We recently published a list of the Analyst Says These 10 Stocks Can Benefit if Donald Trump Wins US Election 2024. Since Emerson Electric Co (NYSE:EMR) ranks 5th on the list, it deserves a deeper look.
Wolfe Research said in a note earlier this month that the odds have shifted in favor of Donald Trump following the first presidential debate. However, the firm believes we can see several “unexpected twists and turns” ahead. Wolfe Research also shared a list of stocks that could be potential winners should Donald Trump become the President of the US.
What could happen if Donald Trump becomes President of the US has been a topic of debate and discussion on Wall Street over the past several months. In late January, when the Russell 2000 index jumped, Zhiwei Ren, portfolio manager at Penn Mutual Asset Management, reportedly said that investors might be flocking to the “Trump Trade.” The Russell 2000 is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. Ren said, according to Wall Street Journal, that since Trump is a supporter of low interest rates and less regulation, small-cap stocks, which thrive under Dovish economic policies, were reacting positively to the increasing chances of Donald Trump becoming the leading Republican candidate for the upcoming elections.
In this article, we first scanned Wolfe Research’s basket of stocks the firm believes could be potential winners in case of a Trump presidency. From these stocks we picked 10 companies with the highest number of hedge fund investors.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Emerson Electric Co (NYSE:EMR)
Number of Hedge Fund Investors: 53
Wolfe Research identified Emerson Electric Co (NYSE:EMR) as one of the stocks that can be potential winners if Donald Trump wins the upcoming election. Deutsche Bank recently increased its price target on the stock $138 from $123. Emerson Electric Co (NYSE:EMR) focus on industrial automation and software has been one of the biggest growth catalysts. Emerson Electric Co (NYSE:EMR) software controls business is also growing. In the latest reported quarter Emerson Electric Co (NYSE:EMR) Software & Control segment saw a 14% year-over-year revenue growth, while the AspenTech business grew by 21%. Emerson Electric Co (NYSE:EMR) focus on automation and software gives it an edge over peers as it’s no longer competing with them in legacy markets.
Emerson Electric Co (NYSE:EMR) also holds an above-average market share in the LNG market. The emerging hydrogen infrastructure is also a significant opportunity as capital projects expand from chemical and fertilizer industries to others. The power sector remains strong as utilities continue upgrading grid management and automation capabilities, areas where Emerson Electric Co (NYSE:EMR) excels, and are incorporating more solar and wind energy. Emerson Electric Co (NYSE:EMR) has highlighted a strong pipeline in nuclear power, with 55 new plants planned by 2030.
Overall, Emerson Electric Co (NYSE:EMR) ranks 5th on Insider Monkey’s list titled Analyst Says These 10 Stocks Can Benefit if Donald Trump Wins US Election 2024. While we acknowledge the potential of Emerson Electric Co (NYSE:EMR), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Emerson Electric Co (NYSE:EMR) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
