MoneyWeek's investment writers' tips for 2025
Eli Lilly: Stephen Connolly
Recommended by: Stephen Connolly
More than two in five US adults are now classified as obese, and rates are rising across the rest of the world too. It is a chronic disease associated with a costly catalogue of long-term ill health, including diabetes, cardiovascular disease and kidney failure.
Until recently, the medical response amounted to little more than advice on lifestyle. Now a new class of drugs targeting GLP-1 receptors has delivered weight loss that is clinically meaningful and increasingly durable. For the first time, obesity is being treated as a biological condition rather than a failure of willpower. US pharmaceutical group Eli Lilly (NYSE: LLY) sits at the centre of this shift. Its GLP-1 franchise, led by Mounjaro and Zepbound, has demonstrated strong efficacy. For insurers and governments, the attraction is clear: fewer complications, hospital admissions and secondary illnesses driving long-term healthcare spending.
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Crucially, these drugs are expanding the market rather than merely serving the most severe cases. As confidence in their safety and effect grows, treatment is moving towards prevention rather than rescue. That widens their potential market and gives demand a longevity that most pharmaceuticals never achieve. Under CEO Dave Ricks, Eli Lilly has maintained heavy spending on research and development (R&D) through periods when it was unfashionable to do so. Ricks has repeatedly argued that managing a pharmaceutical company for the next quarter rather than the next generation is a recipe for long-term failure.
For long-term investors, Eli Lilly offers exposure to a worsening global problem. After a strong run this year, the shares have recently consolidated amid pricing concerns, political noise and fears over competition. Yet demand remains strong, sales visibility is unusually high and the valuation no longer assumes perfection.
Almadex Minerals: Dominic Frisby
Recommended by: Dominic Frisby
Mineral exploration can be a lottery. I’m not talking here about developing a property where metal has already been found, and proving it worthy of building a mine; I’m talking about out-and-out exploration.
You’ve staked some land because you think there might be gold or some other metal there. Now you’ve got to find it. If it isn’t there, and usually it isn’t, you’ve wasted a lot of time and money. But if it is there, you hit, as they say, pay dirt. If it’s something special it might be worth billions.
There is the metaphor of the burning match. You need to find something before the capital runs out – before the flame reaches your fingers and burns them, before disappearing. But there are ways of improving your odds. Almadex Minerals (Canadian Venture Exchange: DEX) has a market capitalisation of C$28 million (£15 million), with about C$10 million in cash. It is well financed, then, trading at little more than net asset value (NAV) with enough capital for three to five years of drilling. Crucially, it owns six drill rigs, so there is no need to hire rigs (in fact it earns money hiring them out).
The group has more than 20 properties, mostly in the western US. CEO Morgan Poliquin, who comes from a long line of geologists, has an edge. Large-scale porphyry copper-gold deposits account for roughly 80% of the world’s copper supply and a third of its gold. But, he argues, most of the porphyries, where there is outcropping at surface, have already been found.
There are plenty below the surface that have not, however, and Poliquin has a geological pattern-recognition system that helps him target concealed systems underground. He has made three big finds in Mexico, but all were lost to legal disputes. Hence, his shifting operations to the US, where the geology is similar, but the politics are more favourable. Almadex offers a rare combination: low cash burn (thanks to its rigs), proven management with a geological edge, four years of capital and multiple shots on goal given its many properties. It’s a huge gamble.
Europe: Fred Guirinec
Recommended by: Fred Guirinec
My 2025 tips proved to be a roller-coaster. Both Ose Immunotherapeutics in France and restaurant operator AmRest in central Europe slid, but Hungary’s soaring telecoms group 4iG came to the rescue.
Meanwhile, precious metals lifted my portfolio very nicely. I like to think my portfolio, like me, should now mature. But the thrill of identifying exciting subsectors and small-cap stock picking remains irresistible. My focus in 2026? The periphery of Europe.
The economic, fiscal and political backdrop in the UK, France, and Germany is making many investors nervous: they see soaring deficits, high sovereign debt, unpopular leaders and diplomatic rifts with the US. In Northern Europe, Vitec AB provides software to a range of industries, offering a defensive position, but growth is slowing and profitability dwindling.
