By Lauren R. Rublin

From the drums of war to the Board of Peace, 2026 is off to a dramatic start. Just ask Greenland, which nearly became the seventh New England state.

Wall Street, though far from Nuuk, has had its share of drama, too. Long-dormant small-cap stocks have awakened and roared to life this year, sending the Russell 2000 small-cap index up more than 9% in just three weeks. Meanwhile, large-cap tech stocks, so beloved for the past three years, suddenly can't get a bid. Perhaps the only 2025 investment trend still intact is the mighty rally in gold, which has gained 13% in price since Jan. 1 as more investors seek a haven from chaos, real or imagined.

As the winds of change blow, the members of the Barron's Roundtable do what they have always done best: stay focused on the search for investment bargains. Our third and final report from the 2026 Roundtable, held Jan. 5 in New York, highlights 30 stocks favored by our four remaining panelists: Gabelli Funds' Mario Gabelli, GQG Partners' Rajiv Jain, Delphi Management's Scott Black, and Abby Joseph Cohen, a longtime Goldman Sachs strategist who is now a professor of business at Columbia University's Graduate School of Business.

If there is a theme to this latest list of picks, which includes U.S. and international issues, it is a focus on undervalued industry sectors such as utilities, energy, and consumer staples, and businesses that can help themselves, whether through more investment or transformative deals. That seems just the ticket these days, whether you're a company or a country.

Read on for the edited details.

Barron's: Mario, which stocks excite you most this year?

Mario Gabelli: I'll start with live entertainment and sports. On Thanksgiving weekend, 55 million-plus people watched the Kansas City Chiefs versus Dallas Cowboys football game. The Super Bowl is coming up, and this summer we'll have the soccer World Cup. My point is, a lot of money is spent on experiences and live sports. My first stock is Atlanta Braves Holdings. The ticker is BATRA.

You have been saying that for a while.

Gabelli: The 10.3 million A shares are selling for $42.50. There are 51 million nonvoting shares. John Malone owns most of the roughly one million supervoting B shares, and has 49% of the voting stock. A change is coming to Section 162(m) of the tax code that will limit tax deductions taken by public companies on compensation of more than $1 million paid not only to named executive officers but the five other highest-paid employees. Management will have to figure that out.

After renewal of the collective bargaining agreement with the Braves this year, we believe the company will be sold. We think the Braves will fetch more than $60 a share in a deal that also includes the real estate around the stadium.

What's your second?

Gabelli: Next, let's talk about Madison Square Garden Sports. The New York Knicks were recently valued at around $10 billion by Forbes, and the Rangers, at around $4 billion. Divide the total by 24.1 million shares and you have a $500-a-share stock, which currently trades for $250. The CEO, James Dolan, who owns all of the 4.5 million B shares and has 71% of the vote, could sell a piece of the company and use the money to buy back stock, and he doesn't have to sell the teams to realize a higher valuation.

My next name, Manchester United, is listed on the New York Stock Exchange. The company has 174 million shares, and closed Friday [Jan. 2] at $15.78. Sir Jim Ratcliffe bought what is now a 29% stake in 2024 from the controlling Glazer family. He paid $33 a share. If the Glazers sell the company within three years at a lower price, he'll get his money back. If they sell at a higher price, everyone will do well. That deal expires in February 2027. We think something will happen. There is enormous global interest in soccer.

Something as in, a sale of the company at a higher price?

Gabelli: Yes. The team's stadium requires capital. No detailed financing structure has been disclosed for the new stadium beyond the statement that it will be "privately funded." But we think investors could double their money in 2 1/2 years when the Glazers are willing to sell the company. They own 50% and control the voting stock.

We have owned Grupo Televisa, the Spanish-language broadcaster, for a while. The company spun off Ollamani, its sports and gaming business, in 2024. Ollamani trades on the Mexican stock exchange and has American depositary receipts selling for $4.40. There are 145 million shares. Ollamani just formed a partnership with General Atlantic to own the soccer team Club America and its stadium in Mexico City and adjacent land. Bob Kraft's Kraft Analytics Group is also part of the deal. This is an example of interest in sports teams. As illustrated by this and other recent transactions involving The Los Angeles Lakers and New York Giants, sports are hot and increasingly interesting to institutional investors.

