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Election 2020

Biden vs. Trump Stock Ideas

The 2020 election is heating up and the outcome of the presidential race will likely have an impact on public equities. Our comprehensive review of the Biden-Harris and Trump-Pence platforms identified several investable themes that go beyond the obvious.

The results are featured in our 2020 Election Dashboard and two guides: 

Scroll down to view the dashboard, read more about the investable themes for each campaign or register for our Election 2020 Stock Ideas Webinar on October 29.

Election 2020 - LinkedIn Paid

 

The Dashboard

2020 Election Dashboard

Sentieo customers can access this dashboard in the platform. If you're not currently a customer, but would like to use this dashboard, you can sign up here to start your free trial today.

Sentieo U.S. Election 2020 Dashboard

 

Biden-Harris

Higher Education

The Biden-Harris platform targets making colleges and universities tuition-free for families with incomes under $125,000 (just like the NY State program), in addition to numerous other initiatives for two-year colleges, grants, income-based repayments, and loan forgiveness for individuals pursuing a public sector career.

Get the Biden-Harris Report

Biden Harris Higher Edu

 

Trump-Pence

Police Funding

In addition to the famous “less lethal” Tasers, Axon has seen strong growth in its body and police vehicle cameras, and evidence management solutions (effectively, cloud services), in addition to recently released innovations, like transcriptions. Pew reports that only 31% of the smaller police departments use body cams. Axon’s stock has done well in the last two years, powered, in part by substantial NTM EV/EBITDA multiple expansion. 

Get the Trump-Pence Report

0920 Election 2020 Trump Police Funding

 

Biden-Harris

Cannabis Decriminalization

The current state of the public equity markets in the cannabis space is somewhere between disgust and revulsion. We can see it in the 75% drop in aggregate market capitalization of four of the top players in the space: Canopy Growth, Aurora Cannabis, Tilray, and Cronos.

Get the Biden-Harris Report

0920 Election 2020 Biden Cannabis

 

Trump-Pence

Private Prisons

The 2016 volatility in CXW and GEO is clearly visible in the price chart below. Going into this election cycle, people and groups associated with CXW and GEO have been active in terms of contributions, mostly to Republicans, and have been signing long-term contracts with federal agencies.

Get the Trump-Pence Report

0920 Election 2020 Trump Prisons

 

Biden-Harris

Caregiving

The Biden-Harris plan also envisions tax credits and extensive staff training. We think that a likely beneficiary of this would be Bright Horizons (NYSE: BFAM), a publicly traded provider of childcare services. Even with the lockdowns, BFAM managed to have positive net income, which we view as a proof for the strength of the model.

Get the Biden-Harris Report

0920 Election 2020 Biden Caregiving

 

Trump-Pence

Credit Reporting

The two credit reporting plays, Fair Isaac (NYSE: FICO) and Equifax (NYSE: EFX), have seen substantial P/E multiple expansion over the last few years which is why we see the “status quo” as important. A public competitor would likely lead to substantial shrinkage in valuation as investors would look at the market share of the de-facto public mortgage giants, “Fannie and Freddie”, as a guide.

Get the Trump-Pence Report

0920 Election 2020 Trump Credit Reporting

 

Biden-Harris

Rural America

What really caught our eye is the combination of increased investment in ethanol and “next generation” biofuels and materials along with a microloan new farmer program, plus increased USDA ownership/operation funding. We believe that this combination of increased domestic demand and better access to funding will be a positive for agricultural equipment and fertilizers: specifically, we like Deere & Company (NYSE: DE) and Nutrien (NYSE: NTR), formed a few years ago by the merger of Agrium and PotashCorp.

Get the Biden-Harris Report

0920 Election 2020 Biden Rural America

 

Trump-Pence

Pipelines

A Biden administration is likely to end at least the “step up” advantage (or loophole, if you prefer), as outlined in this Tax Policy Center analysis. We see pipelines as more attractive under an explicitly tax-, pipeline- and hydrocarbon-friendly president: our choice here is the industry index ETF, Alerian MLP ETF (NYSE: AMLP).

Get the Trump-Pence Report

0920 Election 2020 Trump Pipelines

 

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