3 stocks to buy after the midterm elections

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After the midterm elections, it is clear that voters are rejecting extremist candidates from both sides, while moderates and independents are on the rise. This article discusses some key takeaways from the polls and 3 stocks that should prosper – Walmart (WMT), Expedia (XPE), and Northrop Grumman (NOC).

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It’s interesting that as the world becomes more connected, it seems to be becoming more and more unpredictable. We have had a series of recent elections that have turned against expectations, and the latest mid-term elections are no exception.

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In short, there were hopes of a huge ‘red wave’ that would push Republicans to take control of the House and Senate. Instead, it looks like a ‘red wave’ as Republicans are likely to take control of the House with a low majority, but fail to win the Senate. He also made gains among non-white voters and in states such as Florida and the Northeast Corridor due to the increasing prominence of issues such as crime and inflation.

However, Democrats also have reason for optimism. He fared better relative to particularly bleak expectations, keeping the Senate in mind. In fact, it was the best mid-term performance by an incumbent party since 2002. There was also a clear tendency for voters to reject candidates who refused the election. They also controlled several levels of government in states such as Colorado and Michigan.

The final conclusion is that this was a loss for the extremists on both sides and a victory for the more mainstream and moderates focused on bread and butter issues. As a result, we are likely to focus on areas of bipartisan support such as continued support for the war in Ukraine, increased fiscal discipline, and infrastructure, and be tough on China’s stance.

Here are 3 stocks that will thrive in this new political reality:

Expedia (XPE)

EXPE is one of the largest online booking companies in the world. It operates through several segments including Expedia, Vrbo, Hotels.com, Orbitz, Travelocity, and Wotif. In addition, it offers a range of travel and non-travel verticals including corporate travel management, airlines, travel agents, online retailers and financial institutions.

Like many travel stocks, EXPE is seeing a huge jump in revenue and bookings due to a drop in demand for travel. However, market concerns of a recession and a possible recession have led to a fall in the share price.

Thus, EXPE’s stock is down more than 50% from its all-time high in February of this year. Despite this, the stock’s earnings outlook remains strong. This year, analysts expect the company to earn $7 per share which will climb to $9 per share in 2023.

This combination of growth and value makes the stock very attractive. This is one of the major reasons why EXPE is rated B which is equivalent to Buy rating. The POWR rating is calculated by considering 118 different factors, each factor weighted to an optimal degree. B-rated stocks have posted an average annual performance of 21.1% which is well suited to the S&P 500’s average annual gain of 8.0%.

Click here to view EXPE’s full power rating.

Northrop Grumman (NOC)

NOC is a defense contractor with segments in aeronautics, mission systems, defense services and space systems. Like LMT, NOC has underperformed over the years. Since 2018, shares are up 4%, while the S&P 500 is up 58%.

This is despite lower interest rates and NOCs continuing to compound at an impressive rate. Given that its business continues to improve, NOC shares should be bought because it is quite attractive with a price-to-earnings ratio of 14 and an average dividend yield of 1.7%. In addition, defense spending is expected to increase marginally in 2021 and 2022, despite concerns that a democratic administration will choose other priorities.

Like the LMT, the NOC has a development component given its exposure to the space industry. Its subsidiary, SpaceLogistics LLC, completed the docking of Mission Extension Vehicle-2 to the Intelsat 10-02 commercial communications satellite to provide life-extension services. And, NOC is one of the leading companies in the expansion and servicing of in-orbit satellites.

Its latest earnings report shows that its underlying business continues to grow and mix as it tops expectations and raises its forecast for the full year. It delivered $6.42 per share in earnings, beating expectations of $5.75 per share. It marked its fourth straight quarter of beating earnings estimates. Revenue of $9.2 billion also topped expectations of $8.9 billion. It raised its full-year EPS forecast to $24.80 per share from an earlier $24 per share.

The combination of growth and value of NOC is certainly attractive. Thus, it should come as no surprise that NOCs have an overall B rating, which represents a purchase. The POWR rating is calculated considering 118 different factors, each factor weighted to an optimum degree. The average annual performance of B-rated stocks is 19.7%, which is in line with the S&P 500’s annualized performance of 7.1%. To view more power ratings of NOC, click here.

Walmart (WMT)

WMT is a retail giant that accounts for 3.1% of all consumer spending in the US. The company was an innovator in terms of discounting and manufacturing a logistics and fulfillment that disrupted the entire industry.

These efforts continue today, as evidenced by its rapidly growing e-commerce business and the launch of Walmart Plus, which aims to keep the company competitive with Amazon (AMZN) and other upstarts. It has also successfully expanded into groceries which is one of the fastest growing parts of its business. The recent supply chain disruptions due to the pandemic have posed their own challenges with many retailers unable to fully stock stocks, resulting in revenue falling short of their target. Walmart was able to avoid this issue because the company leased its ships from Asia and placed its orders in advance to ensure that it would be able to meet the needs of its customers during the holiday season.

Walmart is also a great defensive stock. During periods of inflation, consumers tend to prioritize price and wholesale which means it sees more foot traffic. Similarly, it also sees an increase in activity during periods when the economy slows down due to their low prices.

As a result, the company has consistently grown its revenue, earnings, free cash flow, margin and dividend over several years and has successfully navigated the supply chain through challenges related to the Great Recession, tariff wars and the recent pandemic. disruption and labor shortage.

In 2022, Wall Street is forecasting a 17% increase in EPS to $6.41, which correlates to a forward P/E of 21.6. Currently, Wall Street analysts have a price target of $172 on the stock, which means up 19%.

WMT has an overall A rating, which translates into a strong buy in our POWR rating system. The stock has strong grades across multiple categories, including growth and value. It is also the 3rd ranked stock in the Grocery/Big Box Retailers industry. To view WMT’s complete POWR rating, click here.

9 “Must Have” Growth Stocks

What makes them “own”?

All 9 picks have strong fundamentals and are experiencing tremendous momentum. They also contain a winning mix of growth and price characteristics that generate a catalyst for serious outperformance.

Even more important, each recently earned a Buy rating from our prestigious POWR rating system, where A rated stocks have gained +31.10% in one year.

Click below to see these top-performing stocks with exciting growth prospects now:

9 “Must Have” Growth Stocks

Shares of WMT closed Friday at $142.58, up $0.22 (+0.15%). Year-on-year, the WMT is down -0.29%, while the benchmark S&P 500 index has gained -15.12% during the same period.

About the Author: Jaimini Desai

Jaimini Desai has been a financial writer and reporter for almost a decade. Their goal is to help readers identify risks and opportunities in the markets. He is the chief growth strategist at StockNews.com and editor of the POWR Growth and POWR Stocks Under $10 newsletters. Learn more about Jaimini’s background, with links to her latest articles.

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