Rogers Communications trades at around $38 a share and there are 540 million shares. About 111 million of the voting A shares are mostly in the family name. Rogers provides telecom and cable service in Canada, and owns 75% of Maple Leaf Sports & Entertainment, which owns the Toronto Blue Jays, Maple Leafs, Raptors, and other assets. The company has publicly expressed an interest in buying the other 25% of MLSE.

We think investors would do well to buy a basket of publicly traded sports teams and related assets, including through Rogers. Why would I have my clients take a limited-partnership interest in private-equity-backed sports investments? They would pay substantial fees, have no liquidity, and no apparent exit strategy. To my mind, you can buy shares in the public companies I recommended and create your own sports portfolio.

So, how do I watch sports?

You tell us.

Gabelli: There is a company named Fox, which you might know. [Fox and News Corp, Barron's owner, share common ownership.] The voting stock is trading for $65. There are 440 million shares, of which 235 million are voting. The Murdoch family controls 43% of the vote. Fox recently launched a $1.5 billion ASR, or accelerated stock repurchase program, buying back $700 million of the nonvoting shares and $800 million of the voting stock. The repurchase program is expected to be completed during the second half of fiscal 2026, which ends in June.

Earnings in fiscal 2025 benefited from advertising during an election year. The ad market remains solid for live sports and news, in line with Fox's core business focus areas. Fox's sports assets have key nights like NFL [National Football League games] and MLB [Major League Baseball games]. Fox has low leverage, along with the buyback, sports-betting assets, a tax shield, and a studio lot in Los Angeles. Fox won't have elections as a driver of earnings in the current fiscal year, but it has the televised rights to the World Cup. I have recommended Fox before, and still like it. I recommend buying the voting stock.

Versant Media Group was spun off today [Jan. 5] from Comcast. It is another media name we like. Because it isn't in the S&P 500, index funds had to sell it, and the stock immediately dropped by about $7 a share. There could be more selling this week. We are buying the shares into continued weakness.

Versant has roughly 145 million shares and $2.5 billion of net debt. It is going to earn more than $2 billion of Ebitda [earnings before interest, taxes, depreciation, and amortization] this year. We like the CEO, Mark Lazarus. The company owns cable networks and digital properties. It produces sports programming and owns CNBC. Versant will pay down debt within two years and generate a lot of cash.

Next, I'm going to pivot to utilities. I have recommended National Fuel Gas previously. It is based in Buffalo, N.Y. The company has about 95 million shares outstanding, and the stock is selling for $81 a share. NFG pays an annual dividend of $2.14 a share.

The regulatory backdrop in states such as New York, California, and Hawaii is challenging at times. Heaven is states like Indiana, which David discussed [in the second Roundtable installment]. Pennsylvania is also positive. NFG has roughly 750,000 customers in western New York and northwest Pennsylvania. It is buying a gas distributor business in western Ohio for $2.6 billion from CenterPoint Energy, which David also recommended earlier today. NFG management is conservative, and sold some stock in advance to pay for the equity portion of the deal.

Why do you still like the company, and the stock?

Gabelli: There are two reasons. National Fuel Gas owns roughly 1.2 million acres in the Appalachian Basin, with substantial mineral ownership overlying the Marcellus and Utica shales. About 33% of U.S. gas comes from Appalachia. Natural gas provides 40% of the electric power used in the U.S. The value of gas reserves strategically located near population centers is unappreciated. NFG can use increasing levels of free cash flow to invest in the regulated utility business or split up the company.

NFG is expected to earn around $7 a share in this fiscal year. It could earn $9 a share the following year. We put the company's private market value at 50% higher than the current price. If analysts who follow utility stocks put a 16 multiple on NFG's pro forma utility earnings, the stock will trade even higher.

Now, I have two stocks that I put in the dumpster category. They are down sharply from their highs. Albany International was selling for $52.34 on Jan. 2. It is $55 today. There are 28.7 million shares. The stock jumped on the U.S. capture of Venezuelan President Nicolás Maduro because of its inclusion in commercial aviation and defense portfolios.

What does Albany make?

