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Happy Sunday to everyone on The Street. 

Hope your new year is off to a hotter start than mine! Here in the Wild West, we’ve been snowed in for the better part of the week. And the market wasn’t much better prepared for the storm than I was. In other words, we’ve both been trapped in a holding pattern.

Investors are trying to decide how bad persistent inflation, a lack of Fed rate cuts, and Trump’s proposed tariffs will really be. And I’m trying to decide whether to venture to Home Depot to try and buy a snow shovel for a third time (they were sold out the first two) or hunker down for the next few months and wait for a thaw.

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Can This Sports Retailer Shake the Yips?

Losing Streak

Academy Sports & Outdoors (ASO) has been on a losing streak. The sporting-goods chain saw disappointing same-store sales in 2024 and its share price slid nearly 13% on the year. But it just might be time for an underdog arc.

The retailer soared after its IPO in 2020. Rapid store expansion and private-label products helped fuel its early success. But slowing sales and unflattering comparisons to rival Dick’s Sporting Goods (DICK), which had a massive 2024, have raised concerns about Academy’s future.

Barron’s believes those concerns are overblown.

Perfect Fit

Academy’s offerings might be a perfect fit for the economic moment.

Its value-oriented offerings could see a rise in demand if inflation does resurge, as some economists fear it might. At the same time, new brand partnerships like its recent deal with Nike could position it well in an era of prosperity, too.

Barron’s also expects Academy’s newly implemented customer-data platform and a rapidly growing loyalty program (set to hit 10 million members by year end) to drive sales and improve customer engagement.

Catch the Rebound

Academy’s stock trades at a low multiple compared to peers like Dick’s Sporting Goods. Its strong free cash flow, consistent margins, and ongoing share buybacks add to its appeal.

However, much like any struggling team, Academy has its share of doubters. Less than half of the 21 analysts tracked by FactSet have Buy ratings on the stock, and any delay in earnings recovery could keep shares under pressure.

But with low expectations already well-priced in, Academy has plenty of room to surprise on the upside. A rebound may be coming, and investors might want to be prepared to catch it.

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Healthcare Seems Headed for a Bounceback

In Poor Health

In recent months, the healthcare sector’s condition took a turn for the worse.

President-elect Donald Trump’s pick for US health secretary, Robert F. Kennedy Jr, is an outspoken vaccine skeptic. The prospect of his appointment sent investors into a panic. The sector’s biggest ETFs took a sharp hit and remain well below their 2024 highs.

But the prognosis might not be as grim as it seems. In fact, the phenomenon might create more opportunities than victims.

Natural Selection

Not all companies are on life support. Industry powerhouse Intuitive Surgical (ISRG) remains close to its all-time high. However, according to CappThesis’ Frank Cappelleri, it might not be close to its ceiling.

Cappelleri believes ISRG’s recent resilience could be an early sign of another breakout. The stock has seen a strong uptrend since bottoming last April, breaking out of two bullish formations in May.

Now, Cappelleri thinks it could be constructing another one, adding that if it breaches $550, its could trigger an upside target near $580. ISRG closed at $547.47 on Friday.

One key catalyst is its undeniable innovation. Intuitive’s cutting-edge surgical robots helped its stock soar more than 50% last year, and could buttress it from any potential storm on the horizon in 2025.

Resuscitation

The Wall Street Journal’s David Wainer suggests another way to play the trend. Companies like Pfizer (PFE) and CVS Health (CVS) are trading at historically depressed levels. But these companies still offer high dividends, Wainer says, not to mention sustainable business models.

He added that political pressures tend to have an outsized impact on the sector, since healthcare spending is nearly 20% of GDP. But historically, the industry tends to overreact to potential negative outcomes, and rebound when the realities turn out to be less severe.

With many Republicans already pushing back on RFK Jr’s presumed agenda, this scenario may well play out again. If it does, some observers believe that investors who buy the dip on proven commodities could see a big return.

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