Press Release: Madison Square Garden Sports Corp. To Host Fiscal 2026 Second Quarter Conference Call

By Ben Levisohn

As it turns out, a little chaos can be very good for stock-picking.

For investors, last year will be remembered for Trump's Liberation Day selloff and the massive rally back from the brink; for DeepSeek's challenge to the dominant artificial-intelligence companies; and gold's continued rally in what was either a search for a haven or the ultimate risk-on trade. In other words, it was a mess.

But with the dominant themes being challenged, last year wasn't all about Big Tech. And that meant that Barron's stockpickers stood a fighting chance when it came to beating the market. And beat it they did, with the average Barron's pick last year gaining 10.4% from the time we recommended it to the end of the year, outperforming the average benchmark gain of 9.2% over the same periods.

Many of our best picks resulted from a willingness to go against the grain with out-of-favor stocks — and impeccable timing. We recommended buying Dollar General on Jan. 31, 2025, when it was near its lowest level in more than six years, arguing that the company's problems were more than reflected in the price. Shares gained 87% through the end of 2025, easily beating the S&P 500's 14% rise over the corresponding period. Similarly, we recommended buying Paramount Skydance on Aug. 8, immediately after the completion of its merger, a moment that was portrayed as hopeless for the newly combined company. Instead, shares climbed 28%, beating the benchmark's 7.7% rise.

We also managed to turn the so-called Dolan discount into a premium. James Dolan, of Madison Square Garden Sports and other MSG companies, has never been known as the most shareholder-friendly of owners, resulting in many of his companies underperforming. Last year bucked that trend. Barron's recommended buying Sphere Entertainment, which operates a high-tech theater in Las Vegas, on May 9, arguing that its success would lead to more Spheres globally. The stock gained 193%, beating the S&P 500's 24%.

But Sphere wasn't the only Dolan property to outperform in 2025. Madison Square Garden Sports, owner of the New York Knicks and Rangers, gained 20% after we recommended it on Sept. 19, outpacing the benchmark's 0.3% rise over the same period, as billion-dollar deals for teams like the Boston Celtics and Los Angeles Lakers pushed the stock higher.

We even managed to capitalize on volatility in the AI trade. When DeepSeek, a Chinese AI company, announced results that caused a selloff in everything connected to artificial intelligence, we recommended scooping up shares of Amphenol on the dip. The maker of connectors, cables, and other electrical components is the proverbial picks-and-shovels play, and as the AI trade rebounded, so did Amphenol. Its stock rose 96% after we recommended it on Jan. 29, besting the S&P 500's 15% rise. Another AI play, Arista Networks, gained 38% after we recommended it on June 5, outpacing the index's 16% increase.

Other winners included cruise-line operator Viking Holdings, which gained 61% to the benchmark's 11%; Innodata, which rose 39% against its benchmark's 6.1% rise; and miner Newmont, which rose 46% as gold prices surged, beating the S&P 500's 6.7%.

We had our fair share of stinkers. In the cases of Pinterest and Phreesia — two of our worst picks, with declines of 25% and 38%, respectively — our bull cases simply proved to be, well, too bullish. Others suffered from bad timing, such as when we recommended buying Dell Technologies and Netflix after both stocks had gone on serious runs and were trading at premium valuations. In the case of pet-food purveyor Freshpet — our worst pick, with a decline of 54% — we not only misunderstood the company's moat but got the timing wrong, too.

Still, we feel pretty good about our performance. Even with just two of the Magnificent Seven outperforming the S&P 500 last year, it was still a tough year for stockpickers, with just 152 stocks in the benchmark, or about 30%, outperforming the index. Against that backdrop, our 44% success rate looks pretty decent, as does our outperformance.

With more mayhem on the docket in 2026, we'll aim to be even better.

Write to Ben Levisohn at ben.levisohn@barrons.com

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