Our trustworthy quartet of veteran investors are back for some suggestions for Business North Carolina’s annual stock-picking feature, after a solid showing last year.
Beating the market averages was challenging, with the S&P 500 and Nasdaq indices gaining more than 30% in the year ending Dec. 11.
But three stockpickers chose companies with gains exceeding 40% in that period. Bobby Edgerton hit it with Veeva Systems, Frank Jolley scored with Bank of America and RTX and Christy Phillips also selected RTX. Ann Zuraw’s best selection was Lowe’s, which gained about 30% over the 52 weeks. Only two of 12 picks were negative, compared with eight of 12 in the previous year.
For 2025, the investors made a diverse array of choices of companies based in North Carolina or having some operations here. Edgerton went conservative by recommending 30-year Apple bonds, and a hoped-for turnaround at Krispy Kreme Doughnuts. Jolley picked two strong dividend payers in Nutrien and UPS. Zuraw went heavy on healthcare with Pfizer and Iqvia, while Phillips recommended data center operator Core Systems, which is benefiting from the AI explosion.
Our three dartboard picks last year were each atrocious losers. So we asked one of our favorite office mates to make three selections.
Good luck investors in 2025!
BOBBY EDGERTON
co-founder
Capital Investment Companies
Raleigh
KRISPY KREME DOUGHNUTS (DNUT)
MARKET CAP – $1.69 BILLION
DIVIDEND YIELD: 1.4%
The Charlotte-based company is a rare stock trading near its 52-week low with a price-equity ratio of about 10, after being as high as 18. Shares are trading at their lowest level since KKD went public in 2021. It had EBITDA of $145 million in the past year on annual revenue of $1.7 billion. In July, it sold its majority stake in Insomnia Cookies for $172 million, retaining a 34% ownership. I once advised the CEO to stick to North Carolina, but he decided to go global.
APPLE BONDS (AAPL)
MARKET CAP – $3.8 TRILLION
DIVIDEND YIELD: N/A
I like Apple’s bonds which have a coupon rate of 2.65% and mature in 2051. The bonds with a $1,000 face value sold for $640, or 64 cents on the dollar in November, making the yield to maturity more than 4%. Bond interest is paid in May and November. This is the world’s safest bond issue ever, along with a similar offering from Walmart. It is a great choice for individuals and families wanting an incredibly safe source of income for the next 26 years.
INSTEEL (IIIN)
MARKET CAP – $582 million
DIVIDEND YIELD: 0.4%
This is a super well-run Mount Airy-based manufacturer of steel wire reinforcing products for concrete construction applications. The company paid a $1 per share special cash dividend in December, the fourth straight year it has made an extra payout. Chairman and CEO H.O. Woltz runs a debt-free ship with a cash balance averaging $100 million over the past two years.
FRANK JOLLEY
managing director and co-chief investment officer
Live Oak Private Wealth
Rocky Mount
NUTRIEN (NTR)
MARKET CAP: $23.7 billion
DIVIDEND YIELD 4.5%
Nutrien is a Canadian fertilizer company that operates the Aurora phosphate mine in Beaufort County. Shares have declined from a peak of $117 in 2022 and should offer excellent risk/reward at current prices. The shares trade at less than 13 times forward earnings, approximately 90% of book value and pay a 4.5% dividend. It is a good total return vehicle for the patient investor.
UPS (UPS)
MARKET CAP: $110.5 billion
DIVIDEND YIELD: 5%
UPS is the world’s largest integrated air and ground package delivery company. Shares are down approximately 43% from the 2021 peak levels and offer great value at 15 times 2025 estimated earnings. During the third quarter, UPS reported its first revenue and profit growth in two years. UPS’s dividend yield gives investors a very competitive current return.
THERMO FISHER SCIENTIFIC (TMO)
MARKET CAP: $205.2 BILLION
DIVIDEND YIELD: 0.3%
Thermo Fisher is a leading provider of analytical instruments and services for the life sciences, pharmaceutical and drug discovery industries. It bought Wilmington-based PPD in late 2021. Weakness in China, coupled with the runoff of COVID-19 related revenue, has been a drag on revenue growth the past couple of years. We would expect growth to accelerate over the next few years with shares generating attractive returns going forward.
CHRISTY PHILLIPS
head of equity strategies and director of research
Franklin Street Partners
Chapel Hill
MARTIN MARIETTE MATERIALS (MLM)
MARKET CAP: $34.4 billion
DIVIDEND YIELD: 0.6%
As one of the largest producers of crushed stone, sand and gravel, this Raleigh company is a long-term beneficiary of infrastructure, reshoring activities and data center build-outs. The combined demand should drive above-average growth for several years. Aggregates as a percentage of total sales is rising, which enhances overall margins and drives pricing throughout the business. The company essentially operates in a duopoly-like market. We believe investors will pay a premium in 2025 for domestic-oriented companies that benefit from the focus on US exceptionalism and aren’t hurt by potential tariff policies.
