With the US 2020 election results still being counted, Wall Street analysts continue trying to determine which stocks will perform better, depending on which party controls the White House and the Senate.
Though the outcome of yesterday’s elections is far from certain, strategists believe on average that a re-election for President Donald Trump would favor growth stocks while a win for Democrat and former Vice President Joe Biden could juice cyclical value equities.
Since we don't yet know the outcome of this hotly contested, and still-tight race, we've put together a list of three stocks which, in our view, are long-term buys no matter who wins. Any potential downturn in the post-election scenario, triggered by political uncertainty or by strict measures put in place to control the spread of the virus, will present a buying opportunity for investors sitting on the sidelines holding cash.
1. Amazon
Amid the ongoing spread of the COVID-19 pandemic, the global e-commerce industry is going through an unprecedented surge. No other company is better positioned to take advantage of this shift than online retail powerhouse, Amazon.com (NASDAQ:AMZN).
During the past week, Amazon projected a steep jump in sales in the current quarter, indicating the retailer expects the surge in online shopping to continue during the pandemic and beyond. Amazon has benefited immensely during the pandemic as people shopped online, stocking up on an array of goods from electronics to groceries.
Benchmark analyst Daniel Kurnos, while raising his share-price target to $3,800 from $3,675 for the retail giant, wrote in a note cited by Bloomberg that he sees “unabated, unprecedented e-commerce demand” from consumers. The Seattle-based e-tail giant should represent “a material share gainer this holiday period,” he said.
J.P. Morgan analyst Doug Anmuth also reiterated his overweight rating on Amazon in a recent note, saying AMZN remains his "top idea,” with the 12-month price target of $4,050. Amazon stock is down 15% since reaching a record high on Sept. 2. Shares closed on Tuesday at $3048.41, up 1.46%.
2. Nike
The world’s largest sportswear maker, Nike (NYSE:NKE) is a great dividend stock to own during times of political and economic uncertainty. The company is emerging stronger from the global health crisis as it benefits from investments it made in e-commerce.
Successful execution of its online strategy, an appealing product-mix and the global reach of its brand have positioned Nike to deal with disruptions caused by the store closures and lockdowns.
During the last quarter, Nike’s online sales soared 83% when compared with the same period a year ago. The company kept introducing new products during this period, including its first dedicated maternity collection and a new yoga line. Sales of women’s apparel, Nike’s main growth area, also accelerated.
These strengths certainly show that Nike is a stock to buy no matter who wins the election as the company is in a strong position to perform well even when the sailing gets rough.
Nike shares are up more than 20% for the year. The stock gained 1.80% during Monday's trade, to close at $124.59. There's much more potential to the upside for the stock once the pandemic is contained and political stability returns.
3. Netflix
Netflix (NASDAQ:NFLX) is another strong name to add to your portfolio now that its shares have become 19% cheaper during this market turmoil. The stock of this streaming entertainment giant has proven to be one of the best stay-at-home trades as people indulge in binge-watching on their streaming apps.
The pandemic has also pummeled its newest competitors—Disney (NYSE:DIS) and AT&T (NYSE:T)—diminishing their abilities to challenge Netflix. On the back of this favorable environment, the Los Gatos, Californian-based company was able to hike its prices last week, betting subscribers are willing to pay more for a huge library of shows and movies as they continue to work and study from their homes.
Netflix is a stock to hold over the long-run, given the company’s expanding international reach, where any meaningful competition is still lagging considerably. Netflix added 2.2 million net subscribers in the third quarter.
This growth came after two quarters of robust expansion, during which the streaming service added nearly 26 million net subscribers—almost as many as for the entirety of 2019.
After surging more than 60% during the year, Netflix has shed some of its value in recent weeks, opening up an opportunity to buy. On Monday, its shares closed at $484.12, down from a record high of $575.37 they reached in July.