I prefer Ovzon (Stockholm: OVZON), a satellite-communication play, with far higher potential and, yes, higher risk. In the east, central Europe remains a market exhibiting both value and steady growth. Listed private-equity fund MCI Capital (Warsaw: MCI) is trading at a 25% discount to NAV, limiting downside. The portfolio is focused on software-as-a-service (Saas) and e-commerce in Poland. The manager has built expertise in these sectors and has successfully exited companies this year.
Finally, consider Dominion Hosting Holding (Milan: DHH) in Italy. It offers cloud computing (for training machine-learning models and integrating data) and cloud hosting around the Adriatic. Approximately 90% of its revenues are recurring and overall sales are growing at a compound annual rate of 23%. Dominion is a small company with big potential in a consolidating market.
Physical security: Rupert Hargreaves
Recommended by: Rupert Hargreaves
Of all the potential risks on the horizon for investors in 2026, one of the most worrying is Q-Day: the day when quantum computers can break even the most sophisticated digital-encryption models. No one knows when this day will happen, but with AI and quantum computing coming on in leaps and bounds, it’s something investors need to have on their radar. When quantum computers can break even the most sophisticated digital encryption, the security systems used by the world’s financial institutions will be rendered utterly useless overnight.
It’s not just the financial sector that will be affected. Governments, healthcare organisations and virtually any sector that has become reliant on digital-encryption software to store sensitive information will immediately become vulnerable to digital attacks.
This would be catastrophic for the entire cryptocurrency system. Confidence would vanish as wallets without the most secure three- and four-factor authentication protocols would become vulnerable to hackers. It would take years for companies to upgrade their security systems to deal with the new threat. Even the most advanced cybersecurity companies may struggle to deal with the new attacks.
That could be good news for the traditional security companies: vault and physical lock providers. Even if this doomsday scenario does not play out, the threats to digital security posed by the advances in AI and quantum computing are becoming more severe by the day. That means more data is being kept offline and physical security is returning to favour. Some companies in this sector include secure document-manager Restore (Aim: RST) and Assa Abloy (Stockholm: ASSA-B), one of the world’s leading lock and safe manufacturers.
Law Debenture: Max King
Recommended by: Max King
Trading on a discount to NAV of just 3%, the shares of Law Debenture (LSE: LWDB), with assets above £1 billion, don’t look like a bargain. Yet the stock’s near-ninefold return over the last 25 years is double that of the UK equity-income sector average and the shares have doubled in the last five years.
The secret, says co-manager Laura Foll, is that the firm’s wholly owned independent professional services business (IPS) accounts for 18% of assets, but a third of income. This enables her to settle for a lower portfolio yield (a third yields under 2%) while the trust still yields a fully covered 3.3%. The investment style is value-orientated and the lack of a yield requirement has enabled her to invest in recovery shares, such as Rolls-Royce, Marks & Spencer and Johnson Matthey. The current favourites are commercial property and building materials. About 90% of the portfolio is listed in the UK and half of that in the FTSE 100.
The separately managed IPS business is highly cash-generative and provides steady growth: 7.5% in turnover and profits in the first half of 2025. Its three segments are corporate trust, pensions trusteeship, and governance and corporate services, which includes secretarial, accounting and whistle-blowing arms. Two thirds of the business is repeat business and much of it is counter-cyclical.
The portfolio trades on a multiple of just 12 compared with 13 for the market and will benefit from both accelerating earnings growth from British companies and a likely rerating of the market. In 2026, the risk aversion of UK investors, which has led them to pile up cash savings, is likely to abate as they start to discount a change of government in 2029 or earlier, factoring in better economic times as a result.
