Which stocks to choose in light of the elections

An analysis by BÖRSE ONLINE, Martin Hintze | Promotional communication

US President Donald Trump continues to move investors - even if the political development in the USA has taken a backseat after the failed impeachment process and due to the economic upheaval caused by the corona virus. The renowned Sentix political barometer recently said: "The values ​​[for Trump] have been climbing significantly since the summer, and for the first time we are now measuring a largely positive influence." The partial agreement in the trade dispute with China is probably one reason for this. Another said that the end of the impeachment process made re-election of the current president more likely. David Older, fund manager at Carmignac, notes that market participants are currently expecting a second term for Donald Trump - "and they are happy with that". However: The upcoming US presidential elections are causing uncertainty, because a lot can still happen until November 3rd.

But the prices on the US stock exchanges could develop positively overall, because: "Trump will do everything in the election year to support the economy and the stock market," says capital market expert Michael Keppler. It is not for nothing that the president boasts of success data - which, however, can sometimes be far removed from any reality, such as the value increases in pension savings plans of "60, 70, 80, 90 and even 100 percent" that Trump has proclaimed. After all, the S&P 500 share index has increased by more than 40 percent since he took office. That is less than under his Democratic predecessors Barack Obama and Bill Clinton, but it is doing well. And that, although observers point out that Trump is not the cause of the stock market boom, but cheap money and investors' hunt for investment opportunities.

The prospects for 2020 are good. Alan Berro from Capital Group makes it clear: "In the election years since 1932, US stocks have always risen - regardless of whether a Republican or a Democrat moved into the White House." increased significantly. For investors, this means: Classics and large companies offer somewhat greater stability. Potential price winners include stocks like Amazon, which benefits from its undisputed market position, and Microsoft as an IT group with strong cash flow, respectable dividends and robust profit growth. Then there is the technology giant Nvidia, which thrives on the sustained high and possibly increasing demand for graphics and specialty chips, and the consumer goods giant Procter & Gamble, which is making good profits given the strong demand, especially from US consumers.

Another favorite: the financial company Moody's. The rating agency senses the uncertainty of investors looking for additional information about possible investment candidates. This helps the company, which also offers software for risk management, and is reflected in a generous margin of almost 30 percent. Investors, for whom the uncertainties of the US election predominate, may be tempted to resort to physical gold. An interesting alternative is the Newmont Goldcorp, which also mines silver, copper and zinc. The figures for the past financial year were excellent: net profit reached 2.88 billion US dollars (the equivalent of around 2.66 billion euros) and thus 658 percent more than in 2018.

That leaves Carmax and Copart. Carmax is the largest US used car dealer and is now entering the new vehicle business. The Americans' unchecked consumerism is playing into the cards for the company. Strong figures and good forecasts from analysts with an average expectation of twelve percent profit growth over the next five years make the stocks interesting. The goals of the technology company Copart, which also deals in used cars - online are even more ambitious. The year-round increase in sales was most recently 18.6 percent worldwide, profits rose by 24.8 percent, and the margin reached a lush 45.2 percent. Surprising facts: Copart owns land the size of Norderney and Langeoog and transports around 250,000 vehicles a day.

Investors do not need to be unsettled by the noise surrounding the US elections. However, you should always keep in mind that by buying American securities you are bringing a currency risk into your portfolio. Otherwise it is important to keep calm. Because what is the writer Mark Twain supposed to have said once? "If elections changed something, they would have been banned long ago."

Amazon

  • ISIN US0231351067
  • Current price: € 1,746.99
  • PER * (2020): 69.0
  • Earnings / share (2020 **): € 26.33
  • Dividend (2020 **): € 0.00
  • Dividend yield (2020 **): 0.0%

Carmax

  • ISIN US1431301027
  • Current price: € 81.08
  • PER * (2020): 16.5
  • Earnings / share (2020 **): € 5.20
  • Dividend (2020 **): € 0.00
  • Dividend yield (2020 **): 0.0%

Copart

  • ISIN US2172041061
  • Current price: € 79.75
  • PER * (2020): 32.0
  • Earnings / share (2020 **): € 2.79
  • Dividend (2020 **): € 0.00
  • Dividend yield (2020 **): 0.0%

Microsoft***

  • ISIN US5949181045
  • Current price: € 149.93
  • PER * (2020): 29.7
  • Earnings / share (2020 **): € 5.20
  • Dividend (2020 **): € 1.86
  • Dividend yield (2020 **): 1.2%

Moody's

  • ISIN US6153691059
  • Current price: € 228.10
  • PER * (2020): 29.2
  • Earnings / share (2020 **): € 9.03
  • Dividend (2020 **): € 2.28
  • Dividend yield (2020 **): 0.9%

Newmont Goldcorp

  • ISIN US6516391066
  • Current price: € 44.30
  • PER * (2020): 25.4
  • Earnings / share (2020 **): € 1.92
  • Dividend (2020 **): € 0.56
  • Dividend yield (2020 **): 1.2%

Nvidia ****

  • ISIN US67066G1040
  • Current price: € 230.05
  • P / E * (2020): 41.4
  • Earnings / share (2020 **): € 5.79
  • Dividend (2020 **): € 0.64
  • Dividend yield (2020 **): 0.3%

Procter & Gamble ***

  • ISIN US7427181091
  • Current price: € 106.40
  • P / E * (2020): 24.2
  • Earnings / share (2020 **): € 4.94
  • Dividend (2020 **): € 2.99
  • Dividend yield (2020 **): 2.5%

* P / E: price-earnings ratio; ** forecast; *** Fiscal year end June 30th; **** End of fiscal year January 31; Foreign currencies converted into euros; Status: February 28, 2020

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