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3 Stocks Back In Play After U.S.-China Trade War Stalls
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On Sunday, the U.S. and China put trade tensions aside in hopes of reaching a stable and broad trade agreement. With previously at-risk stocks beginning to rise, there seems to be room for profit in these formerly questionable markets. Read on for three stocks that investors should reconsider as the trade war is put on hold.
Stocks to Buy
Norbord , a manufacturer of wood-based panels, is the first company investors should keep on their radar. Earlier this year, the U.S. had enacted a 25% tariff on imported steel and 10% tariff on imported aluminum. Between President Trump’s announcement and enactment of Tariffs in late February through mid-March, many construction companies reliant on steel for everyday processes were thought to fail.
Other construction companies, such as Norbord—a Canadian company that could have been caught in the crossfire if tariffs on other imported goods were imposed, were thought to be the hardest hit, reflective of the company’s Zacks Rank #4 (Sell) at the time. Still, Norbord continued to thrive, with shares increasing 25% from March 1 to date.
Recently, things have become even more bullish for OSB. Current-quarter and next-quarter EPS estimate revisions have seen 100% agreement to the upside, pushing the company to a Zacks Rank #1 (Strong Buy).
On top of this, OSB could considered a great value stock. The company currently sports a P/E ratio of 9.2 and cash flow of $5.74 per share, which compares favorably to industry averages of 23.2 and $3.17 per share.
Boeing (BA - Free Report) was another company thought to struggle in the face of trade tensions. From late February to late March, share prices dropped 11%, largely due to the Chinese government’s announcement that it may order planes from Boeing’s largest international competitor, Airbus. Boeing was also considered to be in the crosshairs of Chinese retaliation to new U.S. tariffs.
But since this point in late March, shares have rebounded 14% to date. The company is currently a Zacks Rank #2 (Buy) and a strong growth stock. With proven historical cash flow growth and a current cash flow growth of an astonishing 37%, the company deserves its “A” grade in the Growth category of our Style Scores System. Boeing also sports a net margin of 9.6%, more than double the industry average of 3.9%.
Stocks to Reconsider
While investors might consider buying these stocks, options such as Zimmer Biomet Holdings (ZBH - Free Report) , have potential but are not as clear cut. The medical company saw massive drops in March due to its Chinese ventures and the risk of retribution to U.S. tariffs. During this time period, Zimmer was a Zacks Rank #5 (Strong Sell).
Since this point, the company has risen to a Zacks Rank #3 (Hold). Zimmer’s share prices had steadily been decreasing before looming trade wars were present, and ultimately were aggravated by threats to U.S.-Chinese relations. Since early April, the stock has fought back slightly, increasing 7.4%.
The company’s “B” grade for Value in our Style Scores comes from a drop in share prices relative to a lowering of guidance released in its Q1 earnings report. But when Zimmer’s P/B, P/CF, and P/E ratios are now trading at massive discounts to their industry averages, so we can that this drop has brought the stock to an interesting value territory.
Considering the trade war stall, this could be a stock that bounces back and continues to see improvements in share prices. But investors should be worried about continued tension and U.S. action, which would most likely result in fresh volatility.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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3 Stocks Back In Play After U.S.-China Trade War Stalls
On Sunday, the U.S. and China put trade tensions aside in hopes of reaching a stable and broad trade agreement. With previously at-risk stocks beginning to rise, there seems to be room for profit in these formerly questionable markets. Read on for three stocks that investors should reconsider as the trade war is put on hold.
Stocks to Buy
Norbord , a manufacturer of wood-based panels, is the first company investors should keep on their radar. Earlier this year, the U.S. had enacted a 25% tariff on imported steel and 10% tariff on imported aluminum. Between President Trump’s announcement and enactment of Tariffs in late February through mid-March, many construction companies reliant on steel for everyday processes were thought to fail.
Other construction companies, such as Norbord—a Canadian company that could have been caught in the crossfire if tariffs on other imported goods were imposed, were thought to be the hardest hit, reflective of the company’s Zacks Rank #4 (Sell) at the time. Still, Norbord continued to thrive, with shares increasing 25% from March 1 to date.
Recently, things have become even more bullish for OSB. Current-quarter and next-quarter EPS estimate revisions have seen 100% agreement to the upside, pushing the company to a Zacks Rank #1 (Strong Buy).
On top of this, OSB could considered a great value stock. The company currently sports a P/E ratio of 9.2 and cash flow of $5.74 per share, which compares favorably to industry averages of 23.2 and $3.17 per share.
Boeing (BA - Free Report) was another company thought to struggle in the face of trade tensions. From late February to late March, share prices dropped 11%, largely due to the Chinese government’s announcement that it may order planes from Boeing’s largest international competitor, Airbus. Boeing was also considered to be in the crosshairs of Chinese retaliation to new U.S. tariffs.
But since this point in late March, shares have rebounded 14% to date. The company is currently a Zacks Rank #2 (Buy) and a strong growth stock. With proven historical cash flow growth and a current cash flow growth of an astonishing 37%, the company deserves its “A” grade in the Growth category of our Style Scores System. Boeing also sports a net margin of 9.6%, more than double the industry average of 3.9%.
Stocks to Reconsider
While investors might consider buying these stocks, options such as Zimmer Biomet Holdings (ZBH - Free Report) , have potential but are not as clear cut. The medical company saw massive drops in March due to its Chinese ventures and the risk of retribution to U.S. tariffs. During this time period, Zimmer was a Zacks Rank #5 (Strong Sell).
Since this point, the company has risen to a Zacks Rank #3 (Hold). Zimmer’s share prices had steadily been decreasing before looming trade wars were present, and ultimately were aggravated by threats to U.S.-Chinese relations. Since early April, the stock has fought back slightly, increasing 7.4%.
The company’s “B” grade for Value in our Style Scores comes from a drop in share prices relative to a lowering of guidance released in its Q1 earnings report. But when Zimmer’s P/B, P/CF, and P/E ratios are now trading at massive discounts to their industry averages, so we can that this drop has brought the stock to an interesting value territory.
Considering the trade war stall, this could be a stock that bounces back and continues to see improvements in share prices. But investors should be worried about continued tension and U.S. action, which would most likely result in fresh volatility.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>