As Wall Street’s crystal ball, the stock market is giving early signals of a potential re-election for President Joe Biden this year. With the S&P 500 scaling new heights, the buzz among analysts is palpable, which bodes remarkably well for investors to wager on the stocks for the Democratic political climate. If Biden secures a second term, investors should see stocks in sectors such as renewable energy, electric vehicles, healthcare, technology, cannabis and others. Biden’s focus on climate change, healthcare expansion and infrastructure signals promising long-term growth for companies aligned with these themes. As we navigate this landscape, we must identify stocks that stand to gain from these policy-driven tailwinds. Here’s a rundown of three stocks poised to thrive under the continuation of Biden’s policy framework, making them remarkably lucrative bets for forward-thinking investors.
Stocks for the Democratic Political Climate: CF Industries (CF)
The United States Department of Agriculture, led by Secretary Vilsack, is channeling a massive $207 million into renewable energy and domestic fertilizer initiatives across 42 states. Unveiled at the American Farm Bureau Federation convention, this enormous investment by the Biden administration aims to invigorate the economy, focusing on supporting farmers and ranchers.
These developments bode remarkably well for fertilizer companies, notably for industry leaders such as CF Industries (NYSE:CF). CF Industries is a leading nitrogen fertilizer business capitalizing on advantageous energy price differences and robust global fertilizer demand. Moreover, it benefitted from Europe’s soaring natural gas prices last year, and with its North American energy cost advantage, CF has significantly boosted its free cash flow positioning, generating $2.37 billion on a trailing 12-month basis. Based on robust global demand for fertilizers and a favorable agricultural supply chain outlook, expect CF stock to pay many dividends for its investors.
Green Thumb Industries (GTBIF)
The potential re-election of President Biden flickers with promises for cannabis stocks, such as industry bellwethers in Green Thumb Industries (OTCMKTS:GTBIF). Savvy investors should note the alignment between Biden’s cannabis reform proposals, including rescheduling and decriminalizing, and the strong advocacy of the younger demographic. This demographic’s overwhelming support for cannabis reform is not just a political talking point; it’s a major catalyst for regulatory transformation. The implications for cannabis companies are profound, with the possibility of new markets emerging, legal barriers crumbling and the business environment becoming incredibly conducive.
Transitioning to the financial heart of the matter, GTBIF continues to impress. In its third quarter, it delivered a snappy 9% revenue increase to $275 million from the previous quarter while flaunting a sturdy balance sheet, boasting $137 million in cash. It reported a GAAP net income of $11 million, with adjusted EBITDA soaring to $83 million, a solid 30% of its sales. Furthermore, here’s the kicker — GTBIF stock has surged by an eye-popping 90% in the past six months, earning a Strong Buy rating from Tiprank analysts, who foresee a 16% upside from current levels.
Marvell Technology (MRVL)
In the bustling semiconductor space, President Biden’s commitment to fortifying U.S. semiconductor prowess shines a favorable spotlight on Marvell Technology (NASDAQ:MRVL). Biden’s initiatives in the space aim to stabilize supply chains and spur innovation, positioning the firm as a nimble player in this high-stakes market. The company, already making major waves with its foray into artificial intelligence (AI), stands to benefit significantly from these bolstered local manufacturing capabilities.
Marvell Technology, a dark horse in the chip industry, could surprise investors with an upside eclipsing its peers. The company’s adept navigation through the market headwinds is evident in its $1.42 billion in sales during its third quarter, beating estimates by $20 million.
That growth narrative is underpinned by the firm’s robust financial performance, defying odds in tough times. Marvell’s ability to outperform management and analyst expectations amidst global headwinds is a testament to its fundamental strength and savvy market positioning.
On the date of publication, Muslim Farooque did not hold (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.
