A few days ago, we discussed several stocks that could benefit from a Biden economic boom if he wins reelection in 2024. However, today I want to consider an alternative scenario – a triumph from former president Donald Trump. Given Trump’s resurgence in recent polls, I believe this outcome may be more probable than many think.
While the Biden administration has overseen a robust economic recovery from the pandemic, many middle- and working-class families continue to struggle with inflation and rising costs of living. Recent foreign policy challenges have also dragged down Biden’s approval ratings, raising electability concerns given his age. With less than a year until the 2024 election, the race remains fluid. But if you think Trump could pull off a comeback victory, certain stocks are worth considering. Let’s dive in!
Axon Enterprise (AXON)
Axon Enterprise (NASDAQ:AXON) is a company developing technology and weapons products for military, law enforcement, and civilian use. Indeed, I think this is among the bestl-positioned companies to benefit from Trump’s policies, should he triumph in 2024.
Trump has repeatedly vowed to crack down on crime, secure the southern border, and support domestic police departments. He is also likely to increase military spending substantially. This all bodes very well with respect to demand growth for Axon’s suite of body cameras, digital evidence management platforms, and non-lethal weapons.
Recently, Axon made a savvy move to acquire Fusus, providing real-time operations software to grow the company’s total addressable market by $20 billion. The new Axon Body Workforce product line also cleverly expands Axon’s reach into commercial sectors like retail and healthcare. Under a second Trump term, I would expect significant tailwinds for both Axon’s public sector and private sector business segments.
The company is already executing tremendously well. Axon’s Q3 sales grew 33% and its profitability is stellar. Thus, I believe AXON stock deserves the premium it trades at, given its prospective growth prospects.
Baker Hughes (BKR)
Baker Hughes (NASDAQ:BKR) is poised to benefit immensely from a Trump-led ‘America First’ agenda in the Oval Office.
Trump has repeatedly promised to unleash America’s “drill, baby, drill” energy production potential. He is likely to reduce regulations substantially for domestic oil and gas producers, while expediting LNG export projects globally. This should translate into a surge of new business for Baker Hughes.
While BKR stock has struggled amid concerns over a growth slowdown, a second Trump term could profoundly change the company’s trajectory. In the company’s core Oil Field Services and Equipment segment, Baker Hughes still managed to grow 2023 revenues by 16%, while growing its operating margins by an impressive 80 basis points.
Thus, Baker Hughes’ outlook remains cautiously optimistic. Under a Trump administration (likely unwilling to beg OPEC for more oil abroad but rather maximize our domestic production), Baker Hughes is sure to see accelerating order growth both onshore and offshore. Its LNG capabilities will also be in high demand. Trading at a reasonable forward price-earnings ratio of 14-times, Baker Hughes seems like a value stock ready to erupt. If Trump brings a driller’s mentality back to the White House, few companies offer more upside than Baker Hughes right now.
JPMorgan Chase (JPM)
As one of the largest and most influential global banks, JPMorgan Chase (NYSE:JPM) should perform well no matter who occupies the Oval Office. But a Trump triumph in 2024 could provide particularly positive catalysts for the mega bank.
While Trump has a small personal stake in JPMorgan, this is unlikely to impact policy decisions much. Far more important is his preference for bilateral trade deals, reduced regulations, and historically low interest rates to stimulate growth. Lower interest rates actually tend to reduce bank profitability by compressing net interest margin, but can improve the debt service capacity of its customers, so it’s a double-edged sword.
However, I expect a surge in lending activity under Trump’s economic vision. This revenue growth could more than offset any margin deterioration for well-run banks like JPMorgan. Trump is also likely to be less-inclined to impose restrictive regulations on banks than his predecessors. And if an unlikely systemic crisis did threaten major banks, Trump has signaled a willingness to have the Federal Reserve intervene aggressively, as it did back in 2020.
With its diversified business mix spanning commercial and investment banking, asset management, and other segments, JPMorgan remains an indispensable pillar of the global financial system. While Trump’s views on interest rates concern some bank investors, I believe easing regulations and deal-making will outweigh pressures on net interest margins.
JPMorgan survived the Great Recession intact and entered the current robust economy in a position of strength. Betting against this financial powerhouse seems unwise, regardless of 2024’s electoral outcome.
