Although the electoral process has been a long and frustrating one, it finally resolved – at least to most Americans – in the form of Joe Biden becoming president-elect. It wasn’t exactly a surprise since the nation suffered badly under the novel coronavirus pandemic. What was shocking was how tight the results were, leading outgoing President Donald Trump to question the results. That may have some influence on stocks to buy this week, though you should also consider larger trends at play.
First, does Trump have a case for asserting rampant voter fraud in key battleground states? As I’ve stated multiple times before, you never want to count out “The Donald.” Certainly, the aggressive manner in which he is prosecuting this fraud narrative makes one pause – could the Democrats really be stealing the election? I like to think I’m open minded. However, extraordinary claims require extraordinary evidence, and so far, we’re just not seeing it.
While I don’t consider myself a political expert – which is different from having political opinions, just to be clear – the charges seem odd. If the Democrats had the power to manipulate the presidential election, why didn’t they manipulate down ballot as well? Though I give some margin for the Trump administration to provide the evidence, investors ought to adjust their strategy for stocks to buy with the assumption that Biden will seal the deal.
If so, we can focus our attention on the issue that has wrecked our society and economy: the novel coronavirus. Over recent days, we have seen some mindboggling numbers, driving the one-week average to above the 100,000 new daily cases threshold. To say that’s troubling would be an understatement, giving the future Biden administration more than a handful to deal with. Thus, the framework for stocks to buy will still revolve around the outbreak.
However, what’s encouraging here is that Biden has consistently stated that he will follow the science and listen to the experts. More importantly, with multiple breakthroughs in the vaccine space, it may be time to reconsider what a post-Covid-19 world might look like. In that spirit, here are the stocks to buy this week.
- Pfizer (NYSE:PFE)
- Abbott Laboratories (NYSE:ABT)
- Johnson & Johnson (NYSE:JNJ)
- Archer Daniels Midland (NYSE:ADM)
- NextEra Energy (NYSE:NEE)
- Wheaton Precious Metals (NYSE:WPM)
- Axon Enterprise (NASDAQ:AAXN)
- Blink Charging (NASDAQ:BLNK)
- Sturm Ruger (NYSE:RGR)
For maximum utility, I’ve separated these companies into three categories (with three stocks each): higher-probability names with limited upside, a balanced approach between upside potential and risk, and finally, the downright speculative trades.
Finally, although most people have accepted or are on the road to accepting Biden as President-elect, many ardent supporters of President Trump are only at the first stage of grief: denial. Worryingly, the next step is anger. At the very least, some of your stocks to buy should reflect this reality.
Stocks to Buy This Week: Pfizer (PFE)
Obviously, Pfizer made some big news at the start of this week when it announced that its coronavirus vaccine candidate was more than 90% effective. To say the very least, that was a startling announcement. Typically, vaccines take years to research, develop and distribute. Here, the pharmaceutical industry has apparently delivered the goods inside a year. So, that makes Pfizer an overwhelming choice for stocks to buy this week, right?
Well, anything in the broader healthcare industry should be taken with a grain of salt. Therefore, it’s difficult to regard anything here as a no-brainer pickup. Nevertheless, the biotechnology underlining PFE stock checks out on the theoretical front. I go into greater detail in my article regarding Inovio Pharmaceuticals (NASDAQ:INO) but in a nutshell, Pfizer’s vaccine is based on RNA. Since RNA resides in the cytoplasm and not in the nucleus where our DNA is, the threat of host-genome integration should be low.
Does that make Pfizer’s candidate effective as claimed? We’ll have to wait for additional data but people have an absolute right to be skeptical. However, the target vaccine should be reasonably safe, which is one of the big concerns for everyday folks. Combined with Biden’s heralding of science and mitigation protocols, PFE stock is certainly an interesting idea.
Abbott Laboratories (ABT)
With significant developments in the vaccine front, you’d naturally assume that Abbott Laboratories would be incredibly volatile. After all, with encouraging data from the sector and not just a particular company, the circumstances suggest that we’re on the cusp of a long-term (and hopefully permanent) solution. That would leave Abbott not on the list of stocks to buy but rather something else.
