This has been a big month for Wall Street. Last week, Pfizer And Biotech Revealed the results of a Phase 3 study for their coronavirus disease 2019 (COVID-19) vaccine BNT162b2, showing an efficacy rate of over 90%. Which dashed expectations of vaccine effectiveness out of the water and gave real hope that there could be light at the end of the tunnel.
Several days after the vote count, Democratic challenger Joe Biden was elected the 46th President of the United States. Despite Democrats in the Republican-led House and Senate, the Congress is splitting, but we will see at least some policy change.
But the big upside from Biden’s election is the prospect of an expanded bull market under his presidency. Interest rates should remain exceptionally low for years to come, and peak corporate tax rates are unlikely to rise with a split Congress. It also doesn’t hurt that Democratic presidents have been monitoring the average annual stock market growth of 10.6% since 1945.
Although nothing is guaranteed in the stock market, there is a good chance that we can see the Broader Market Index reach new highs under Biden’s presidency. In my view, he should be the owner with the Biden of the White House in the following five stocks.
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Intuitive Surgical
Healthcare Innovation will take center stage in the coming years, creating a surgical system developer Intuitive Surgical (Nasdaq: ISRG) A company you would like to own.
By the end of September, Intuitive Surgical had installed 5,865 Da Vinci Surgical Systems worldwide, most of them located in the United States. This may not sound like a lot of installed systems over 20 years, but it jointly dwarfs the competition. The company has become a clear go-to for surgical systems, and has developed invaluable synergies with hospitals and surgical centers across the country.
Of course, the best aspect of Intuitive Surgical is its business model of razors and blades. In the early years, the company derived most of its revenue from the sale of its Da Vinci systems. These systems bring in plenty of revenue, but only a modest margin. But with each soft tissue process the devices and accessories sold, as well as the servicing of its systems, have gradually evolved into a larger percentage of total sales. Since these are significantly higher-margin segments, the company’s installed base of systems should increase the operating operating margins of Intuitive Surgical.
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NextEra Energy Reza
The apparent reversal between Biden and Donald Trump’s presidency is going to lead to a renewed focus on renewable energy sources. Thank you, Electric Utility Stock NextEra Energy Reza (NYSE: NEE) The turn is ahead.
Although the utility industry is generally slow-growing and often tedious, the NextAra is different. For more than a decade, Nextera’s compound annual growth rate has been in high single digits, with the company’s large investments in green energy projects leading the way. No utility produces more capacity than solar and wind energy. This means carrying out potential clean-energy holiday orders from Capitol Hill and generating the lowest cost electricity in the country.
In addition, do not focus on how effective the Federal Reserve’s divisive monetary policy may be for the company. NextAra always finances its green energy projects with debt. In light of the Fed’s efforts to keep lending rates near historic lows, the next era is considering aggressively tackling new clean energy plans and converting fossil fuel-powered plants into cleaner energy sources.
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Visa
A bullish market always means a stable optic in consumption, and that should be very good news for the payment process giant Visa (NYSE: V).
Buying into a stock like Visa is like placing a bet where the numbers are in your favor. Visa is a cyclical company, which means that when the U.S. And it does well as the global economy expands. Although a recession is inevitable, it is often measured in months, while economic expansion lasts for many years. It’s a numbers game and the “buy visa” bet histor has historically been the winner.
Visa also happens to be the kingpin payment facilitator in the United States. In 2018, it controls more than 53% of credit card-based network purchase volumes. That’s a 9-percent improvement over the Great Depression.
As a final note, investors should know that there is no visa lender. By focusing entirely on processing cashless transactions, visas avoid the direct pain of times of recession and economic contraction when loan financing increases. That’s a big reason why Visa’s profit margin is always 50% or more.
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Palo Alto Networks
Despite the effective COVID-19 vaccine, the traditional office fee environment or consumer buying habits will not return to their pre-epidemic state. The business and retail world has got a taste of online and cloud-centric convenience, and that’s where to stay. The same goes for a cyber security stock Palo Alto Networks (NYSE: PW) Biden bull should be in the market.
Cloud Protection has become a basic need service in recent years, which means subscription-based providers (i.e., Palo Alto) can expect consistent, transparent revenue. The subscription model of cybersecurity space also reduces client churning.
More specifically for Palo Alto Networks, it is transforming the business into de-emphasizing physical firewall products in favor of subscription protection services. As you can imagine, this is expected to lead to more consistent revenue recognition and significantly better margins in the long run.
Palo Alto is also not shy about making bolt-acquisitions to expand its product portfolio and appeal to more small and medium-sized businesses. Sacrificing a very short-term margin to increase a large share of the cloud-protection market should be a smart decision.
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Amazon
Did I mention how important consumption is in the U.S. economy? The Biden coronavirus-inspired recession is likely to oversee the economic downturn from e-commerce juggernaut. Amazon (Nasdaq: AMZN) Becomes a fully owned own stock.
With a recurring theme in this list of market share dominance, Amazon controls an estimated 38.7% of sales online sales in the UK, according to eMarketer. Next year, this will expand to about 40%. In some respects, Amazon’s share of US e-commerce is 33 percent higher than its nearest rival. While retail margins aren’t too high to write home, the company’s marketplace keeps customers loyal to the Amazon brand. He has signed up for the Prime membership on 150 million people worldwide.
As I discussed earlier, Amazon should see continued growth in its cloud-infrastructure segment, Amazon Web Services (AWS). AWS has entered the back-to-back quarter with an annual sales growth rate of 29% and an annual run-over sales rate of over 46 46 billion. AWS is significantly higher than the retail- and ad-based revenue Amazon brings. Like Intuitive Surgical, Amazon should also look at its operating cash flow propulsion as cloud infrastructure grows at a higher percentage of total sales.
