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Make sure you read all of this month’s special feature coverage leading up to President Trump’s First 100 Days here.

We’ve been taking a deep dive into President-elect Trump’s upcoming first 100 days, what Trump may or may not have planned, which of those plans he may or may not be able to actually pull off, and how markets may or may not react to all of that. It’s all pretty rank speculation, for the most part, but speculation that could pretty clearly end up playing a huge role in how one’s portfolio looks in the coming months and years.

Now, it’s time to try and move past theory some and start looking at which companies appear to be in the best position heading into Trump’s inauguration. Now, as is always the case when discussing specific stocks, there’s no real way of knowing what the future holds for any particular company. However, that doesn’t mean that we can’t look at which companies the market has pre-selected in its own way. The companies that have seen a bigger bounce since election day are clearly those that investors and traders expect to be expanding in the near future.

So, while there’s clearly a risk that things don’t play out as expected, or even that the improved prospects for these players are already priced in, at the moment these companies appear to be positioned to be major winners in a Trump economy.

Infrastructure Spending Could Juice Industrials, Materials

One central piece of Trump’s stated plan for what his administration would be focused on has been big growth in infrastructure spending, and the results among a number of industrial and materials stocks have demonstrated that. In particular, steel companies, mining companies, and construction equipment makers have seen a solid bounce.

Steel Companies

Company

Market Cap

Returns since 11/9/16

Mechel PAO (MTL)

$1.70 billion

28.25%

AK Steel Holding Company (AKS)

$3.07 billion

65.90%

United States Steel Corporation (X)

$5.94 billion

66.84%

Steel Dynamics (STLD)

$9.03 billion

30.73%

Timkensteel Corp. (TMST)

$647.41 million

34.78%

Company in Focus: US Steel

Nothing says throwback like US Steel, a company whose earliest incarnations included Andrew Carnegie’s massive steel monopoly in the midst of the Gilded Age. However, the planned expansion of infrastructure spending and a potential for big tariffs on steel imports has things looking up for US Steel, a company still trading at less than half its pre-2008 valuation.

“…we believe Trump’s plans for infrastructure spending and trade protection, as two of the most digestible of his proposals, could be early in the queue,” Morgan Stanley (MS) analyst Evan Kurtz wrote in a note to clients. “These policies should benefit the U.S. steel industry by both adding to demand and curbing import supply.”

“We conservatively estimate Trump’s $550 billion stimulus plan would increase steel demand by 20% annually for five years,” Kurtz also wrote. “We calculate an incremental 22 million tons of demand in each year the program is in effect.”

Farm & Construction Machinery

Company

Market Cap

Returns since 11/9/16

Manitowoc Company (MTW)

$817.23 million

47.29%

Terex Corporation (TEX)

$3.31 billion

34.46%

Deere & Company (DE)

$33.06 billion

18.26%

CNH Industrial (CNHI)

$12.00 billion

21.10%

AGCO Corporation (AGCO)

$4.93 billion

21.19%

Company in Focus: Manitowoc Company

The Manitowoc Company is in the crane business, manufacturing large cranes and, get this, crane-related products. That’s something of a cyclical industry that relies, heavily, on plenty of construction and other economic growth. As such, considerable investment in infrastructure could mean plenty of good things for Manitowoc.

“Donald Trump’s pledge to spend around $1 trillion to fix highways, bridges, airports, schools and hospitals is a key catalyst for the company moving forward,” writes Leverage Equity Research. “Following the election results on November 8th, Manitowoc’s stock has jumped 25%. With Obama signing the Fixing America’s Surface Transportation Act or ‘FAST Act’ in late 2015, and Trump’s new infrastructure spending plan, there are several great positive signals for the heavy lifting equipment company moving forward.”

General Building Materials

Company

Market Cap

Returns since 11/9/16

Griffon Corporation (GFF)

$1.09 billion

44.74%

GMS Inc. (GMS)

$1.20 billion

35.81%

Headwaters Inc. (HW)

$1.73 billion

30.51%

Martin Marietta Materials (MLM)

$14.16 billion

11.58%

Apogee Enterprises (APOG)

$1.61 billion

36.03%

Financials

The plans to roll back portions (or all) of the Dodd-Frank Act has meant big returns for some of the biggest banks. Since Dodd-Frank only affects the larger banks, they’re among the biggest gainers. Particularly those involved in investment banking, as investors appear to be convinced that the Volcker Rule restricting prop trading by big banks is both not long for this world and restricting earnings significantly.

