My 2 Favorite Stocks to Buy Right Now

If you want to kick off the new trading week with new stock ideas, you came to the right place. I want to dive into some of my favorite stocks. They might not wind up becoming your favorite stocks by the time we're done, but exploring how someone approaches picking stock is always a rewarding pastime.

I like media stock Sirius XM Holdings (NASDAQ: SIRI) and cruise line stock Royal Caribbean (NYSE: RCL) in today's market. They are trading at low enough price points to take off in the current market.

1. Sirius XM

If I offered you a literal monopoly, currently yielding more than treasury bills, packing a single-digit P/E ratio, and it's a Warren Buffett position that Berkshire Hathaway (NYSE: BRK.B) has been adding to over the past year, I would probably have your attention. The moment that I mention that it's Sirius XM you might find yourself thumbing the dial to hear anything else.

Yes, Sirius XM is the country's only provider of satellite radio, but it's been shedding subscribers in recent years as folks find cheaper ways to stream music, sports, news, and podcasts through their cars. Yes, the stock is yielding more than 5% right now, but that is only because shares of the media stock have been cut by more half since the start of last year.

Yes, the stock is selling for less than eight times this year's projected earnings, but that figure jumps to nearly 20 if we go with enterprise value instead of market cap as the numerator. And finally, yes, Berkshire Hathaway has been buying shares. Berkshire Hathaway now owns more than 37% of Sirius XM's outstanding shares, but is this a good thing? Berkshire Hathaway has been criticized for selling a rising Apple (NASDAQ: AAPL), missing out on huge recent gains. Buffett's firm can also be taken to task for buying a sinking Sirius XM, taking hits to the value of its public portfolio. More importantly, what will happen to Sirius XM shares if Berkshire Hathaway starts to sell?

Image source: Getty Images.

This may seem like an odd intro to one of my favorite stocks, but there are some big reasons to consider Sirius XM now that it's trading for a hysterical, historical bargain. Revenue may be declining for the third year in a row, but analysts see the business stabilizing next year before returning to top-line growth in 2027. Sirius XM's consumer appeal has been languishing, particularly with younger drivers. Sirius XM is hoping to reshape that narrative, signing up popular podcast producers to the platform.

Sirius XM's biggest knock is that the value proposition isn't there, as folks aren't driving and commuting as much as they did before the COVID-19 crisis. Headwinds should turn into tailwinds now. Gas prices are low. Companies are calling back employees to in-office work. The average age of a car on the road has never been higher. Sliding borrowing costs and the potential of stimulus checks can help jump-start the moribund automotive market. Sirius XM has so many ways to pump up the volume in the near future. Remember me then, when I was telling you about an out-of-favor company with a clear turnaround path.

2. Royal Caribbean

If you're looking for a cheap sector, you might be surprised if you set sail the cruise line industry. The three largest players in this space trade for 9, 12, and 17 times next year's profit target. I'm going to throw you into some uncharted waters by recommending that you go with the priciest of the three.

Royal Caribbean stands out in this market, and not just for its forward earnings multiple in the high teens. It has historically cranked superior results. It routinely commands the highest growth and margins. It also has the superior stock chart, nearly a five-bagger over the past five years.

Royal Caribbean is worth paying up for as an investor. In 2023, it became the first of the three cruise lines to turn profitable. Last year, it became the first -- and so far, only -- cruise line to resume paying dividends. This year, Royal Caribbean has reached new high-water marks for revenue, earnings, and deposits it's holding for future sailings. What will 2026 bring? Even if it's just more of the same, that should only continue to pad its superior performance.

Rick Munarriz has positions in Apple, Royal Caribbean Cruises, and Sirius XM. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.