However, ABT stock has performed resiliently despite the encouraging vaccine news. Keep in mind that even with early signs of extreme effectiveness, the industry has a long way to go to establish that effectiveness across a wider participant base. Therefore, it’s important to have some skepticism toward any Covid-19 claims.
Also, demand for testing isn’t going to go away because a vaccine might be available. Between now and when vaccines can be distributed (which in itself could be a logistical nightmare) is a gap that can be mitigated through testing. Thus, ABT stock is still very much relevant.
Johnson & Johnson (JNJ)
With the coronavirus vaccine race locked in among several “pure” biotech firms early on, Johnson & Johnson didn’t really figure into the conversation. Instead, many analysts believed in JNJ stock because of the many underlying over-the-counter medications that were readily available to the commoner, so to speak.
Then, Johnson & Johnson delivered what appeared to be a body blow: a single-dose vaccine that did not need to be frozen, thereby improving its logistical profile. Most other vaccines in advanced-stage trials need an initial injection, then a booster shot weeks later. That made JNJ one of the better long-term stocks to consider, until it too suffered a setback.
Similar to what happened with AstraZeneca (NASDAQ:AZN), a participant for Johnson & Johnson’s Covid-19 vaccine trial came down with an unexplained illness. While JNJ stock took a sizable hit the day after the announcement, it wasn’t what I would term horrifying.
Still, I understand why some investors are hesitant. However, the setback may present a discounted opportunity as the company still offers a vast and relevant pipeline to help people manage the crisis right now.
Plus, JNJ is still performing well even with rival vaccines getting much positive attention. The reality is that we’re still at least several weeks away from distribution. In the meantime, we’ve got to handle the coronavirus and the flu with over-the-counter meds, which is the company’s specialty. Therefore, don’t ignore this for your list of stocks to buy.
Archer Daniels Midland (ADM)
On the surface, food-related companies seemingly represented the best stocks to buy during the pandemic. No matter who you are or how much money you have, you need sustenance. Therefore, this sector seemed like a no-brainer.
However, things just didn’t turn out the way I envisioned. While companies like Kroger (NYSE:KR) and Costco (NASDAQ:COST) performed well, individual food stocks to buy left much to be desired. So, if this resurgence turns out to be the dreaded second wave, I’m going with Archer Daniels Midland and ADM stock.
As you know, Archer Daniels focuses on food processing and ingredients. They provide the solutions and components that all food manufacturers need to take their products to market. With ADM stock, you’re not banking on any one name, but rather, the industry.
Moreover, Archer Daniels is particularly intriguing for those interested in plant-based meat companies but who don’t want to risk the volatility of buying Beyond Meat (NASDAQ:BYND) shares. With ADM, you get exposure to this exciting space but potentially mitigate the wildness.
NextEra Energy (NEE)
During the second and final presidential debate, President Trump put Biden on the defensive when the incumbent pressed the former VP on his stance on fracking. Perhaps due to the pressure, Biden blundered, rendering a false statement that he never opposed fracking.
As it turned out, Biden made public remarks suggesting that there was no place in his administration for fossil fuels, which includes coal and fracking. Of course, that brought some concern to the oil industry as its livelihood was possibly on the line.
In reality, the situation is overblown. Our energy infrastructure can’t accommodate a radical pivot to clean energy. We’ll still be using fossil fuels for years ahead. Nevertheless, with Biden winning the election, this event will raise the profile of NextEra Energy and NEE stock.
Even if Trump takes the victory (through incredibly unusual circumstances), it’s not game over for NextEra. Sure, NEE stock may be volatile in the nearer term in that scenario. However, young voters are increasingly concerned about the environment and sustainability. If the Republicans wish to win future elections, they’ve got to take this issue seriously. Therefore, NEE could end up becoming one of the insulated stocks to buy.
Wheaton Precious Metals (WPM)
It seems like no matter what the market environment, gold is always risky. Therefore, you should take the idea of Wheaton Precious Metals being one of the best stocks to buy with a grain of salt. It’s not that I don’t believe in WPM stock — I do. Rather, this is a sector that has produced much disappointment.