Image via Alex Proimos/Flickr CC

Investment Brokerage – National

Company

Market Cap

Returns since 11/9/16

Goldman Sachs Group (GS)

$89.90 billion

28.78%

Nomura Holdings (NMR)

$23.17 billion

23.57%

Morgan Stanley (MS)

$77.23 billion

25.69%

TD Ameritrade (AMTD)

$24.09 billion

35.34%

Charles Schwab Corp. (SCHW)

$53.06 billion

26.80%

Company in Focus: Morgan Stanley

Lifting Dodd Frank restrictions is most likely going to benefit investment banks the most, and particularly the big ones. Morgan Stanley is among the biggest, most established investment firms out there, and there are plenty of reasons to think they would benefit should portions of Dodd Frank get rolled back.

“Like Goldman Sachs – and unlike more conventional banks such as Bank of America (BAC) – Morgan Stanley derives a large portion of its revenues from its investment banking business,” writes Black Coral Research. “In this case, nearly 80% of Morgan Stanley’s revenue come from what might be considered risk-taking or investment banking activities, unlike Goldman Sachs, which has been pursuing more traditional banking activities of late and which derives roughly half of its revenues from similar activities. Indeed, even if we strip out Morgan Stanley’s Asset Management revenues from the equation, investment banking and trading account for roughly 50% of its revenues – making it similar to Goldman Sachs.”

“Morgan Stanley, like Goldman Sachs and other entities such as JP Morgan (JPM) and Citigroup (C) recently petitioned the Federal Reserve for a five-year deferment of the Volcker Rule, the sections of the Dodd-Frank Act that effectively prevents banks from engaging in proprietary trading,” they continue. “This action will be rendered superfluous if Trump’s FSPI succeeds in its efforts. Success on this front would essentially preserve 50% of Morgan Stanley’s revenue base that it would otherwise have had to wind down in favor of lesser ‘market making’ activities for its clients.”

Energy Stocks Buoyed by Promised Regulatory Changes, Opening of Federal Lands

The love affair between the Trump administration and domestic oil and gas production hasn’t exactly been subtle. If working it into his stump speeches on the campaign trail didn’t sell you, hailing Rex Tillerson as his Secretary of State should seal the deal. As such, the rally for oil and gas companies has been significant. How much of that is optimism about the supply glut getting worked through next year and prices bouncing back and how much is expectations for higher earnings due to a friendlier administration? Hard to say for sure, but the bulls are firmly in the driver’s seat for the time being.

Independent Oil & Gas

Company

Market Cap

Returns since 11/9/16

Bonanza Creek Energy (BCEI)

$187.21 million

185.71%

Magellan Petroleum Corporation (MPET)

$91.98 million

160.90%

Sanchez Energy Corp. (SN)

$1.04 billion

96.75%

California Resources Corp. (CRC)

$863.49 million

87.01%

EP Energy Corp. (EPE)

$1.49 billion

70.10%

Company in Focus: Sanchez Energy Corp.

Sometimes when it rains, it pours. And then sometimes, you’re in the middle of a big stock rally sparked by the election of Donald Trump and, just as it’s cresting, you partner with Blackstone Group (BX) to close a huge deal to acquire a bunch of new assets in the Eagle Ford shale from Anadarko Petroleum (APC) at a price that investors like so much they send your stock soaring another 53% over the next few days. Sanchez is a very, very speculative play, so only the steely-nerved should apply, but if you’re looking for an independent producer with huge upside to play the potential upswing for energy companies, the Eagle Ford acquisition might make Sanchez one to consider.

“This transaction is transformative for Sanchez Energy. It significantly increases the company’s size and scale, and provides it with a clear path for growth while allowing it to live within cash flow at current commodity prices,” writes Matthew DiLallo for the Motley Fool. “That puts the company on pace to create tremendous value for investors as it uses its improved scale to get the most out of the combined resource position.”

