In more than three decades as a practicing tax attorney at the top of his profession, there is little that David Mangefrida has not witnessed. Previously, he spoke to InvestorPlace about how oil and natural gas companies would fare under a second Trump Administration. He was gracious enough to share his thoughts for this article on what Trump’s tax policies and his economic agenda will mean for investors and which stocks to buy if he is re-elected in November.
The ABCDs of Donald Trump’s tax and economic policies appear to be Always cut taxes, Bitcoin (BTC-USD) and CryptoCurrencies forever with “Drill, Baby Drill” for fossil fuels. Mangefrida is not a big fan of tax cuts for the simple reason he does not feel they work. “I have never seen any evidence that tax cuts result in a positive outcome for the general economy, ” he explains.
Overall, Mangefrida would like to see a more balanced approach to economic growth and deficit reduction that is not so heavily based on tax cuts. He does not see that happening if Trump is elected president again. But here are three stocks to buy that should do well in a second term for Trump from his likely tax measures.
Ford (F)
In ratings by Morgan Stanley, Ford (NYSE:F) was just replaced as the top American car company by Tesla (NASDAQ:TSLA). Policies by a second Trump Administration could change that. One involves domestic actions and the other with international trade.
Domestically, Trump has already declared war on electric vehicles. In his acceptance speech, Trump stated, “I will end the electric vehicle mandate on day one, saving the auto industry from obliteration.” It’s tough to see Tesla remaining on top with Ford at number two if that happens.
Ford should also benefit from tariffs. While it is impossible to know what the tariffs will entail until becoming law Mangefrida points out, count on manufacturers as one of the major recipients. As a domestic auto company, Ford should do well here, too.
MicroStrategy (MSTR)
What is good for Bitcoin is good for MicroStrategy (NASDAQ: MSTR) as it is a major corporate owner. Trump has promised to be very pro-cryptocurrencies. This can only help MicroStrategy for a variety of factors.
The first is that the value of its assets will rise. Think of oil companies increasing in worth when the price of crude rises. MicroStrategy owns its Bitcoins at an average cost of $36,798. It already has a huge unrealized profit. Expect that to burgeon in a second Trump Administration.
It has also implemented strategies to maximize the value of its Bitcoin holdings. Favorable tax treatment from the Trump Administration will make these operations even more lucrative for the shareholders. Bitcoin is here to stay and MicroStrategy will prosper from an ardent proponent of cryptocurrencies like Trump back at 1600 Pennsylvania Avenue.
Occidental Petroleum (OXY)
Occidental Petroleum (NYSE: OXY) just reported positive earnings; and had a good week as a result despite the turmoil on Wall Street. That is why legendary investor Warren Buffett continues to add to his holdings. Occidental could become even more appealing if Trump wins re-election.
Mangefrida told InvestorPlace that, “Trump has indicated to oil executives that if he is re-elected, he will retain $35 billion in domestic tax subsidies for oil and gas companies.” Occidental will obviously benefit from that as a Big Oil company.
Occidental is in the process of cleaning up its balance sheet by reducing its debt load. It needs to increase its dividend to distribute more to its shareholders as it trails other Big Oil companies in this vital area. Trump is proposing lowering the corporate tax rate to 15% so there will be more cash flow available for Occidental to pay down debt and increase its dividend, which will make it one of the better stocks to buy.
On the date of publication, Jonathan Yates did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, David Mangefrida did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.