12 Stocks of Christmas: tweaking the formula for 2026

Last year we introduced our festive stockpicking series, the 12 Stocks of Christmas. During the quiet period between Christmas and Twelfth Night, we brought you 12 pieces of company analysis covering ideas from our own watch lists.

While these weren’t stock tips, they were companies we liked for various reasons and felt optimistic about for the year ahead.

Twelve months later, we’re now putting the finishing touches to the 2026 edition of the 12 Stocks of Christmas. They will be rolling out daily from 25 December through to 5 January.

However, before we share this year’s batch of 12 stocks, I want to take a look at the performance of last year’s selection and explain why we’re tweaking our approach this year.

How did we do?

A year is both an eternity and a very short period in the markets. Many things have happened this year that might not have been expected 12 months ago. I suspect the next 12 months will also contain a few surprises.

How did our 12 Stocks perform in 2025? The short answer is that a few did well, while a larger number did not. Here’s a snapshot:

The average return was -0.3% – well below the 18% return generated by the FTSE All-Share index over the same period (all figures exclude dividends and fees).

This is clearly a disappointing result, so what can we learn from this?

Drilling down into the data

We’re data-driven investors here at Stockopedia. We believe in trying to identify and benefit from financial factors and other patterns that have been found to repeat themselves over time.

In this case, the simplistic view I’ve presented above excludes some valuable data about the performance of our selection last year.

The stocks we selected last Christmas fell into four different StockRank styles:

While three or four stocks is too small a sample to be statistically rigorous, averaging the performance of the stocks within each style we selected last year suggests a quite decisive pattern of results:

In aggregate, our four Super Stocks delivered double the return of the FTSE All Share index last year. They were also the only style to deliver a positive result, overall.

One element of this may simply be timing. What our data have shown over the years is that Contrarian stocks – essentially a value style – often require longer to deliver on their potential than Super Stocks.

Similarly, High Flyers are often quality compounders that perform well over longer periods. All of the four High Flyers listed above have been multibaggers over 10 years or more. But the share price performance of such businesses over shorter periods can vary widely depending on market sentiment and near-term newsflow.

Over the last year, we’ve seen market cap-weighted indices such as the FTSE 100 and S&P 500 driven higher by remarkable gains for a handful of the largest companies. Many other good businesses have underperformed the market.

This situation can be modelled by the relative performance of the main UK indices over the last 12 months:

The beauty of the Super Stock styling is that it’s designed to overcome such external headwinds by finding stocks that offer a balanced mix of quality, value and momentum. It’s the last of these factors – momentum – that’s essential to near-term returns.

There are no guarantees, as our results from last year show. But over a year, a few winners from a balanced selection can be enough to deliver a market-beating portfolio result. This is a pattern Ed has often seen replicated in the NAPS portfolio – here, for example.

Our 12 Stocks of Christmas are not share tips, nor are they intended to form a portfolio. But naturally, we still want them to have the best chance possible of doing well!

With this in mind, here’s what we’ve decided to do for 2026.

Our updated approach

A key advantage of screening and ranking systems is that they provide a quick and easy way for investors to narrow the investable universe to a more probable subset of stocks.

For 2026, we’ve used some simple criteria to narrow down our selections to a short list from which Ed, Graham, Mark and myself have each selected three shares.

Here are the rules:

• StockRank Style: Super Stock – we believe this offers a better chance of success over a one-year timeframe than some other styles.

• Market Cap: > £10m – micro caps are often illiquid, volatile and require individual research. They’re less likely to be suitable for a screen-led approach.

• EPS upgrade FY1 3m: >0% – the aim of this rule is to exclude stocks that have suffered a profit warning in the last three months. We’ve found that such downgrades often lead to a longer period of weak performance, so it makes sense to avoid them here.

• Industry group: exclude REITs and Collective Investments – these don’t always behave like regular trading companies, so again it makes sense to exclude them.

A screen based on these requirements produces a list of 60 Super Stocks, at the time of writing.

From this list, each of us has selected three stocks:

• One stock with a Quality Rank >90

• One stock with a Value Rank >90

• One stock with a Momentum Rank >90

In this way, we have selected 12 Super Stocks for 2026, split equally into quality, value and momentum-led stories.

We’ll be publishing a short piece of analysis on each of our selections daily, starting on Christmas Day. Stay tuned – and please let us know what you think about this new approach in the comments below.

Disclosure: at the time of publication, Roland owned shares in Sage and International Personal Finance.