Gabelli: It has two businesses. The Machine Clothing business primarily supports the production of paper, paperboard, tissue, towel, and pulp, and engineered fabrics for non-paper industries. The Albany Engineered Composites business supplies composite parts for the aerospace industry. It makes composite blades, which are a lighter alternative to titanium. Safran Aircraft Engines owns 10% of that Albany segment via its CFM partnership with GE Aerospace. It supplies critical lightweight composite front-end parts and other parts and services for the LEAP engine family.

In October 2025, Albany International announced it was exploring "strategic alternatives" for its structures assembly business, which includes a potential exit from its contract for Lockheed Martin's CH-53K King Stallion heavy-lift helicopter program. Once that happens, it will split the company into two separate businesses. A tax-free spin could allow the company to unlock value by separating the mature paper-industry-focused business from the high-growth engineered composites segment, enabling focused capital allocation and eventually an acquisition by a strategic aerospace and defense company such as Hexcel.

Albany will earn $4-and-change this year, going to $6 a share in the next few years. We value the MC business at $62 a share, and you get the AEC business for free. The stock market is hitting all-time highs, and this stock is down 33% from its annual high.

My last recommendation is Advance Auto Parts, an auto parts retailer and distributor. Four major companies control half the business: AutoZone, O'Reilly Automotive, Genuine Parts, and Advance Auto. Advance has roughly 4,300 stores in the U.S. and Canada. The stock is trading for around $40 a share, and the company will have $8.5 billion in revenue this year.

Advance took on significant inventory, which has improved its ability to deliver parts. But LIFO [last-in, first-out] accounting has been a drag on profits margins because the most recently purchased inventory -- which has been more expensive due to supplier price increases, freight, and labor inflation -- is expensed first, compressing gross margins. Selling, general, and administrative expenses have risen because Advance is staffing its stores with skilled people. In addition, a vendor filed for Chapter 11 bankruptcy protection. These are short-term issues, however. We think Advance can earn $4 to $5 in a few years and the stock could trade up to $80 to $100 a share.

The stock was largely sold by investors who lost patience with steps that could ultimately drive earnings and the share price higher.

Thanks, Mario. Let's hear from Rajiv.

Rajiv Jain: We feel corporate earnings will be under pressure this year as depreciation costs kick in for technology companies and the rate of change of capex [capital expenditures] slows.

We owned Nvidia until last summer. I have recommended companies such as Nvidia and Meta Platforms in the past, but have pivoted away from tech and other companies related to the artificial-intelligence theme. Take Alphabet's Google, which gets the majority of its revenue from digital advertising. In our view, there is no reason to think Google will gain market share in digital advertising because the rollout of Gemini AI is just replacing traditional Google Search traffic. This shift isn't expansive to Google in aggregate, and might even hurt ad revenue because Gemini AI decreases the ad inventory per query. The cost associated with serving Gemini AI is far more expensive than traditional search. Plus, the digital advertising space is becoming saturated.

I might love Google as a user, but its capex is high and the quality of earnings has deteriorated.

Are you recommending that investors sell Alphabet short?

Jain: No. We don't short stocks. I am explaining what we don't want to own, and then what we like. If you don't own tech, you don't own 40% of the market. But as I explained this morning, we feel the AI trade is on extremely thin ice.

Let's look at stock-based compensation, or SBC, which many tech companies use. This enhances reported earnings and cash-flow-from-operations metrics. Some people think it doesn't matter, but in 2025, shares of companies with the highest percentage of stock-based compensation to revenue performed worst, while those with the lowest percentage performed best on an industry-neutral basis. The spread was almost 14 percentage points. Software companies have the highest percentage of SBC, and stocks such as Salesforce, Workday, and ServiceNow haven't performed well. Palantir Technologies is an exception, for now. If we adjust Alphabet's free cash flow for SBC, which is now almost 6.5% of revenue, we see that its free cash flow has been almost flat for the past five years, at about $50 billion. There has been no growth. The rampant use of stock-based compensation and changes in accounting policies are telling us we are late in the cycle.

As I mentioned earlier today, the value of GPUs and TPUs [graphics processing units and tensor processing units, both used in AI computation] is depreciating within 24 to 36 months. Will the chips be around for five years? Yes, but in our view their economic value will disappear. Then, look at Meta Platforms' $30 billion deal to build a data center in Louisiana. For the privilege of keeping the liability off their balance sheet, they are incurring an additional 1.5 percentage points of financing costs. If this were such a good investment, why try so hard to keep it off the balance sheet?

