In this article, we discuss 5 American stocks that will benefit from the new Cold War. If you want to see more stocks in this selection, check out 10 American Stocks That Will Benefit from the New Cold War.
5. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 43
Fortinet, Inc. (NASDAQ:FTNT) was incorporated in 2000 and is headquartered in Sunnyvale, California. The company provides broad, integrated, and automated cybersecurity solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Cybersafety is a huge concern amid the new Cold War, which is a positive catalyst for American firms like Fortinet, Inc. (NASDAQ:FTNT).
On September 15, Jefferies analyst Joseph Gallo initiated coverage of Fortinet, Inc. (NASDAQ:FTNT) with a Buy rating and a $65 price target. The company “represents a rare blend” of growth and GAAP profitability as it continues to work in the fields of converged security and networking, the analyst told investors in a research note. The analyst noted that businesses will employ a hybrid environment for the foreseeable future and the cyber/networking market is “massive.”
According to Insider Monkey’s data, 43 hedge funds were long Fortinet, Inc. (NASDAQ:FTNT) at the end of Q2 2022, compared to 39 funds in the last quarter. Jim Simons’ Renaissance Technologies is the biggest position holder in the company, with 4.8 million shares worth $272.3 million.
Here is what ClearBridge SMID Cap Growth Strategy has to say about Fortinet, Inc. (NASDAQ:FTNT) in its Q3 2021 investor letter:
“Performance among our cohort of IT and Internet companies was mixed, with enterprise software makers thriving while more consumer-oriented stocks faced headwinds. Cyber security software maker Fortinet benefited from a heightened awareness of the need to protect against sophisticated attacks. We are attracted to the recurring revenue nature of these software companies that are increasingly delivering their products on a subscription basis through the cloud. Software business models also tend to avoid many of the inflationary issues facing companies with a physical product or service.”
4. Raytheon Technologies Corporation (NYSE:RTX)
Number of Hedge Fund Holders: 45
Raytheon Technologies Corporation (NYSE:RTX) is a Massachusetts-based aerospace and defense company, specializing in systems and services for commercial, military, and government customers worldwide. It operates through four segments – Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. China has advanced military tech, and in times of heightened geopolitical tensions, American stocks like Raytheon Technologies Corporation (NYSE:RTX) will potentially thrive.
RBC Capital analyst Ken Herbert on July 27 reiterated an Outperform rating on Raytheon Technologies Corporation (NYSE:RTX) but lowered the price target on the stock to $115 from $125 after its Q2 earnings beat. Resilience in the company’s commercial markets made up for the softness in the defense business, the analyst told investors. Raytheon Technologies Corporation (NYSE:RTX)’s 2022 guidance also indicated a significant recovery in the defense business in the second half, which is the primary source of investor concern, the analyst added.
According to Insider Monkey’s data, 45 hedge funds were long Raytheon Technologies Corporation (NYSE:RTX) at the conclusion of Q2 2022, compared to 51 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the largest position holder in the company, with 8.4 million shares worth $808.3 million.
Here is what Carillon Eagle Growth & Income Fund has to say about Raytheon Technologies Corporation (NYSE:RTX) in its Q1 2022 investor letter:
“Raytheon (NYSE:RTX) outperformed along with other defense contractors on rising geopolitical concerns. Military sales account for more than half of revenue. Key franchise programs include the Patriot Missile and F-35 engine, which have provided visible support through most of the decade.”
3. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 45
Caterpillar Inc. (NYSE:CAT) is an American corporation that manufactures and markets construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. Caterpillar Inc. (NYSE:CAT)’s defense products include diesel engines, automatic transmissions, Trojan combat engineering tank, Terrier combat engineering vehicles, tank transporters, armored personnel carriers, military trucks, and infantry fighting vehicles. American stocks like Caterpillar Inc. (NYSE:CAT) are attractive for investors amid times of war and strained geopolitical relations.
Tigress Financial analyst Ivan Feinseth on September 30 maintained a Buy recommendation on Caterpillar Inc. (NYSE:CAT) but lowered the price target on the shares to $266 from $282, citing a re-rating of valuation. His 12-month target still reflects a potential total return with dividends of more than 60% from present levels, noted the analyst, who sees Caterpillar Inc. (NYSE:CAT) as well-positioned to benefit from continuous capital equipment spending, supported primarily by higher growth in the energy and mining sectors.
