With the first Republican debate behind us, the 2024 presidential election cycle is underway. Former President Donald Trump turned many heads this week when he announced he would be skipping the debates. But for his lesser-known competitors, this presented a unique opportunity to raise their profile on the national stage. Last night’s lineup included every other Republican candidate, including former Vice President Mike Pence, Florida Governor Ron DeSantis, former New Jersey Governor Chris Christie and former ambassador and Governor of South Carolina Nikki Haley. While DeSantis led all present candidates in the polls going into the debate, biotech entrepreneur Vivek Ramaswamy may have emerged as the night’s biggest winner. But the implications of this debate span beyond political matters. For investors seeking the best stocks to buy, this is a key time to be paying attention. As Barron’s reports:
“[Politics] does matter for individual stocks. Look no further than the Inflation Reduction Act, which was signed into law just over a year ago and led to companies announcing some $110 billion in new investments in clean energy, or the CHIPS Act, which included $52 billion to build semiconductor factories in the U.S. Those laws certainly provided a big boost to industrial stocks, which was one of just three sectors to outperform the S&P 500SPX –0.62% over the past 12 months.”
The outlet also highlights four areas of policy that investors should be watching, as noted by Jefferies’ global head of Environmental, Social, and Governance (ESG) strategy Aniket Shah. As this expert sees it, “energy, ESG, human capital, and foreign policy” will be of paramount importance as the 2024 presidential election unfolds. For investors, this could mean some unique opportunities to profit over the coming year.
Stocks to Buy: Advance Auto Parts (AAP)
This well-known American brand is coming off a difficult year. Advance Auto Parts (NYSE:AAP) is the type of company that is made for a Republican administration. Founded in Virginia, it is one of the best-established names in its space, supplying auto parts for Americans who want to fix and rebuild their own cars. In a time when more and more people are making the transition to electric vehicles (EVs), Advance Auto Parts reminds conservative thinkers who still resist this trend of the eras they long for, when American drivers drove American-made cars. A Republican victory could create the type of momentum that is great for stocks like AAP.
It’s true that Advance Auto Parts has struggled significantly this year, reporting poor Q1 earnings. But InvestorPlace contributor Josh Enomoto believes it could benefit if economic conditions get worse, making AAP stock a good buy. In his words:
“The fundamental narrative remains relevant: under an economic challenge, let alone a full-blown crisis, people will keep their vehicles running for as long as possible. Therefore, AAP could be trading at a hefty discount. Sure, analysts remain very pensive about the opportunity. But if you’re looking for secure stocks during a market crash, this one already did.”
Enbridge (ENB)
It’s true that Republican policies tend to focus on drilling for oil rather than investing in clean energy solutions. But as global temperatures continue to rise, it is becoming impossible to ignore the fact that the world needs to transition to clean energy. For that reason, it makes sense for investors to focus on companies with exposure to both sectors as the presidential race continues. Enbridge (NYSE:ENB) is exactly such a stock. While traditionally considered an oil and gas company, this Canadian company has pipelines that run throughout the U.S. But it has also invested heavily in renewable energy production, making it a smart choice among stocks to buy for either administration.
Enbridge boasts a “diversified portfolio of renewable energy projects,” which includes 23 wind farms and 16 solar energy operations. It’s also a blue chip dividend stock, and while it’s spent the past few months trending downward, the company seems poised for a comeback. If Republican politicians continue gaining momentum, it will likely boost oil and gas stocks across the country and beyond. But regardless of the 2024 election results, this company remains a key player in both oil drilling and energy transitioning.
Stocks to Buy: General Dynamics (GD)
Republicans like to scale back clean energy investment, but they also tend to prioritize defense spending. And for investors looking to gain exposure to that sector, General Dynamics (NYSE:GD) is a must-have stock. An industry leader in aerospace and defense technology production, this firm has a long, distinguished history of procuring lucrative government contracts and providing weapons, technology and IT services to the Department of Defense, many of which last for years. While GD stock is currently slipping, InvestorPlace contributor Jeremy Flint sees it as a bargain that investors should snap up before it rebounds. As he states:
“At the end of July, management issued increased revenue forecasts driven by increased demand for private jets and military equipment demand. The company’s improved forecast is backed by performance. The recent $2.70 earnings per share beat analyst estimates by a solid 6%. Sales are also up across the board. The company reported $2.5 billion in new aerospace sales last quarter and a 15% increase in marine sales demand.”
Defense stocks may not be quite as in focus as they were last year when Russia first invaded Ukraine. But even if Republican politicians roll back aid to Ukraine, as several mentioned during last night’s debate, they will likely increase funding in other areas of defense.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