BRISTOL MYERS SQUIBB (BMY)
MARKET CAP: $116 billion
DIVIDEND YIELD: 4.2%
Bristol Myers has a strong portfolio of drugs and a robust pipeline focused on oncology, cardiology and neurology. These areas represent opportunities for strong pricing power. Opdivo transformed cancer treatment and has the potential to reach nearly $10 billion in sales. In neurology, the Cobenfy schizophrenia drug has the potential for a $5 billion franchise by 2033. We believe investors will return BMY to favor based on strong earnings generation capability, below-market valuation and a strong dividend yield.
CORE SCIENTIFIC (CORZ)
MARKET CAP: $4.4 billion
DIVIDEND YIELD: N/A
Bitcoin miners are emerging as attractive partners to build out data centers, and Core Scientific leads the AI data center co-hosting model. The company has a center in Cherokee County. It secured a 12-year $4.7 billion contract with Coreweave, which has a partnership with NVIDIA. We believe the AI revenue line provides a downside floor to the miners, with Bitcoin driving a cyclical upside. Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream.
ANN ZURAW
president
Zuraw Financial Advisors
Greensboro
AAR (AIR)
MARKET CAP – $2.4 BILLION
DIVIDEND YIELD: N/A
The Wood Dale, Illinois-based company generates significant revenue from its Aviation Services Segment, driven by strong demand from airlines for parts supply and aftermarket services. It has operations in Fayetteville and Havelock. Its acquisition of Triumph Group’s Product Support business for $725 million bolsters its repair capabilities and expands its presence in the Asia-Pacific region. With improving financial conditions from lower interest rates and increasing demand for airline services, AAR is well-positioned for sustained growth and market leadership.
PFIZER (PFE)
MARKET CAP – $143.3 BILLION
DIVIDEND YIELD: 6.6%
This pharma giant, which is a major North Carolina employer, has a diverse portfolio of products across various therapeutic areas, including oncology, immunology, cardiology and rare diseases. Some of its key drugs, such as Eliquis (a blood thinner) and Ibrance (for breast cancer), continue to generate significant revenue. It also has an extensive pipeline of potential drugs in development, while demand for COVID-19 vaccines and treatment will continue to decline. Patent expirations, regulatory hurdles and intense competition explain the depressed stock. But the stock appears undervalued, selling at an estimated 8.9 times price-to-earnings ratio and a dividend yield of 6.6% in early December.
IQVIA (IQV)
MARKET CAP – $36.5 BILLION
DIVIDEND YIELD: N/A
The Durham company is a leader in healthcare data analytics and contract research, benefiting from its strong market position, technological innovation and diversified revenue streams. Its advanced solutions, including AI, machine learning and cloud technologies, enable healthcare and pharmaceutical companies to optimize R&D, accelerate drug development and enhance patient outcomes. The company has stable cash flow and low debt. With demand driven by an aging population and more precision medicine, IQVIA is positioned to sustain robust growth.
OLIVER SWANEY
good boy
Davison
ADVANCE AUTO PARTS (AAP)
MARKET CAP: $2.6 billion
DIVIDEND YIELD: 2.4%
Oliver is a sucker for turnaround stories, so logically he picked a stock that has declined 30% in the past year and 76% over the past half-decade. It seems Advance has struggled to compete with stronger operators AutoZone and O’Reilly Auto Parts. But the Raleigh-based retailer’s CEO Shane O’Kelly is moving to fix the company, including closing 523 stores and four distribution centers and cutting ties with 204 independent locations. It expects full-year 2024 results to be at break even, with profit returning this year.
BIOCHRYST PHARMACEUTICALS(BCRX)
MARKET CAP: $1.5 billion
DIVIDEND YIELD: N/A
Who knew that Oliver understood the promise of this Durham-based company, which has investors excited about its Orladeyo oral drug to prevent hereditary angioedema, which typically involves the swelling of the face, hands or feet that blocks lungs or intestinal walls. Biochryst has lost more than $1.4 billion since 2010. But surging Orladeyo sales may push it into the black this year, some analysts predict. Shares are up 20% in the year ending Dec.16.
PREMIER (PINC)
MARKET CAP: $2.1 billion
DIVIDEND YIELD: 3.9%
Some day, we hope Oliver can explain what Premier does to achieve an expected $930 million to $1 billion in annual revenue. We know it is a leading healthcare analytics business that helps more than 4,350 hospitals and 325,000 other providers achieve purchasing savings. Beyond that, we’re perplexed. Anyway, he must like that Premier makes money, pays a solid dividend and may repurchase as much as $1 billion in shares. ■
