What school of investing do you belong to?
The three most popular schools are value (buying cheap stocks), growth (buying stocks whose earnings are growing fast) and momentum (buying stocks that are going up). I’d say that more than 90% of investors fall into one of these three camps (or a combination of them).
I used to scoff at momentum buying. I thought it was an approach for neophytes.
The numbers say otherwise. According to Standard & Poor’s, momentum stocks returned 27% in 2025, 46% in 2024 and 18% in 2023 (rounded to the nearest percent). Of the three major investing methods, momentum was the best performer in both of the past two years.
I’m a card-carrying value investor, and I have no intention of changing. But in recent years, I’ve started to think that it wouldn’t kill me to buy shares that show some momentum along with value.
Twice a year, I write about stocks that show both characteristics. Here are four new recommendations.
Fox
Fox Corp. (FOX), based in New York City and controlled by the Murdoch family, sold its entertainment operations to Walt Disney Co. in 2019. What it still has are news, sports and business coverage. It also owns the Tubi streaming service and 29 local television stations.
Fox shares are up 33% in the past year (through January) but sell for just under 15 times earnings.
Sports are particularly important for profits at Fox, because they are broadcast live, making it unlikely that viewers will be fast-forwarding through the commercials. Among the events Fox has the right to broadcast are the Super Bowl, the World Series and World Cup Soccer.
Great Lakes
A midsized stock that looks intriguing is Great Lakes Dredge & Dock Corp. (GLDD), based in Houston. It has a $1.1 billion backlog, which is interesting because that exceeds the company’s revenue for the past four quarters (about $835 million) and the stock’s market value (about $1 billion).
Great Lakes stock is up about 38% in the past year, and the stock is moderately priced at about 13 times earnings. Wall Street mostly ignores the company. Only five analysts cover it, but all five rate it a “buy.”
Build-a-Bear
A small stock I like is Build-a-Bear Workshop Inc. (BBW), which has its headquarters in St. Louis. Build-a-Bear
has more than 500 shops in malls and other locations. Children can choose an animal or character and stuff it using a special machine.
When my kids were young, they went to Build-a-Bear shops several times and enjoyed it.
In recent years, Build-a-Bear has expanded its internet sales, movie tie-ins and presence in non-mall locations such as cruise ships. The stock is up 50% in the past year, and sells for about 14 times earnings.
ASA Gold
Very cheap, and quite speculative is ASA Gold and Precious Metals Ltd. (ASA), out of Portland, Maine. It’s a closed-end
investment fund that invests mainly in gold mining companies.
Closed-end funds are investment companies similar to mutual funds. But they trade like an ordinary stock, and their price may be less or more than the net value of their holdings.
It may seem weird for me to mention a gold fund right after gold experienced its biggest daily decline since the early 1980s. ASA fell more than 10% on January 30. But it has more than doubled in the past year and sells for only five times earnings.
Safe? No. But I think gold and gold miners are likely to show gains over the coming 12 months because of big government deficits, a falling dollar and high international tensions.
Performance
Beginning in 2000, I’ve written 48 columns (including today’s) on stocks that show both value and momentum. One-year returns can be calculated for 46 columns.
The average one-year return has been 13.4%, beating the 11.0% average return on the Standard & Poor’s 500 Total Return Index.
My picks from a year ago rose a brisk 61%, versus 17.2% for the index. The best gains were 149% in Century Aluminum Co. (CENX) and 92% in REV Group Inc. (REVG). The sole loser was CalMaine Foods Inc. (CALM), down 15%.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Disclosure: I own Build-a-Bear in a hedge fund I run. I own Cal-Maine Foods personally and for most of my clients. Katharine Davidge, my wife and a portfolio manager at my firm, owns Fox for herself and some of her clients.
John Dorfman is chairman of Dorfman Value Investments in Boston. His firm or clients may own or trade the stocks discussed here. He can be reached at jdorfman@dorfmanvalue.com.
