There’s no shortage of articles touting large-cap Donald Trump stocks that investors should buy now. Most of these articles mention the same 20 to 30 stocks, but there are plenty of small-cap Trump stocks you may not be aware of.
Trump’s platform of deregulation and massive infrastructure spending stands to pump billions of dollars into certain sectors of the market. Heavily regulated sectors such as the financial sector and the energy sector stand to benefit the most from the promise of less government oversight.
At the same time, construction companies could see a huge wave of demand. Trump has promised to get Americans “off of welfare and back to work rebuilding our country.” He has pledged to spend an incredible $1 trillion investing in infrastructure.
The problem for investors is that Trump stocks have already been on fire since Election Day. However, some of the under-the-radar options still offer compelling value potential.
Under-the-Radar Trump Stocks to Buy: Encore Capital Group, Inc. (ECPG)
Trump has pledged to ease the regulatory burden on U.S. companies, and the financial sector could benefit the most. Opimas CEO Octavio Marenzi expects Trump to swoop in and make a number of regulatory changes.
He predicts Trump will eliminate the Volcker Rule and reduce capital and liquidity requirements for banks. That’s why big banks like Goldman Sachs Group Inc (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM) are common on lists of Trump stocks.
However, another change that Marenzi expects could be huge for under-the-radar stock Encore Capital Group , Inc. (NASDAQ:ECPG). Marenzi expects Trump to completely eliminate the Consumer Financial Protection Bureau. Last summer, the watchdog group released a new set of rules and regulations specifically related to debt collection. Debt collection is ECPG’s specialty. The new set of rules was enough for Citi to cut its price target for the stock from $31 to $24. In fact, the stock is down 35% in the last three years over concerns about the impact of new regulations.
If Trump eliminates this threat, ECPG stock could have some major upside. Despite the fact that the stock is up more than 55% since Election Day, it still trades at only 7.2 times projected 2017 earnings.
Under-the-Radar Trump Stocks to Buy: US Concrete Inc (USCR)
If Trump is really going to pump $1 trillion into infrastructure projects, companies that are well-positioned could see major tailwinds. Large-cap construction stocks Vulcan Materials Company (NYSE:VMC) and Caterpillar Inc. (NYSE:CAT) are often mentioned as Trump stocks. However, Hodges Fund portfolio manager Craig Hodges believes small-cap stock US Concrete Inc (NASDAQ:USCR) will also be a big winner.
“U.S. Concrete is concentrated in areas that have population growth that can support long-term demand from housing, as well as infrastructure spending on airports, roads, bridges, and much needed highway investment,” Hodges recently said. He added that there are also plenty of M&A opportunities in the fragmented concrete market.
USCR stock is up 35% since Election Day. Fortunately, it still trades at a reasonable forward price-to-earnings ratio of 17.5 and an attractive price-to-free-cash-flow of only 10.1. Those numbers make USCR stock a much better infrastructure value play than both CAT and VMC.
Under-the-Radar Trump Stocks to Buy: CVR Refining LP (CVRR)
CVR Refining LP (NYSE:CVRR) is in the enviable position of potentially benefiting from two different aspects of Trump’s policy goals.
First, Trump has made clear that his energy policy will focus on energy independence. Trump plans to make full use of America’s domestic coal, natural gas and shale oil resources.
Second, Trump’s deregulation agenda could be huge news for CVRR stock. Trump and recently appointed special adviser on business regulations, Carl Icahn, will likely change or eliminate the Renewable Identification Numbers requirement. CVRR stock could instantly see one of its largest costs completely eliminated.
According to Bloomberg, CVRR spent roughly $220 million on meeting RINs requirements in 2016. Incredibly, that cost amounts to roughly 15% of CVRR’s entire market cap.
Icahn, who is a major CVRR investor, penned a scathing critique of the RINs requirement in the Wall Street Journal back in November. Icahn said the RINs market is filled with “manipulation, speculation and fraud.”
CVRR stock is up 66% since Election Day as investors cheer the possibility of an end to RINs. However, there seems to be plenty of upside remaining. CVRR stock is still down down 34.9% from a year ago.
As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.