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Value Investor Daily #58

Value Investor Daily #58

Trump Wins White House, What's Next?

November 07, 2024

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Donald Trump won the presidential election on Tuesday night this week.

Republicans won the Senate and will likely win the House.

The market gapped and closed up 2.5% at all-time highs on the news. The Nasdaq was up 2.95%, and the Dow was up 3.5%.

The Shiller PE is now over 37, just shy of its second-highest reading ever. Animal spirits are alive and well.

But it’s not wholly without reason. Trump is expected to make current rates permanent and extend further tax cuts for workers and corporations, which should raise corporate profits.

When Republicans control The White House and Congress, the average annual stock market return is 11.70%.

What happened last time Trump was in office with a similar supermajority to start his term? The market rose just over 36% in 14 months, from election week in November 2016 until the correction began in January 2018.

What were the results over his entire term? In his four years in office, the market rose 67.8% or 13.8% CAGR.

The best-performing sectors today were financials (up 6.08%), industrials (up 3.92%), and energy (up 3.76%). These sectors could be good bets for companies that will benefit most from Trump’s term.

SectorSPDRs

We ran a Seeking Alpha screen to find the top-rated companies in those sectors with an A- or better rating for valuation and profitability. Here are the results:

Symbol	Company Name	Market Cap	Price/CF(TTM)	Sector
NOG	Northern Oil and Gas, Inc.	3.66B	2.74	Energy
GPOR	Gulfport Energy Corporation	2.54B	4.08	Energy
APA	APA Corporation	8.72B	2.87	Energy
OVV	Ovintiv Inc.	10.40B	2.63	Energy
PSIX	Power Solutions International, Inc.	517.49M	8.47	Industrials
UAL	United Airlines Holdings, Inc.	26.32B	4.17	Industrials
BLBD	Blue Bird Corporation	1.40B	15.31	Industrials
DAL	Delta Air Lines, Inc.	37.37B	5.6	Industrials
SYF	Synchrony Financial	22.12B	2.25	Financials
FNMA	Federal National Mortgage Association	7.98B	2.05	Financials
BRK.A	Berkshire Hathaway Inc.	959.23B	23.75	Financials
ALL	The Allstate Corporation	49.00B	5.8	Financials