Reckitt Benckiser Group: Charlie Morris
Recommended by: Charlie Morris
Investing during bubbles is bad for your wealth, but investors can avoid the worst of the storm by seeing what has been left behind and seeking out value. In 2025, that exercise highlights some of the greatest firms in the world. Defensive quality stocks such as Coca-Cola have long been favoured by Warren Buffett and other legends. These are the firms that not only sell fizzy drinks and chocolate bars, but also other key products, ranging from pharmaceuticals to vodka. With excitement surrounding the latest bubble in computing, these stocks have slumped. My firm ByteTree launched a Quality Portfolio in the summer in anticipation of the great rotation. That is a grand move where the technology giants begin their long and slow death spiral, while investors return to their senses.
A key member of the Quality Portfolio is Reckitt Benckiser Group (LSE: RKT). Wellness and cleaning products generate higher margins because people are less willing to cut corners with their health. Reckitt’s portfolio of market-leading brands across personal hygiene, cleaning and sexual health is enormously powerful. Their core brands dominate their niche, grow market share, and enjoy premium pricing.
The shares have gone nowhere in a decade following the group’s troublesome acquisition of a group selling infant formula. As the legal and commercial consequences begin to fade, a stronger Reckitt is re-emerging. We expect many decades of growth ahead, driven by innovation and marketing. The dividend is backed by decades of free cash-flow growth, and with its high yield and buyback programme, Reckitt offers a compelling route to long-term returns. Investing doesn’t need to be exciting, merely profitable. The best way to achieve that is to keep a level head and seek value. It’s not often that great companies are offered at low prices, but this is a terrific opportunity.
Impax Asset Management Group: Bruce Packard
Recommended by: Bruce Packard
Something that has worked for me in the past is to invest in quality companies with net cash, but where revenue growth has stalled. Games Workshop struggled to grow sales between 2010 and 2016, but since then the shares have soared 40-fold as revenue and profits have accelerated. MS International, the specialist engineering company, was loss-making as revenue fell 21% in 2020, but the share price has since risen 13-fold. Like a true value investor, I was too early with both investments, but held on through the bad times, reassured by both companies’ unassailable balance sheets, and am now enjoying the gains.
I see similar potential in Impax Asset Management Group (Aim: IPX), an active fund manager focused on sustainable investing. The group lost a couple of important fund mandates and has seen a third of assets leave in the last year. Revenue fell 17% in the year to 30 September 2025. Importantly though, the pace of outflows has slowed markedly, from £10 billion in the first half of the year to £2.8 billion in the second.
The group has net cash of £68 million (a third of the market value) and trades on just eight times 2026 earnings. The dividend yield is 7%. That discounted valuation indicates some scepticism that management can halt the outflows, so the investment case is not without risk. Yet talking to friends in their 20s and 30s, they are keen on investing in funds that help the transition to a low-carbon economy. The younger generation might not have large savings now, but their wealth will compound, while they will continue to value sustainability. I own shares in IPX and expect their value to compound too.
Milbon: Cris Sholto Heaton
Recommended by: Cris Sholto Heaton
My pick for 2026 is a growth recovery idea that may be a little early, but is likely to move fast if it gets back on track. Milbon (Tokyo: 4919) is a Japanese hair-care firm selling its products to salons (rather than directly to consumers). Since listing in 1995, it has become the market leader in Japan and increased international sales (mostly in Korea and China) to 25% of revenue. Sales have grown every year except 2020. An excellent record left it on a steep valuation that was very vulnerable to disappointment, which came with a vengeance in 2023. Rising costs became a running problem, while large inventory write-downs for new ventures – a line of cosmetics that has not really taken off and a hairdryer developed with Panasonic that did not sell well – have dented its record. Trading conditions continue to be tough this year, although third-quarter results showed signs of improvement.
The bull case is that sales growth is holding up: the problem is profitability and management are saying the right things about controlling costs, improving inventory management and raising prices (Japanese companies are still adapting to the return of inflation). Milbon’s sales and support network is unmatched in Japan and it has clear medium-term growth strategies – increasing “take-home” product sales to consumers via salons, becoming the market leader in Korea and expanding in the US. It has no debt and 12% of its market value in cash, leaving it well placed to invest for the long term. The shares trade on 25 times this year’s depressed earnings, but around 16 times forecast earnings for 2026 and yield 3.5%.
