2 Stocks Down by 25% or More This Year to Buy and Hold

Prosper Junior Bakiny, The Motley Fool

Thu, Apr 17, 2025, 7:00 AM 4 min read

Equity markets have had a rough go of it this year due to President Trump's macroeconomic policies. Though it can be challenging to navigate this environment, one way to make the best of it is to look for terrific stocks to invest in while they are down. Doing so could lead to outsized returns for patient, long-term investors.

To that end, let's consider two stocks that have declined by at least 25% this year and look attractive: Viking Therapeutics (NASDAQ: VKTX) and PayPal (NASDAQ: PYPL).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Drugmakers without a single therapy on the market tend to be somewhat risky, but investing in these companies early enough can lead to life-changing returns. Viking Therapeutics, a clinical-stage biotech, looks like one of the more attractive ones right now.

The company focuses on developing medicines for metabolic and endocrine disorders. It rose to fame last year thanks to excellent phase 2 data for its leading candidate, VK2735, a potential weight management therapy.

It's not just that VK2735's results were strong. The market for anti-obesity drugs is growing rapidly and is getting increasingly crowded. Drugmakers big and small are dipping their toes into this space -- very few have delivered mid-stage results that match those of VK2735.

Viking also produced strong phase 2 data for VK2809, a potential treatment for metabolic dysfunction-associated steatohepatitis. Another one of its candidates, VK0214, an investigational treatment for X-linked adrenoleukodystrophy -- a rare genetic nervous system disorder -- completed phase 1 studies recently, too.

While many biotechs at this stage would focus on the candidates already being tested in humans, Viking Therapeutics is still looking for new gems. It is developing a next-gen weight loss medicine that mimics the action of two hormones: amylin and calcitonin. The former aids in controlling blood sugar and satiety, while the latter helps regulate calcium levels. Dual agonists are increasingly popular in this and other fields.

Viking's pre-clinical candidate may not pan out, but the company is constantly searching for the next big thing, an attractive quality in a biotech company. Although the stock has struggled recently, clinical and regulatory progress could lead to substantial gains in the coming years.

The biotech stock might be somewhat risky, but it is well worth initiating a small position in the stock today for those comfortable with some volatility.