Wall Street analysts are finding some buying opportunities amid the US trade battles


Michael Bloom

Jun 04, 2019

Trade tensions are showing no signs of easing, but that’s not stopping analysts from finding hidden gems to bolster your portfolio. While the U.S. and China continue their back and forth analysts say there are plenty of ways to invest.

CNBC examined the most recent Wall Street research to find stocks to invest in and around the ongoing trade battle. Companies with buy ratings include Best BuyFabrinetBig LotsZebra TechnologiesDover Corporation and Cabot.

The tariff battle has certainly taken its toll on the markets. Since President Donald Trump’s May 5th tweet storm the Dow Jones Industrial Average and S&P 500 are both down over 6%. The sell-off deepened on Friday after Trump threatened to slap a 5% tariff on all Mexican imports.

When Best Buy reported second quarter earnings last week, analysts were squarely focused on the impact that tariffs would have on the electronics retailer. The retail sector has had many analysts on edge due to the sector’s broad exposure to tariffs.

Not only did the company report a solid quarter but analysts at Raymond James said the tariff impact was “minimal” -- for now. “The key risk in the near-term, however, is what items could potentially be on a new list of ~ $100 billion in tariffs that be could be announced in June or July,” they wrote. The firm maintained their strong buy on the stock.

Shares of Best Buy are down 3.74% on the week.

Big Lots reported better-than-expected earnings on Friday and raised its guidance. The discount retailer has also been caught up in the tariff war with the stock down 25% this month.

“In our view, this presents a particularly attractive buying opportunity,” Bank of America said. The analyst is also bullish on the discount retailer’s “underappreciated transformation opportunity with its ‘store of the future’ remodel program.”

One analyst recently heard something which surprised him during a recent investor conference. The CEO of Dover Corporation went out of his way to say that his company was actually benefiting from the tariff battle, according to analysts at Gordon Haskett.

“This is the only company we have heard in the multi-industry space to call this out,” analyst John Inch said of Dover, which manufactures industrial products.

“Dover has been winning more business as Chinese products have become more expensive – primarily component type products (product example: pumps) – and as North American companies have been looking for alternate suppliers (to China). Dover is not significantly that exposed (directly) to Chinese tariffs as it is leveraged toward domestic production,” Inch told CNBC.