Cordiant Digital Infrastructure: David C. Stevenson
Recommended by: David C. Stevenson
The most interesting alternative-investment fund on the market is Cordiant Digital Infrastructure (LSE: CORD). You’d think that investing in everything from fibre-optic networks through digital broadcasting to data centres was highly fashionable. And in fact, if you were looking at a stand-alone operating company owning assets such as mobile-phone towers and listed in the US, you’d be right: valuations are sky high. But Cordiant has been dragged down by concerns over a rival fund, Digital 9, which has imploded with catastrophic losses. Investors have shied away from Cordiant, even though it’s conservatively managed by an experienced team that is a big investor in its own fund. Cordiant started with a sensible, low dividend yield at flotation and has increased that payout, but it’s still only yielding a reasonable 4.4% annual dividend.
It is focused on growing the value of its assets, with a one-year total NAV return (including dividends) of 16.5% and a five-year total return of 45%. It has kept gearing to a sensible level and made acquisitions in slightly less well-known markets, such as Ireland or the Czech Republic. Crucially, it has bought at sensible prices. The portfolio is valued on a discounted cash flow (DCF) basis; the valuation is equivalent to 10.9 times Ebitda. Many of its listed peers are far pricier. I am a long-term investor in Cordiant: this is a classic earnings compounder that steadily expands its business units in subsectors experiencing structural growth.
Goodwin: Mike Tubbs
Recommended by: Mike Tubbs
My 2025 tip, Warpaint London, saw its share price fall due to US tariffs and the administration of Bodycare, a key customer. I therefore hope you also bought my December 2024 recommendation, Singapore Technologies Engineering, up 83.3% over the year. This year I am recommending engineering group Goodwin (LSE: GDWN), which has recently received several new orders and, in October, said it expects profits for the year to April 2026 to be double those of 2024-2025. The profitability improvement extends across all subsidiaries.
Goodwin has three new growth drivers. The first is providing specialist precision castings to multi-decade programmes for UK and US submarines, frigates and aircraft carriers; the Aukus partnership for next-generation nuclear submarines is a key impetus. There are no tariffs for US Navy programmes.
The second growth driver is the collaboration announced with Northrop Grumman Mission Systems, with an initial $16 million order likely to blossom to more than $200 million. The third is the new advanced polyimide division (polyimide is a high-performance polymer used in aerospace, among other industries).
Goodwin has two main divisions: mechanical engineering (specialist castings and valves, radar and surveillance systems, specialist pumps for mining applications) and refractory engineering (investment casting for jewellery and fire safety). The estimated forward price/earnings (p/e) ratio is 30. Goodwin is family-controlled with the family holding just over 50% of the shares. The family’s interests are therefore closely aligned with other shareholders’ interests. Expect plenty of profitable growth ahead.
Focusrite: Jamie Ward
Recommended by: Jamie Ward
Focusrite (Aim: TUNE) is a tremendous little business that has sunk a long way from its highs. The business, one third-owned by the founder, became a stock market darling after listing 11 years ago. Investors were attracted to its high returns on capital, defensible niche and consistent growth. It produces and sells specialist audio equipment for producers and reproducers of music (those in studios and live performers respectively) and caters for both amateurs and professionals.
During Covid the shares spiked to more than 1,800p as people, stuck at home and flush with cash, started to indulge in their hobbies. This caused a surge in sales. This was only temporary, however, and as the world reopened, there was a nasty hangover. Not only were people not buying at the levels seen in Covid, but they weren’t even buying at pre-Covid levels. The reason was that much of the high sales growth was, in effect, the bringing forward of future purchases. The effect was that there would be a period of several years of depressed sales.
Markets are myopic. Having valued the company at over 1,800p in 2021, the shares fell to a low of 130p last year – a near 93% decline. Just as the share price extrapolated forwards the temporary phenomenon of lockdowns on Focusrite to unrealistically high levels, they are now extrapolating forwards the hangover. It too shall pass. Recent announcements from Focusrite seem to suggest that the business is returning to something more akin to its pre-Covid demand patterns. Should this persist then the shares look anomalously cheap with the current share price half the pre-Covid level despite a doubling of sales.
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