To give you another example, xAI raised $20 billion of capital in October in a deal that valued the company at $200 billion. Remember, this is a company that had maybe $1 billion in revenue in 2025 and probably lost $15 billion. About $12.5 billion of that capital raise was debt, and $7.5 billion was equity. Nvidia anchored the deal with $2 billion. Guess where xAI is going to spend that money. On Nvidia chips! Nvidia made almost 50 side deals. If demand is so great, why invest in its customers?

Most of the data-center building in the U.S. isn't being done by the hyperscalers [massive technology companies], but by smaller data-center developers, some with less experience than you would think. We are already seeing cracks appear in the private-credit market. Business development companies, which lend to smaller companies, are under pressure. First Brands filed for bankruptcy protection last year; it may be the canary in the coal mine.

The monthly ISM [Institute for Supply Management] manufacturing index came out today. It showed a tenth month of contraction. Then, if you look at housing data, more than half the counties in the U.S. have seen home-price declines for the past six months. The Austin, Texas, market is down 20%. Prices in South Florida are down more than that. Lennar, the home builder, said it is subsidizing almost two-thirds of homes it builds through in-house mortgages, most of which come with mortgage buydowns.

Now tell us what you like.

Jain: We want to buy steady earnings at a relatively cheap price, and we think the most defensive names are selling at attractive valuations. Among regulated utilities, American Electric Power trades for around 18 times earnings and yields 3%. We believe earnings will grow by 7% to 8% a year over the next five years. Like David, I don't want to own unregulated utilities such as Constellation Energy or Vistra. Maybe there is a bubble, maybe not, but cracks are appearing in a lot of growth stocks. Regulated utilities, on the other hand, will likely give you 7% annual earnings growth with almost 100% certainty over the next five years, and they yield around 3% to 4%.

The S&P 500 trades for 25 times trailing 12-month earnings. Stock-based compensation is almost $250 billion at these companies. When the dot-com bubble burst, stock options were worth far less. Amazon.com's stock lost 95%, partly because it had to start paying employees real money, which reduced cash flow. We believe utilities offer an alternative.

Which other utilities appeal to you?

Jain: Duke Energy is trading around 18 times earnings. Earnings are growing by 6% to 6.5% this year, and we expect that to improve to around 7% or so. The stock yields 4%.

American Water Works, a regulated water and wastewater utility, has been one of the most predictable businesses you can find. The company is rolling up water utilities; there are about 50,000 in the U.S. Earnings are growing by 8% to 9% a year, and the stock yields about 2.5%. S&P 500 earnings have grown by 8.5% in the past 10 years. I doubt they will grow that much in the next five years.

Turning to consumer staples, Chris recommended Nestlé [in the second Roundtable issue]. We also like Nestlé. This is a high-quality franchise with a strong capital return and an improving outlook. Management has reset priorities and is now focused on operational discipline and cash generation. Revenue growth is stabilizing in the mid-single digits, supporting 6% to 7% growth in earnings per share, plus a 4% dividend yield. Over the past five years, Nestlé generated more free cash flow than Amazon, adjusted for the full cost of SBC dilution and SBC taxes. Yet, it trades at a fraction of the valuation, with about a $250 billion market cap, versus $2.5 trillion for Amazon. An overaggressive pricing scheme during the Covid pandemic and activist distractions led to underperformance in recent years.

During the Covid pandemic, a lot of consumer staples companies raised prices aggressively. Heineken raised prices almost 60% above the inflation rate over a three-year period. Beer is still a growing industry outside the U.S. Emerging markets account for about 60% of Heineken's sales. Heineken is trading for 13 times earnings, down from almost 30 times not that long ago. The company is buying back shares and cleaning up its balance sheet.

Alcohol consumption is declining among younger people, but there is no change in trend in the 30-plus market. GLP-1 drugs aren't a factor in most of the world. They are too expensive. We also like Anheuser-Busch InBev. Free cash flow is growing by low-double digits. The stock is trading for around 16 times earnings and yields 2%. The company is buying back 3% to 3.5% of its stock. Nearly half the business is in Latin America, where there is no GLP-1 issue. The U.S. is around 25%.