Still, I hate to use this phrase, but this time could be different. For one thing, it is different. While we’ve suffered serious pandemics before – most notably the H1N1 pandemic of the late 2000s – we’ve never seen state and federal governments impose stay-at-home orders. Unsurprisingly, this imposed a hard stop on the economy, making WPM stock quite intriguing.
Primarily, the doom-and-gloom prognostications that will shoot gold to five-digit prices are just a tad more credible today. Frankly, the Federal Reserve doesn’t have many monetary weapons other than to adopt as accommodating a policy as possible. Theoretically, this should be very good for gold.
I also like Wheaton for its business model. As a streaming company, Wheaton doesn’t have the direct risks associated with all-or-nothing mining projects.
Axon Enterprise (AAXN)
In my view, Wisconsin is a rather uneventful place outside of football season and I believe the residents like it that way. However, the state and specifically the city of Kenosha made international headlines in August. That’s where white police officers shot a Black father, Jacob Blake, leaving him paralyzed and needing multiple surgeries.
I’m not going to comment on the matter due to the sensitivities involved. What I can say, though, is that the optics are absolutely horrific.
But I can’t help but wonder, what about the many incidences where we don’t have footage? That’s where police body cameras are becoming vital, not only to protect good law enforcement officers – and let me be clear, most of them are good people – but also to hold the bad ones accountable. Therefore, I believe Axon Enterprise and AAXN stock will see significant long-term gains.
And no, I don’t consider this to be a cynical play on stocks to buy this week. Rather, it’s the reality we live in. Obviously, we can’t have a situation where law enforcement guns down people in the back. But we also can’t have anarchy on the streets – something that could happen if segments of society refuse to accept the election results. Also, keep in mind that we have the Senate runoffs that could determine control of the upper house of Congress.
Axon may not provide a happy middle ground, but it’s one of the best solutions we have. Therefore, I’m bullish on AAXN stock.
Blink Charging (BLNK)
For many years, the concept of range anxiety clouded the bullish case for electric vehicles. But lately, improving EV battery technology has eased this concern significantly. Still, for the platform to become truly mainstream, we will need greater growth in our charging infrastructure. And that’s part of the reason why Blink Charging is one of the speculative stocks to buy this week.
As you know, part of the marketing message of EVs is their environmental friendliness. From what I understand, that wasn’t too high on President Trump’s agenda. But it’s one of the top issues for the Biden team. And because the former vice president has looked calm and collected relative to the incumbent, I think there’s a good chance that Biden may actually take this. In my opinion, that wouldn’t be too shabby for BLNK stock.
Further, many Americans live in apartments. According to data compiled by the National Multifamily Housing Council, 17% of those in California are apartment dwellers. That doesn’t lend well to EVs, which automatically cuts out prospective buyers. But with charging infrastructure, EVs will benefit, which in turn will also boost BLNK stock.
Sturm Ruger (RGR)
If Trump pulls off an unlikely coup regarding the election fraud controversy, one of the metrics that political analysts may wish to dissect is gun sales. That the firearms industry represented one of the most profitable sectors for stocks to buy throughout much of 2020 should tell you something.
At the end of the day, voting is one thing, buying firearms is a completely different realm. Such an action demonstrates that while people may be hopeful with their words, they’re hedging their bets with guns. Of course, this has been a significant catalyst for Sturm Ruger and RGR stock.
However, Biden won, so you’ll want to keep close tabs on gun stocks to buy anyways. His running mate Kamala Harris is a well-known proponent of gun control. More than likely, people will rush to firearms retailers and bid up the sector, bolstering gun sales which were already at record levels.
But even if Trump gets his second term through absolutely ridiculous circumstances, I still see an upside pathway for RGR stock. Why? I genuinely believe that social trust has broken down in the U.S. and it will take years to repair this mess. In such an environment, people will load up.
On the date of publication, Josh Enomoto held a long position in gold.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.