Rumble (RUM)
A right-leaning video platform competing with the likes of YouTube, Rumble (NASDAQ:RUM) has seen tremendous growth since Trump joined the platform after post-bans from other mainstream social media sites. The company’s stock price reflects enthusiasm around another Trump presidential term, surging 75% year-to-date.
If Trump wins again, Rumble should continue benefiting from expanded brand awareness and user growth as it becomes the go-to video site for conservative voices. Trump would also likely pursue policies aimed at limiting the power of other big tech companies, creating an opening for Rumble to gain market share. While profitability remains elusive for now, Rumble’s revenue growth rate has remained at triple-digit levels, as user engagement booms.
With $267 million in cash and almost no debt, Rumble has years of runway to grow into its valuation. I’ll admit the company’s current valuation gives me a little vertigo. But in a scenario where Trump returns and his supporters flock to Rumble en masse heading into the 2024 election, speculative upside still exists here. This could become the platform of choice for an entire political movement.
Borr Drilling (BORR)
As an offshore driller operating specialized modern jack-up rigs, Borr Drilling (NYSE:BORR) would find smooth sailing under a second Trump term. With Trump promising to unleash domestic oil production, roll back regulations, and rehabilitate the wider fossil fuel industry, offshore drilling companies like Borr should have ample growth opportunities.
The company’s utilization rates already stand at 94% with full order books, as offshore drilling capacity remains scarce. Additionally, Borr has locked in future contracts at highly-favorable day rates as well, with upward rate momentum seeming likely to persist. Even if rates plateau, Borr is set to generate over $500 million of 2024 EBITDA, allowing for rapid de-leveraging and a continuation of capital return to shareholders. Notably, Borr also secured $82 million for three additional jack-up rigs, signaling more growth could be on the horizon.
That said, BORR stock trades at just 8-times 2024 estimated earnings, while analysts forecast ~30% revenue growth ahead. That’s too cheap for a quality name like this.
Seadrill (SDRL)
Another premier offshore driller, Seadrill (NYSE:SDRL) seems certain to prosper under a Trump administration bullish on resurrecting domestic oil production in unapologetic fashion.
Importantly, Seadrill just won $1.1 billion in new contracts from a Brazilian giant. It’s certainly not a leap to suggest that a president promising to greenlight drilling permitting could bring a gusher of new business domestically, too.
With the company’s earnings per share expected to recover from its decline in the years ahead, a Trump win provides added catalysts for Seadrill. The offshore industry desperately needs drilling capacity, and Seadrill now has a clean balance sheet (and substantial share buybacks) to entice investors to continue to put capital to work in this name.
Trading at bargain multiples relative to its potential earnings power, SDRL stock should regain its former glory if Trump throws his full weight behind offshore production. For shareholders willing to stomach commodity volatility, I believe Seadrill offers elite risk/reward here.
Ford Motor (F)
As an iconic American automaker, Ford (NYSE:F) seems poised for a comeback under a Trump presidency. Trump’s policies are likely to be much less hostile to internal combustion engine makers, focused more on improving the range of consumer choices on the market.
Rather than subsidizing EVs at the expense of traditional autos, Trump would likely let the market determine winning technologies. This levels the playing field for Ford to better compete with pure-play EV makers.
Ford’s core operations are strengthening too – its remarkable recovery since January suggests the UAW scandal is fading while momentum builds. With long-term earnings per share growth expected, Ford’s stock price appears to be severely undervalued at current levels.
Ford’s management team is already reassessing its aggressive EV push to avoid overextending the company’s balance sheet. I think this is a prudent move, and could be a timely one, if Trump wins the White House again. While EVs and hybrids remain critical to Ford’s future, Trump’s friendlier stance toward gas-powered vehicles should ease pressure on the company to abandon their EV ambitions entirely. That’s good for the company, and for the environment as well (one could argue).
Trading at just 7-times 2024 earnings with positive catalysts mounting, Ford seems ready to rev up and regain glory. Its proud legacy deserves preservation, and President Trump’s industry-agnostic policy preference could fuel a Ford comeback.
On the date of publication, Omor Ibne Ehsan 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.
