Buy Hold Sell: 5 dogs of 2024 tipped to rebound in 2025

The end of the year naturally brings a time of reflection. We collectively get a moment to breathe and reflect on our family, friends, and careers.

For those who play Mr. Market's game, we also invariably run a critical eye over our portfolios and make some decisions on what to keep and what to turf out like four-day-old Christmas leftovers.

Shedding the duds also means hunting for new opportunities and while piling into the top 10 best performers from this year is always tempting, there are probably some equal, if not better opportunities to be had in the downtrodden. 

With that in mind, Hans Lee presents this latest episode of Buy Hold Sell. Joining Hans are Henry Jennings from Marcus Today and Hugh Dive from Atlas Funds Management who will be rummaging through the equity bargain bin like someone who camps out for the Boxing Day sales. Will they find any unloved gems?

As a bonus, Henry and Hugh each nominate a stock they think is set to get going in 2025. 

Note: This episode was recorded on Wednesday 4 December 2024. You can watch the video, listen to the podcast or read an edited transcript below.

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Edited Transcript

Hans Lee: Hello and welcome to Livewire’s Buy Hold Sell. I'm Hans Lee, and today we are hunting for opportunities among some of 2024's worst performers. Are there any bargains to be had or are they dogs for a reason? To do that, we're joined by Hugh Dive from Atlas Funds Management and Henry Jennings from Marcus Today. Let's get to it. First up, we have Neuren Pharmaceuticals. It has increased its market value by almost six times in five years after successfully bringing to market a drug called Daybue to treat the cognitive disorder, Rett syndrome. Henry, I get to start with you on this one. Is it a buy, hold, or sell?

Neuren Pharmaceuticals (ASX: NEU)

Henry Jennings (BUY): For me, it is a buy - still a buy. It has been an interesting story to say the least. It did have a huge run on the back of the cash pulling through to the bottom line after they did the deal with Daybue. But Acadia, which is their partner in the US, came under some pressure from a Hindenburg report that knocked them quite hard and they've struggled. Next year they have a new drug which has even more promise than Daybue, in NNZ-2591. A catchy title, I know.

Hans Lee: They thought really long about that name.

Henry Jennings: Didn't they. They all do. They're all the same. And I think we should get some pretty good news out of that. And also there's the worldwide expansion of Daybue as well, which I think is to come.

Hans Lee: Okay. Hugh, while the share price has gone up six times in five years, it's almost halved since January from $25 to 13. Is it a buy-hold-sell for you?

Hugh Dive (HOLD): Soft-hold. Henry, you must have rubber underpants as you'd need them to own this stock going from $9, to $23 and back to $13.

It treats a very small particular disease, which afflicts one in 10,000 females. They've done a great job in terms of monetizing that. There's a lot of cash on the balance sheet, but a lot of those royalty cash flows are going to develop the new drug. If the new drug doesn't work, there's no dividends, but just the volatility scares me.

Viva Energy Group (ASX: VEA)

Hans Lee: Yeah, absolutely. So soft-hold for you there - that's a new term for all of us. Next up we're talking about Viva Energy Group. It was established in 2014 and Viva is an energy company providing fuels and energy solutions across the nation. It also operates an extensive retail network. Hugh, is it a buy-hold-or-sell for you?

Hugh Dive (SELL): It's a sell for us. We like the thematic. We own Ampol in the portfolio, but this is the poor man's Ampol. Ultimately it's got a lot more debt. They've taken a lot of debt to take on OTR, and they have been investing in different areas. Ampol is investing a little bit more in their fast chargers where you can pay 40 bucks to charge your EV. It's a much better network, but they both benefit from being the last two refiners in Australia. So they get the government largesse to be effectively a subsidy to remain in power, remain going. Quite like the thematic, but Ampol is a better quality company with lower debt and better network.

Hans Lee: Fair enough. Henry, the year-to-date return for VEA - minus 25%. Is it a buy, hold, or sell for you?

Henry Jennings (HOLD): I think it's a hold. I think the chance to sell it has probably gone at the moment and they are integrating their OTR business. They’ve seen lower tobacco sales. I guess there's a lot of illegal tobacco sales being affected at the moment and we've seen that down in Melbourne with some of those fires at tobacconists - I'm sure it has some connection. So I think as they bed down that acquisition, and they do have that government support there, as Hugh says, there are only two refineries left, so they are in that dominant position. They have been beaten up and maybe they can get back on track. So I think the chance to sell has gone. If you've still got it, I think you hold it for 2025 and hopefully better times ahead.

