You want to add a few names to your portfolio, but you’re afraid of what a possible trade war will do to your stocks. Large tariffs on the goods your company produces will zap sales and shrink profits. To avoid trade war jitters, how about picking up a few micro-caps that do business only in the United States. You won’t encounter any export worries with these stocks.
Orion Group Holdings, Inc. (NYSE: ORN) is a top performer in the construction and engineering sector. The company is based in Houston, Texas.
When you think Orion, think building and repairing structures on or near water, like ports, marine terminals, and bridges. Orion Group Holdings operates mainly in the U.S., with some business in Canada and the Caribbean.
Orion has crushed earnings estimates the past two quarters and the stock is just now trading at highs it saw earlier this year. But even now it’s trading right at book value of $8.40 a share.
Synalloy Corp. (NASDAQ: SYNL) is a company that doesn’t just avoid trade war issues, it actually benefits from the current trade dispute. Synalloy is a steel and iron company based in Richmond, VA, which conducts most of its business in the U.S.
The stock has reflected the possible impact of brewing trade war talk for the past few months, rising about 50% from it’s April 9th close. Every minor pullback in the stock during that time period has been a buying opportunity.
On top of any trade disputes, Synalloy Corp. is also hitting on all cylinders when it comes to earnings. Earnings are growing at 113% this year, and the stock is still only trading at a price-to-sales ratio of .85.
Finally, what better way to avoid an international trade war than shopping at your U.S. owned super market. Village Super Market Inc. (NASDAQ: VLGEA) is based in Springfield, New Jersey and owns 29 ShopRite super markets across the Northeast U.S.
Village stock has risen 26% in 2018 pulling back slightly from this years highs. Yet, even at these prices, the super market owner trades at only .18 times trailing twelve month sales.
Village Super Market has traded close to $35 two of the past three years. If the pattern repeats investors will continue to see nice gains this year.
A trade war may or may not be avoidable. But these stocks will be less impacted, or may even benefit from a dispute. These three micro-caps give you a way to safeguard your portfolio, and keep your returns free of international conflict.
Disclaimer: The author and Spotlight Growth has no positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.
Article By: Steven Adams