Oil & Gas Pipelines

Company

Market Cap

Returns since 11/9/16

Noble Midstream Partners (NBLX)

$1.48 billion

41.18%

JP Energy Partners (JPEP)

$370.21 million

34.27%

Crestwood Equity Partners (CEQP)

$1.95 billion

37.63%

American Midsteam Partners (AMID)

$549.77 million

29.41%

Targa Resource Corp. (TRGP)

$11.17 billion

27.82%

Oil & Gas Drilling and Exploration

Company

Market Cap

Returns since 11/9/16

Ocean Rig UDW (ORIG)

$147.83 million

72.00%

Torchlight Energy Resources (TRCH)

$86.76 million

57.46%

W&T Offshore (WTI)

$430.52 million

125.53%

Transocean (RIG)

$5.63 billion

55.32%

Unit Corporation (UNT)

$1.32 billion

46.28%

Company in Focus: W&T Offshore

I mean, it has to be a good sign for a company drilling for American oil to have WTI for a ticker, right? Either way, offshore drillers are facing some of the biggest potential for improving their situation under a new president. Regulations have been tight on offshore drillers, and easing them while also opening up new offshore regions could be a real boon to a segment that’s been struggling of late.

“W&T offshore is a decent company that has been pulling the correct levers to strengthen the balance sheet and survive a ‘lower for longer’ oil price scenario,” writes Doren Xia on Seeking Alpha. “Post bond exchange, the company has over $70 M cash, no revolver debt, minimal interest expense and no debt maturities until 2019. While government regulations in combination with low oil prices have been holding this company down for quite some time, a Trump presidency should help gulf of Mexico drillers to the tune of ~$10/bbl. This by itself is equal to what analysts predict will happen should OPEC cut production to 32.5- 33 million bbl/day. With heavy insider ownership, rising bond prices and dilution from the recent debt for equity swap already factored in, now may be the time to buy. For those willing to ride out OPEC and presidential volatility, W& T offshore is a worthy long-term investment.”

Image via iphonedigital/Flickr CC

Offshore Cash Holdings

While not necessarily drawing specifically from market returns, promises to declare a tax holiday on cash held offshore should make any companies holding a lot of foreign assets ones to keep an eye on. The chance to bring that money back to the United States could mean a major acquisition or a pretty hefty stock buyback. Returns remain somewhat mixed for these companies, so it appears the markets remain dubious about the prospects of this happening, or at least about how much shareholder value exists in repatriating earnings held offshore. That said, if Congress does manage to pass a tax package that includes a one-time teaser rate to attract offshore capital, these companies could be in for a boost.

Company

Market Cap

Cash held offshore

Apple (AAPL)

$635.97 billion

$181.1 billion

General Electric (GE)

$275.48 billion

$119 billion

Microsoft (MSFT)

$484.64 billion

$108.3 billion

Pfizer (PFE)

$191.62 billion

$74 billion

IBM (IBM)

$159.12 billion

$61.4 billion

Company in Focus: Apple

It’s hard to imagine that, if given the chance to pay a one-time 4.5% tax rate on offshore capital coming home, Apple wouldn’t take much (or most) of that cash held overseas and bring it back to the United States. In addition, a lower corporate tax rate stands to benefit the world’s most valuable company.

“AAPL stands to benefit from repatriation of foreign cash and tax reform,” wrote Greenlight Capital’s David Einhorn in his Q4 2016 investor letter. “The company has over $200 billion in offshore cash it could bring back to the U.S. AAPL also derives a majority of its earnings from foreign sources but still accrues GAAP taxes at a 25% rate, which is higher than many other large tech companies. The lower corporate tax rates proposed as part of repatriation and tax reform could therefore lead AAPL toward a structurally lower GAAP tax rate going forward.”

Of course, the question then becomes what Apple would DO with this massive new domestic cash haul. The sexy, fun speculation would be that they’ll buy Netflix (NFLX) or Tesla (TSLA) or something. More realistically, it would probably mean a bunch of boring old stock buy backs that won’t make great headlines but would be pretty great for anyone holding the stock.


Keep coming back for the rest of this month as we continue to explore what, exactly, is in store for markets under the new Trump administration. Be sure to read: