MW These stocks could benefit from Trump's election victory, B. Riley says
By James Rogers
Trump's victory could benefit a host of stocks from sectors such as coal mining, fintech, cryptocurrency and for-profit education, says B. Riley Securities
Republican Donald Trump's election victory over Democrat Kamala Harris could boost stocks in a number of sectors, according to investment bank B. Riley Securities.
Trump will be only the second U.S. president to serve nonconsecutive terms after clinching victory Tuesday. His win caps a remarkable comeback after he lost the 2020 election to Joe Biden.
In a recent note, B. Riley identified a number of stocks from sectors such as coal mining, fintech, cryptocurrency and for-profit education that could benefit under a Trump administration.
Related: 'DJT' stock jumps as former President Trump wins election
In the note, which was released last month, B. Riley analyst Lucas Pipes said that a Trump win could "signal a favorable environment for traditional fossil fuels, particularly coal, due to anticipated deregulation and increased domestic production support." The analyst pointed to Peabody Energy Corp. (BTU), Consol Energy Inc. $(CEIX)$, Arch Resources Inc. (ARCH) and Hallador Energy Co. $(HNRG)$ as benefiting the most from potential policy changes. "Key regulatory actions, such as reconsidering the coal leasing ban in the Powder River Basin, would provide long-term advantages to [Peabody Energy] and [Arch Resources], two companies with significant operations in the region," Pipes added.
The analyst also said that Hallador Energy, with its coal-powered power plant and an anticipated strong demand for electricity, stands to gain if there is a rollback of the Clean Power Plan, easing emissions restrictions on coal-based energy generation. Peabody Energy is B. Riley's single best idea.
Peabody Energy's stock is up 6.4% Wednesday, while Consol Energy is up 5.3%. Arch Resources is up 5% and Hallador Energy is up 11.8%, putting the stock on pace for its biggest daily percentage gain since Sept. 25, when it rose 19.1%.
Related: Phunware's stock soars on Donald Trump's election victory
In stark contrast, renewable-energy stocks tumbled Wednesday following Trump's win.
B. Riley also thinks that fintechs could benefit from the regulatory environment of a Trump administration, with analyst Hal Goetsch highlighting Dave Inc. (DAVE), MoneyLion Inc. (ML) and Sezzle Inc. (SEZL) as potential beneficiaries. MoneyLion is B. Riley's single best idea. Shares of MoneyLion are up 5.8% Wednesday, while Dave is up 10.3% and Sezzle is up 6.3%.
MARA Holdings Inc. $(MARA)$, which engages in mining cryptocurrencies, could be another winner, with B. Riley citing the company's position as the largest bitcoin miner in the U.S. "During his 2024 campaign, Trump has been a strong advocate for cryptocurrency and pledged to make the U.S. the 'crypto capital of the planet' and the 'Bitcoin superpower of the world,'" analyst Lucas Pipes wrote in the note.
Related: Renewable-energy stocks tank after Trump wins White House
Crypto stocks have soared Wednesday following Trump's victory, with MARA Holdings shares up 7.2%. Bitcoin (BTCUSD) also hit a record high in the wake of the election result.
B. Riley also points to small-cap for-profit education providers Universal Technical Institute Inc. $(UTI)$ and Lincoln Educational Services Corp. $(LINC)$ as well-positioned for a Trump White House. "The Republicans have typically been far more supportive of for-profit education sector than the Democrats have," wrote B. Riley analyst Raj Sharma. "We expect a Trump win would inject more life into these names."
Universal Technical Institute's stock is up 10.3% Wednesday, while Lincoln Educational Services is up 12.1%.
Related: Banks and Tesla lead list of top-performing stocks following Trump's victory
Business-development company FS KKR Capital Corp. (FSK) is another of the names on the bank's list. "In our view, a Trump win could support BDC valuations as his policies would likely result in a more business-friendly environment, thereby creating expectations for stronger economic growth, which could translate into a shallower path of short-term interest rates and lower defaults," wrote B. Riley analyst Bryce Rowe. "A shallower path of short-term interest rates could generally mean less risk of dividend cuts while fewer defaults should generally mean less downside risk to NAVs (net asset values)."
FS KKR Capital shares are up 0.8% Wednesday.
-James Rogers
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November 06, 2024 11:03 ET (16:03 GMT)
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