What else do you like?

Jain: Corporate earnings have been strong in India over the long term, but the stock market hasn't done much for the past year and a half. HDFC Bank just reported its latest results. Loans are growing by low-double digits, and the bank is seeing organic loan growth, which is hard to come by these days. It completed the merger of its parent, HDFC Ltd., in 2023, and is now moving past the disruption caused by that deal, so it is able to grow a bit faster than in the past. The stock trades for around 16 times earnings. Return on equity is 15%. HDFC is selling at a discount to JPMorgan Chase on a price-to-book basis, with loan growth of 12% versus mid-single digits for JPMorgan.

Inflation is lower in many emerging markets than it is in the U.S. or Europe. Inflation in India is running at about 2.5% a year. The cost of capital has come down dramatically in a lot of emerging markets. In fact, it is cheaper for large corporations to borrow in India than in the eurodollar market.

AXIA Energia, the Brazilian utility, is another company we like. It was known until last fall as Electrobras. The company was privatized a few years ago, which means there should be continuous operational improvements. It is a big player in hydropower. The stock is trading for 11 to 12 times earnings, with an 8% dividend yield. We think earnings can grow by double digits. This is Brazil's largest electricity company, and is uniquely positioned to benefit from a Brazilian power market that is increasingly volatile. It also has an underappreciated transmission business that controls roughly 40% of the national transmission network, much of it aging. It is positioned at the center of a multiyear, regulated reinvestment cycle as grid bottlenecks become the primary constraint on system reliability.

We still like tobacco stocks. These companies have pricing power and they generate strong cash flows. A significant portion of revenue is from smokeless products that have shown strong volume growth. I have mentioned Philip Morris International in the past, and continue to like it. The stock is trading for 19 times earnings and yields 4%. British American Tobacco is trading for 12 times earnings and has a 6% dividend yield. The volume decline in combustible cigarettes appears to be stabilizing.

Staples, healthcare, and utility stocks, the three weakest areas of the market, have never been cheaper in the past 40 years, except at the peak of the dot-com era. European banks also look cheap. On a price-to-book-value basis, they are back to pre-2007 levels. Cyclical companies make up 16% or 17% of the S&P 500.

Thank you, Rajiv. Scott, what is on your shopping list this year?

Scott Black: My first pick is Camden National, a small-cap bank in my home state of Maine. The stock is trading for $43 a share. There are 17 million fully diluted shares, and the market cap is $732 million. The dividend is $1.68 a share, for a yield of 3.9%. I build my own financial models, as you know, after we talk with management.

Camden's earning assets will be about $6.7 billion at the end of this year. Its net interest margin should improve to 3.26%, which implies net interest income of $215.3 million, or $210 million after provisions for credit losses. Noninterest expense will be about $149 million. We estimate profit before taxes of $116.84 million. Taxed at 20%, that gives you $93.5 million. Divide that by 17 million shares, and Camden will earn $5.50 a share this year. Analysts are estimating $5.46, close to our estimate. My estimate reflects a 23% increase from last year's estimated earnings of $4.43 a share.

What accounts for such a large increase? Black: Camden acquired Northway Financial last year, based in North Conway, N.H. The deal basically doubled its total addressable market. Camden's footprint runs from Bah Habbah, Maine -- we don't call it Bar Harbor -- down to York, Maine, mostly along the coastline. With the Northway merger, it became the No. 1 community bank in New Hampshire and Maine in terms of deposits.

Camden isn't sexy like an AI company, but it is cheap. The stock sells for 7.8 times this year's estimated earnings and 1.08 times book value. The pro forma return on equity is 13.1%, higher than most small banks, which have an ROE of 10% or 11%. The pro forma return on assets is 1.33%, in the top quartile of their peer group. The bank has reserved $45 million for loan losses and has $8.3 million of nonperforming loans. That is a bulletproof 5.5 times coverage.

Commercial real estate is 43% of the loan mix, and residential is 40%. Commercial and industrial lending is only 10%, and consumer loans are 7%. The investment portfolio, which includes mortgage-backed securities and Treasuries, is $1.4 billion and currently yields about 4%.

How much did Camden pay for Northway Financial?

