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No one really knows where UK shares will go in 2025. However, I see some tempting value stocks for bullish investors who should consider adding them to their portfolios now in the hope that markets have a great year.
The recovery continues!
Luxury watch seller Watches from Switzerland (LSE: WOSG) is one example of a stock that appears poised for a robust rebound. In fact, you could say that the recovery has already begun. After a hard few years due to the cost of living crisis, the stock is up 34% in the last month alone!
This momentum was undoubtedly helped by some reassuring half-year results in early December. The management board recorded a 4% augment in revenues thanks to “encouraging improvement in trade in the second quarter“, partly attributed to better demand in the UK and US.
There is still time to consider purchasing
I think there may be even greater potential ahead of us, especially since the company’s share price is still trading at a price-to-earnings (P/E) ratio of 14. This is not as low as a few months ago, but below the company’s average P/E with 19 in the last five years. Nor does it seem particularly excessive if (and that’s a mighty “if”) the British economy holds up next year.
Whether this will happen is debatable. If inflation rebounds, the Watches of Switzerland share price will likely move sideways at best. There is also no dividend stream to compensate investors for staying in business.
However, if inflation returns to the Bank of England’s target of 2%, we could expect further interest rate cuts. This should then translate into improved consumer confidence, which could lead to an augment in profits for the Leicester-based company.
Cheap as dirt
FTSE100 member JD sports fashion (LSE: JD) is another company that I think offers great value. Its forecast P/E ratio for 2026 (starting in February) is at a devastatingly low level of seven. Again, this looks very attractive considering the company’s five-year average is no less than 20!
This is not to say that the £5 billion ceiling does not currently face many challenges. For example, one of the main brands it sells – an American giant Nike — is having a terrible year, as are its smaller, inventive rivals ON AND Disappointed took over market shares.
Growth abroad
But can the above be considered a long-term problem? I’m skeptical, especially if Nike’s recent(ish) CEO, Elliott Hill, keeps his promise to revive the business. Overall, the future of the global sportswear market looks solid.
In fact, JD Sports looks particularly well-equipped to weather any storm thanks to its multi-brand, multi-channel offering and rapid expansion abroad. Earlier this year, it acquired US rival Hibbett as part of a strategy to expand its reach across the pond.
I also think it’s quite encouraging that there appears to be very little interest in the company from miniature sellers. In other words, few traders seem willing to take the risk that the stock price will fall further.
Buying stocks when no one else will can be profitable in the long run. While there is a risk of things getting off to a bad start if the January Q4 trading update fails to impress, that may be the case here.