6 "no brainer" trades for Trump's Economy
And other updates
Dear Reader,
Large macro schisms cast a cloud of uncertainty over many otherwise defensive sectors. As analysts, we run the risk of complacency and attachment to our former strategies.
I am suggesting that we step back, take a deep breath, and have some fun with the big picture by asking the question:
“What if all that really matters is aligning your portfolio with the Trump admin?”
Whether the admin is able to effectively follow-through on any of the below ideas is left as an exercise for the reader:
Defense/shipbuilding/shipping: I have listened to most of Trump’s press conferences directly, and let me tell you, this guy loves big guns and weapons, specifically — for whatever reason — those on ships. He talks about it all the time. I’m no genius, but maybe this admin will provide a tailwind to HII 0.00%↑ .
Rates: These guys keep talking about getting rates lower. Maybe they will succeed? If so, TLT 0.00%↑ or ZROZ 0.00%↑ could prove beneficial for your portfolio. For real estate folks, I suggest looking into NSA 0.00%↑ — a self-storage REIT — and COLD 0.00%↑, a cold warehouse and logistics REIT.
Mexico: A lot of Mexican trade still qualifies under USMCA. This could be a massive competitive advantage for Mexican manufacturers. Potential names to look into are $GRUMAB (tortillas) and GCC 0.00%↑ (cement, mostly US operations).
Groceries: With all this talk about beautiful groceries, maybe the MAGA folks will noticeably trade down from eating out / ordering food. We have already seen some evidence of trading down in the U.K. data. I figure everyone knows the big grocery names already, but some smaller names to investigate are NGVC 0.00%↑ VLGEA 0.00%↑ WMK 0.00%↑ IMKTA 0.00%↑ SPTN 0.00%↑. I own some VLGEA 0.00%↑, which has been a deep value play, though I have some concerns regarding aggressive capex plans.
Coal: I’m not sure how effective the measures will actually be, but the Trump administration has been supposedly making it easier to permit/mine coal and easing regulations on coal plants. HNRG 0.00%↑ and NC 0.00%↑ have both faced significant regulatory hurdles/costs and could see relief from these measures. If coal plants are open for longer than anticipated, ARLP 0.00%↑ could be a winner here as well.
Fox News: There are rumors — I think Trump may have even said this himself — that Jamie Dimon’s Fox interview persuaded President Trump to back down on his tariffs. With everyone hanging on the President’s next word, is FOX 0.00%↑ potentially at the early stages of a massive bull run?
Micro-updates:
CPB 0.00%↑ please note that I advised in the chat to sell the rip because I did not appreciate management trying to sugarcoat certain metrics such as highlighting Rao’s volumes when it’s clear they’ve been doing a lot of discounting. I really dislike management presentations that try to pull sly tricks like that — I see it as a sign of denial, at best.
$YAMCY interesting price here but I think we should be looking for better opportunities
$REPYY I sold when oil crashed below $60. I’m not trying to predict the oil price. I hold PNRG 0.00%↑ for oil exposure.
NGS 0.00%↑ I managed to sell some covered calls but it’s been rough holding this. I was overly optimistic and frankly naive to give management credit for genuine NOPAT when they mentioned ROIC as a target metric. OFS management teams basically mean EBITDA / capex when they say that, and often cost pressure can eat into the margin over the contract term.
NCSM 0.00%↑ I’ve had success trading this over the last few months and could be interested to re-enter here. I think my initial article understated balance sheet strength by glossing over their massive working capital position.
NC 0.00%↑ has benefited from some recent statements / executive orders from the Trump admin in support of “beautiful, clean coal”. I would think the primary impact would be their primary power plant getting to extend its life.
$ASBFY The Primark CEO had to step down due to some sort of allegations. I still hold all of my shares.
YELP 0.00%↑ I doubled down on earnings, which seemed solid to me and initially had a strong reaction. Then I blew out of this position at around $34 to buy other things. I’m still interested.