Paladin Energy (ASX: PDN)

Hans Lee: Yeah, absolutely. All right. Well we'll move away from the cigarettes, but we will stay in the energy space but with a different angle. We're talking uranium miners and specifically Paladin Energy. Uranium enjoyed somewhat of a renaissance this year. Henry, is it a buy, hold, or sell for you?

Henry Jennings (BUY): It's a buy for me. It's an interesting one. It's got the largest short position in the market now. It's taken that title from Pilbara recently, which is quite astonishing. I think around 15% of that one is shorted now. At the moment, it's trying to make an acquisition in Canada of Fission Corp, which unfortunately has gone to the Canadian equivalent of FIRB, which has not helped the short position, I suspect. But for me, uranium is one of those metals that actually has a good supply/demand equation in its favour, as opposed to many of the other metals. So I think we're going to see a renaissance in uranium. I wouldn't be surprised to see Donald Trump push nuclear power a little bit harder as well. And that should benefit the spot price, and maybe they can get through the production problems of Langer Heinrich, which they're eight to nine months into a 21-month ramp-up of that project.

Hans Lee: Okay, Hugh… Paladin is another one that's taken its lumps this year, down around 21% year-to-date. What do you say, buy, hold, or sell?

Hugh Dive (SELL): No nukes for this investor, and more just based on the mine. The mine was shut from 2018 to 2024 and they've got one mine. They had production issues, they promised a big game and haven't delivered the Fission acquisition in Canada. It is just bizarre why they would do that. They've got so much on their plate. Get Langer Heinrich back up and creating before you're going off buying projects in Canada. It's too much going on. Try to fix what you can.

Hans Lee: No nukes. Just another way for you to say sell?

Hugh Dive: Sell.

Guest picks

Hans Lee: Thank you very much. Now comes the time of the show where we ask the guests to bring along their stock picks. Here, we've asked Hugh and Henry to name a beaten up stock they think could get going in 2025. Hugh, I'm going to come to you first and your pick has been in the news of late, to put it politely, it's down around 48% year to date. What is it?

Mineral Resources (ASX: MIN)

Hugh Dive: Mineral Resources. It's sold a lot of copies of the AFR this year.

Hans Lee: I think so – it’s between that and WiseTech, for number one.

Hugh Dive: Yeah, they were battling each other out, but it's been a terrible year. We've had the falling lithium price issues with the debt, and then also the main issues with the founder. They've been in the naughty corner and rightly so, a lot of governance issues. But whilst Chris Ellison is in the naughty corner, he's actually done some good things for shareholders selling the haulage road to Onslow for $1.3 billion to Morgan Stanley. Selling the gas assets to Gina Rinehart, which looked to be a very good deal. So whilst he's been naughty, he's been nice for shareholders.

Looking ahead, it is very heavily beaten up. There is improving sentiment in the lithium market. The mine has come back online, the historic issues start to fade. I think there's a good chance for a rebound. It's the highest quality of the lithium stocks. And you’ve got the mining services, iron ore, and a bit of gas on top of that.

Hans Lee: Okay Henry. What's one beaten-up stock you think is setting up for a big '25?

Web Travel Group (ASX: WEB)

Henry Jennings: Web Travel is my stock. W-E-B is the stock code. Not to be confused with Webjet, W-J-L. Web travel is the B2B business, the WebBeds business. It's another Humpty Dumpty stock if you like, because they pushed Humpty off the wall and they de-merged the two. And that's always distracting for management. They can make missteps, there's a lot of egos at plays, who goes where, etc. So I think that's been a distraction. Also, we had the Paris Olympics this year, which affected hotel bed prices, which affected their margins. That is behind it. And we had the Euros as well where England didn't do as well as we should, but that's a point that we should discuss at another time. But I think WEB has got potential. It has found a bit of a bottom and I think it's got potential to bounce in 2025.

Hans Lee: Well, all three of us are off to the football pitch now. That’s all we've got time for today. We hope you enjoyed that episode of Buy Hold Sell. If you did, why don't you give it a Like and subscribe to our YouTube channels and the Livewire website as well, where we are adding great content every single week. Take care. We'll see you next Friday for more Buy Hold Sell.