Black: They paid about $86 million, or 13 times trailing earnings. It was a highly accretive deal. Camden calculated the internal rate of return at 24% after taxes. Camden has had five consecutive quarters of rising earnings, and earnings are likely to keep going up.

My next pick is M&T Bank, a super-regional bank. It is based in Buffalo, N.Y. Warren Buffett owned the stock a million years ago. M&T was trading for $204 a share on Jan. 2. There are 154.7 million fully diluted shares, for a market cap of $31.7 billion. The company pays a $6 annual dividend, for a yield of 2.9%.

M&T has total assets of $211 billion. I expect net interest income to grow by about 4% this year. The reserve for loan losses is about $500 million. Noninterest expense will grow about 3.5%, to $5.51 billion. Profit before taxes will be a little over $4 billion. Taxed at a 24% rate, that leaves net income of $3.07 billion. Subtract $152 million for preferred dividends and you get $2.92 billion, or about $19 a share. The stock is trading for 10.7 times estimated earnings and 1.2 times book value. We expect earnings to rise 14% this year.

M&T has a high net interest margin of 3.68%. The bank isn't overly sensitive to changes in interest rates, in part because of its use of interest-rate swaps. The forecast 2026 return on equity is about 11% after taxes, and the bank is aiming to lift it to 13% over the next three years. Return on assets is 1.4%, and the loan-to-deposits ratio is 0.84. The investment portfolio is $36.9 billion, with an average yield of 4.2%, a duration of 3.35 years, and an unrealized loss of $626 million, which is negligible.

M&T's banking footprint runs from Maine down to Virginia. The bank serves 22% of the U.S. population and covers 25% of U.S. gross domestic product. It is No. 3 in deposit share in the markets it services, behind JPMorgan Chase and Bank of America, and No. 3 in branches, with 939. The loan portfolio is diversified. Commercial and industrial loans are 37%; residential real estate is 18%; and commercial real estate, 15%. People worry about leveraged loans, but they account for only about $5 billion of a loan portfolio of $136 billion.

We have rules about reserve coverage at Delphi, and M&T was under-reserved for bad loans about two years ago, but it has built up reserves in recent years, and now has 1.43 times reserves to nonperforming assets. That is a margin of safety.

My next recommendation is controversial.

We're all ears.

Black: Dell Technologies has grown its AI server business and become a surrogate AI play. The company has two divisions. The infrastructure solutions group, or ISG, sells AI servers plus traditional servers to companies a tier below hyperscalers that operate data centers. It also sells traditional servers to the enterprise [corporate] market and neocloud companies. ISG revenue could climb from an estimated $60 billion in the fiscal year that ends Jan. 31 to about $73.5 billion in the next fiscal year, for a gain of about 22%. AI servers are growing much more rapidly than traditional servers.

The client solutions group is a fancy name for Dell PCs, notebooks, storage devices, and so forth. We see revenue in that business climbing from about $49.7 billion to $51.2 billion. Management said on the latest conference call that the PC refresh cycle is in the seventh inning. This is a low-margin business. Dell had a 14.5% share of the PC market in the third quarter, behind HP and Lenovo. Its customers include 75 of the world's 100 largest enterprises, public-sector organizations, and governments, which is a good representation.

What could go wrong? There is a shortage of DRAM and flash memory. The company says it has built up inventory, but many companies are standing in the queue, and there could be a shortfall.

I have Dell generating $124.7 billion in revenue this year. Wall Street's estimate is $123.8 billion. I project $10.3 billion of operating income, reduced by $50 million of corporate expense and $712 million of interest expense, which leaves pretax income at $9.55 billion. Assuming a tax rate of 20.2%, Dell will net $7.62 billion, or $11.55 a share. This is a cheap stock, trading for 11 times earnings. By my calculations, the company generates a 35% return on total capital. Dell continues to buy back stock.

Gabelli: How much of the company does Michael Dell own?

Black: He owns approximately 50% of the company.

I should note that Dell will deliver 500 kilowatt-hour density racks. These are high-powered data service racks for servicing all the power requirements for GPUs that require advanced cooling technologies. In a year, that will be at one megawatt. This is a high-end cloud-computing supplier.

You haven't explained the controversy. What is it?

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