Key Concepts
- Value Investing: Focusing on stocks trading below their intrinsic value, often with strong fundamentals but currently out of favor.
- Growth Stocks: Companies expected to grow at a significantly faster rate than the overall market.
- Mag 7: The seven largest US technology companies (Alphabet/Google, Apple, Amazon, Meta, Microsoft, Nvidia, Tesla).
- Net Asset Value (NAV): The value of a company’s assets minus its liabilities.
- Dividend Yield: The annual dividend payment as a percentage of the stock price.
- P/E Ratio (Price-to-Earnings Ratio): A valuation ratio comparing a company’s stock price to its earnings per share.
- Stock Compensation: Paying employees with company stock.
- GLP-1 Drugs: A class of drugs used for weight loss and diabetes management.
- Fixed Wireless: A type of broadband internet access delivered via wireless signals.
- Parlays & Prop Bets: Types of wagers in sports betting.
- Compounder: A company that consistently grows its earnings over time.
Andrew Barry’s Top 10 Stock Picks for 2026
Introduction & 2025 Performance
Andrew Barry, Barons’ associate editor, presented his top 10 stock picks for 2026. His 2025 picks achieved a total return of 28%, exceeding the S&P 500’s 15% return by over 10 percentage points. He emphasized that stock picking is a humbling game, acknowledging a less successful 2024. His approach is generally value-oriented, but includes some growth stocks that underperformed in 2025, believing quality companies lagging the market present opportunities. He aims for a fresh list each year, minimizing overlap with previous selections due to changing valuations.
The Picks – Detailed Analysis
1. Amazon (AMZN): Despite being the worst-performing Mag 7 stock in 2025, trading around $220, Amazon is considered undervalued. Concerns around Amazon Web Services (AWS) slowdown and consumer health are offset by its reasonable valuation (under 30x 2026 earnings, below Walmart & Costco), strong growth potential, and dominant franchises in e-commerce (40%+ US market share) and cloud computing (AWS). Other businesses like advertising ($75B revenue, high margin) and satellite communication (potential Starlink competitor) add to its appeal.
2. Bristol Myers Squibb (BMY): The pharmaceutical industry experienced a “haves and have-nots” dynamic in 2025, with Bristol Myers falling into the latter category. Despite facing pipeline concerns and patent expirations, the stock trades cheaply with a nearly 5% dividend yield and a PE ratio under 10. Barry believes its pipeline is underappreciated, particularly a potential Alzheimer’s drug, and the stock is showing early momentum. The pick was also recommended by Baron’s Investor Circle.
3. Comcast (CMCS): Despite facing headwinds from increased competition in broadband from fiber optic providers like AT&T and fixed wireless from T-Mobile, Comcast is considered cheap, trading around $28-$29 with a nearly 5% dividend and a low PE ratio (around 6x 2026 earnings). Potential catalysts include a possible spin-off of its media and entertainment business (NBCUniversal), a potential merger with Paramount (if Paramount loses the Netflix bid), or activist investor pressure given the Roberts family’s limited economic stake (around 1%).
4. ExxonMobil (XOM): Despite weak oil prices (under $60/barrel, down 15-20%), ExxonMobil is highlighted as the best company in the oil industry, boasting a strong balance sheet, management, production, and diversification. Trading around 15x forward earnings with a 3% dividend yield, it’s considered a conservative play with potential for increased production in the Permian Basin and off the coast of Guyana. Barry is a fan of the oil patch and the show "Land Man," acknowledging Exxon and Chevron’s more disciplined approach to exploration.
5. Fairfax Financial Holdings (FRF HF): Described as a “mini Berkshire Hathaway,” Fairfax is a Canadian insurance and investment company founded by Prem Watsa. It has a strong long-term track record, aiming for 15% book value growth. The stock is currently trading mostly in Canada, with limited US-listed shares. Investments include Indian fintech companies and ownership of the Bangalore airport. A former Berkshire Hathaway executive is involved in the company.
6. Flutter Entertainment (FLUT): The leading online sports gambling company globally, owning FanDuel (the US market leader). Despite competition from prediction markets like Cal Poly Markets, Flutter’s expertise in parlays and prop bets provides a competitive advantage. The stock is trading at 20x 2026 earnings with 40% earnings growth. A US listing could lead to inclusion in the S&P 500.
7. Madison Square Garden Sports (MSGS): Owning the New York Knicks and New York Rangers, MSGS is considered cheap despite concerns about the Dolan family’s control and lack of a sale. The Knicks alone are estimated to be worth $10 billion, and the Rangers $3-4 billion, significantly exceeding MSGS’s $5 billion market cap. Potential catalysts include a team split, partial team sales, or activist investor involvement.
8. SL Green Realty (SLG): The leading commercial property owner in Manhattan, SL Green is out of favor due to concerns about New York City’s new mayor and the commercial real estate market. Trading in the mid-$40s with a dividend yield over 5%, it’s considered undervalued, with a net asset value potentially exceeding $70 per share.
9. Visa (V): A dominant player in payments processing, Visa is a “compounder” with consistent earnings growth. Despite recent pressure from stablecoins and buy-now-pay-later services, its high margins and the continued shift to plastic payments make it a compelling investment. Trading at 25-30x earnings, its growth rate justifies the valuation.
10. Disney (DIS): Despite flat stock performance in 2025 and concerns about rising prices at Disney World, Disney is considered undervalued relative to Netflix. Trading around $110 with projected 10% earnings growth, potential catalysts include the Warner Brothers takeover battle and the upcoming departure of CEO Bob Iger at the end of 2026.
Overall Strategy & Market Outlook
Barry’s 2026 picks lean towards value, but also include special situations. He emphasizes identifying opportunities where quality companies are currently out of favor. He believes the market is pricing in too much negativity in certain sectors, creating buying opportunities. He highlighted the importance of considering potential catalysts that could unlock value in these companies.
Conclusion
Andrew Barry’s 2026 stock picks represent a blend of value and potential, focusing on companies with strong fundamentals trading at attractive valuations. He emphasizes a long-term perspective and the importance of identifying opportunities overlooked by the market. The list provides a diverse range of investment ideas across various sectors, offering potential for significant returns in the coming year.
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