. Madison Square Garden Sports, MSGS, S-L-G, S-L-G, V-S-S-S-S-L-L-S. V-S-S. look at you with a one-letter ticker V, and Disney is D-I-S. Thank you all for listening. Alexis Moore is our producer.

You can subscribe to the podcast on Apple Podcasts, Spotify, wherever you listen. If you listen on Apple, you can write us a review. If you have a question, you'd like played and answer it on the podcast, you can send it in. It could be in a future episode. Just use the voice memo app and send it to jack.how. That's H-O-U-G-H at Barrens.com. See you next week. Thank you.