Investing

20 Stocks Loving the China Tariff Delays

Jon C. Ogg

Published: December 3, 2018 10:35 am

Last Updated: January 11, 2020 2:14 pm

Was this a ceasefire or a delay of the trade war and tariffs with China? That answer depends on whom you ask, and it is important to think about whether a couple of hundred serious items and disputes outside of blanket tariffs can actually get done in just 90 days — even if Treasury Secretary Steven Mnuchin did confirm that the United States reserves the right to extend the timeline if it deems that real progress is being made.

Stocks were surging on Monday after the weekend’s news of the increased tariff delays. This is also on top of the prior week’s strong recovery after the worst Thanksgiving week for U.S. stocks in years.

24/7 Wall St. has identified 20 companies that are seeing their shares directly benefit as a result of the China trade talks resulting in the tariffs being delayed. Some companies are U.S.-focused only, but some have other ties to China and the region from suppliers as well.

Brief color has been added, along with the gain, recent trading history and the Thomson Reuters consensus analyst price target. There are of course other beneficiaries as well, and some of the data around Chinese exposure has changed since first reviewed earlier this year.

Advanced Micro Devices Inc. (NASDAQ: AMD) is considered a winner with lower entry price processors, and it has been winning in graphics as well. AMD was last seen up 7.5% at $22.90, in a 52-week trading range of $9.04 to $34.14 and with a consensus price target of $24.17.

Alibaba Group Holding Ltd. (NYSE: BABA) is an obvious would-be winner here, selling everything it can and wanting to expand more in the United States from its core Asian markets. Alibaba was last seen up 3% at $165.68, and it has a 52-week range of $130.06 to $211.70 and a consensus price target of $203.50.

Apple Inc. (NASDAQ: AAPL) should be an obvious winner if it can avoid its iPhone and related products falling further into the tariff game. Some problems persist here, and Apple shares already had been recovering from the prior week’s weakness. Apple was last seen up 2% at $182.15, and its 52-week range is $150.24 to $233.47. Apple has a consensus price target of $231.32, but many analysts had lowered their targets throughout November.

Boeing Co. (NYSE: BA) is an obvious winner if it can keep selling more and more airlines its high-margin jets. Boeing was last seen up 4.9% at $363.75, and it has a 52-week range of $274.00 to $394.28. Boeing also has a consensus analyst target of $417.24, and it is hard to imagine this was about to challenge the $300 share price just a few trading sessions ago.

Bunge Ltd. (NYSE: BG) is a top soybean producer, and it seems almost shocking that it was only up 2.3% at $58.38, after having fallen from a 52-week high of $83.20 to a recent low of $56.80. Bunge has a consensus target price of $78.89 that still seems artificially high and in need of lowering.

Corning Inc. (NYSE: GLW) sells advanced glass for TVs, phones and myriad other uses, and it was up as much as almost 4% at $33.35 in Monday’s early trading. Corning’s 52-week range is $26.11 to $36.56, and the consensus price target is $36.59.

Deere & Co. (NYSE: DE) was last seen up 4.6% at $162.00, but it was as high as $164.35 earlier. Deere is an obvious agriculture machinery winner here that had been a targeted company. Deere has a 52-week range of $129.34 to $175.26 and a consensus price target of $175.47.

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Dollar General Corp. (NYSE: DG) has performed better than rival Dollar Tree of late. It’s also the top dollar store chain and was facing obvious tariffs on its goods being supplied by China and related countries. Dollar General opened up 1.8% at $113.01, but it was down marginally from its 52-week high of $118.45.

First Solar Inc. (NASDAQ: FSLR) opened up over 3% at $45.90. The stock has a 52-week range of $36.51 to $81.72 and a consensus price target of $65.28. Being the top U.S. solar panel producer might come with benefits if its wares can flow more easily back and forth around the globe (including China).

Five Below Inc. (NASDAQ: FIVE) shares were seen up nearly 5% at $109.78, with a consensus price target of $129.94. The stock has a 52-week range of $60.00 to $136.13. This is similar to the dollar store theme, and now it has just that much longer to find non-China sourcing for its low-priced retail goods.

General Motors Co. (NYSE: GM) shares started out the week up 3% at $39.15, within a 52-week range of $30.56 to $45.52. The stock has a consensus price target of $45.20. After a recent factory closure notice in America, GM was criticized by President Trump and it would like to use a lower tariff climate to sell more cars in China.

Intel Corp. (NASDAQ: INTC) shares opened up just over 1% at $50.00. The stock has a 52-week range of $42.04 to $57.60 and a consensus price target of $54.91. Over 20% of Intel’s sales have been tied to China.

Micron Technology Inc. (NASDAQ: MU) shares opened Monday up 4% at $40.20, within a 52-week range of $33.82 to $64.66. The stock has a consensus price target of $63.10. Being the top DRAM and flash memory supplier should be rather obvious why it cares with so many end products for its chips being assembled in China.

Nike Inc. (NYSE: NKE) is an obvious winner to sell more apparel and sporting goods items into the world’s largest market — and potentially avoiding more tariffs on what it has manufactured abroad that comes back into the United States. Nike shares were last seen up over 3% at $77.89. Shares traded in a 52-week range of $59.65 to $86.04. The consensus price target is $87.45.

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Nvidia Corp. (NASDAQ: NVDA) shares opened up over 5% at $172.60. The stock has a consensus price target of $230.24 and a 52-week range of $133.31 to $292.76. Having the top chips for artificial intelligence, machine learning, autonomous cars, crypto and graphics should be rather obvious. Plus, its shares have been gutted after earnings.

NXP Semiconductors N.V. (NASDAQ: NXPI) was a company that China said it would reconsider the Qualcomm acquisition that it blocked. Just don’t expect Qualcomm to come back as it already has said it moved on. NXP shares were recently trading up 3% at $86.01, with a consensus price target of $102.22. The stock has a 52-week range of $69.72 to $87.40.

Tesla Inc. (NASDAQ: TSLA) shares were last seen up about 3% at $360.70, with a 52-week range of $244.59 to $387.46. The stock has a consensus price target of $327.67. Has anyone seen how low Tesla’s sales were in China? Tesla is an ultimate luxury symbol for a market that is producing many more electric car models than the United States.

Tiffany & Co. (NYSE: TIF) was trading up over 4% at $95.20. The stock has a 52-week range of $89.03 to $141.64 and a consensus price target of $127.21. Tiffany recently showed with earnings how Chinese and Hong Kong retail buying has been weak in the most recent quarter. Maybe an easing of tensions can help it out.

While an exchange traded fund is not a company, the iShares China Large-Cap ETF (NYSEARCA: FXI) is the top ETF for China by market volume. It opened Monday up over 2% at $43.03, with a 52-week trading range of $37.85 to $54.00.

It seemed a bit disappointing and even surprising that companies like Yum! China, Starbucks and McDonald’s were big laggards here on the news. But that’s what makes a ballgame.