Among the hedge funds tracked by Insider Monkey, 45 funds were long Caterpillar Inc. (NYSE:CAT) at the end of Q2 2022, compared to 54 funds in the preceding quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust is a prominent stakeholder of the company, with 7.35 million shares worth $1.3 billion.
Here is what Diamond Hill Large Cap Concentrated Fund has to say about Caterpillar Inc. (NYSE:CAT) in its Q1 2022 investor letter:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
2. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 56
Freeport-McMoRan Inc. (NYSE:FCX) is an Arizona-based company engaged in the mining of mineral properties in North America, South America, and Indonesia. The company explores for copper, gold, molybdenum, silver, and other precious metals, as well as oil and gas. Cutting reliance on China for precious metals as a consequence of the new Cold War will potentially benefit American mining stocks like Freeport-McMoRan Inc. (NYSE:FCX).
On September 21, Freeport-McMoRan Inc. (NYSE:FCX) declared a quarterly dividend of $0.15 per share, in line with previous. The dividend is payable on November 1, to shareholders of record on October 14. The forward yield was 2.02%.
RBC Capital analyst Sam Crittenden on July 22 maintained a Sector Perform rating on Freeport-McMoRan Inc. (NYSE:FCX) and lowered the price target on the shares to $35 from $46. The company posted another solid operating quarter, though the analyst also sees ongoing volatility in copper prices amid concerns over a future slowdown in demand during a recession. Freeport-McMoRan Inc. (NYSE:FCX) shares could respond swiftly when sentiment improves, the analyst added.
According to Insider Monkey’s data, 56 hedge funds were bullish on Freeport-McMoRan Inc. (NYSE:FCX) at the end of Q2 2022, compared to 68 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management featured as the leading position holder in the company, with 52 million shares worth $1.5 billion.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Freeport-McMoRan Inc. (NYSE:FCX) was one of them. Here is what the fund said:
“Supply chains eased for some goods, but remained challenged for many commodities including energy, agriculture, and fertilizer due to war and general scarcity, and also in many consumer products as semiconductors remained in short supply. Copper and gold producer Freeport- McMoRan (NYSE:FCX) rose as copper prices remained strong due to supply shortages and growing use in renewable energy systems and electric vehicles.”
1. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 90
Palo Alto Networks, Inc. (NASDAQ:PANW) is a California-based company that provides cybersecurity solutions worldwide, marketing and selling its products and services through channel partners, as well as directly to enterprises, service providers, and entities operating in the education, energy, financial services, healthcare, internet and media, manufacturing, and telecommunications sectors. Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the American stocks that stand to benefit from the new Cold War, as companies and government institutions rapidly shore up their cyber defenses.
On September 16, MKM Partners analyst Catharine Trebnick initiated coverage of Palo Alto Networks, Inc. (NASDAQ:PANW) with a Buy rating and a $250 price target as part of a broader research note on the Cyber Security Software Sector. Palo Alto Networks, Inc. (NASDAQ:PANW) is the analyst’s top pick given the firm’s 75% revenue from subscription services. She further cited the company’s land-and-expand strategy and noted that Palo Alto Networks, Inc. (NASDAQ:PANW)’s deals are getting larger, with longer term deals up from $28 million a few years ago to $75 million now.
Among the hedge funds tracked by Insider Monkey, David Blood and Al Gore’s Generation Investment Management is a prominent stakeholder of Palo Alto Networks, Inc. (NASDAQ:PANW), with 733,482 shares worth $362.3 million. Overall, 90 hedge funds were bullish on the stock at the end of June 2022, up from 87 funds a quarter ago.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Palo Alto Networks, Inc. (NYSE:PANW) was one of them. Here is what the fund said:
“The portfolio also saw solid performance from cybersecurity names Palo Alto Networks, Inc. (NYSE:PANW) which is gaining prominence as the risk of global cyber attacks increases as part of the Russian offensive. On an individual stock basis, leading contributors to absolute returns in the first quarter included positions in Palo Alto Networks.”
You can also take a look at Best Airline Stocks To Buy and Best Alternative Energy Stocks To Buy.
