Chicago, IL – December 19, 2024 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2385486/what-stocks-should-you-buy-in-2025
Welcome to Episode #427 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is joined by John Blank, Zacks Chief Equity Strategist, to discuss their annual December topic: is the US economy in a recession or about to go into one?
Recessions aren’t defined by the number of foreclosures or people not paying on their auto loans. No, there is a far more simpler definition which includes looking at employment.
As usual, Tracey and John take a deeper dive into the employment data to look for the real clues.
But they also discussed stocks. Small caps, mids, or big caps for 2025?
1. American Airlines Group Inc. AAL
American Airlines is riding a strong wave of travel heading into 2025. Earnings are expected to rebound in 2025, with the Zacks Consensus looking for a jump of 30.6%.
Shares of American Airlines are cheap. It trades with a forward price-to-earnings (P/E) ratio of just 10. A P/E under 15 is usually considered a value stock. American Airlines also has a PEG ratio of just 0.3. A PEG ratio under 1.0 usually indicates a company has both growth and value. That’s a rare combination.
Should an airline like American Airlines be on your short list for 2025?
2. MKS Instruments, Inc. MKSI
MKS Instruments is a global provider of enabling technologies. It’s a mid-cap company with a market cap of $7.4 billion. Earnings are expected to rise 42.9% in 2024 and another 18.2% in 2025.
MKS Instruments is a Zacks Rank #2 (Buy) stock. It has an attractive PEG ratio of just 0.7. A PEG ratio under 1.0 indicates a company has both value and growth. MKS Instruments also has a forward P/E of just 17.5. That’s above 15, which indicates value, but is below the average for the S&P 500 of 22.
Should a mid-cap like MKS Instruments be on your short list?
3. Royal Caribbean Cruises Ltd RCL
Royal Caribbean operates cruises around the world. It is a big cap company with a market cap of $65 billion. Earnings have jumped on strong demand. 2024 earnings are expected to be up 72.1% with another 24% earnings growth in 2025.
Royal Caribbean is a Zacks Rank #2 (Buy) stock. It’s still attractively priced even though its trading near its all-time highs. Royal Caribbean has a PEG ratio of just 0.6. A PEG ratio under 1.0 indicates it has both growth and value.
Should a cruise operator like Royal Caribbean be on your short list for 2025?
4. Amazon.com Inc. AMZN
Nothing says “big cap” more than Amazon.com, one of the Magnificent 7 stocks, with a market cap of $2.4 trillion. The marketplace, grocer and cloud provider is expected to grow earnings by 79% this year and another 19.9% next year.
Amazon.com is a Zacks Rank #2 (Buy) stock. It’s attractively valued despite trading at new highs. It has a PEG ratio of just 1.6 and a price-to-sales ratio of 3.9, which is the lowest of the Magnificent 7 stocks.
Is there still time to buy some Amazon.com in 2025?
5. Ryder System, Inc. R
Ryder System is a logistics and transportation company. It’s a mid-cap company with a market cap of $6.8 billion. While earnings are expected to decline 7.3% this year while freight remains in a recession, they are forecast to rise 16% in 2025.
Ryder System is cheap. It has a forward P/E of just 13.7. Stocks with P/Es under 15 are usually considered value stocks. Ryder System also has a Zacks Style Score of A, the highest rating, for VGM.
Should a transportation company like Ryder System be on your short list for 2025?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of AMZN in her personal portfolio and RCL and R in her Insider Trader and Value Investor portfolios.]
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