No person with a conscience wants to profit from a war. Investors, however, need to adapt to changing conditions such as war.
Hence, all investors and speculators need to be aware of stocks that could benefit from the Ukraine War. Some of these stocks are obvious, but others are not.
Speculators and investors need to watch Ukraine because Russia produces around 10% of the world’s oil. In fact, Russia is one of the world’s top three oil producers along with the United States and Saudi Arabia, The New York Times concludes.
How the Ukraine War Affects the Economy
Thus, any change or disruption to Russia’s oil production or exports could affect the energy markets. In particular, high prices can cause high gas prices, which can lower consumer spending and dampen the economy.
Notably, the AAA National Aveage Price or a gallon of regular unleaded gasoline in the United States was $4.305 on 16 March 2022. Similarly, the American Automobile Association (AAA) National Average Price for a gallon of diesel fuel was $5.135 on 16 March 2022.
Therefore, the war is affecting the economy. Hence, investors and speculators need to identify stocks that could benefit from the conditions the war creates. Fortunately, there are many non-weapons stocks that could profit from the Ukraine War.
Stocks that could Profit from the Ukraine War include:
High gas price could increase use of ecommerce platforms because people will drive less. Instead of driving to the store and burning expensive gas consumers will stay home and shop from their couches.
Obviously, the big beneficiary here is Amazon (NASDAQ: AMZN). Statista estimates Amazon (AMZN) had 41% of the US ecommerce market in October 2021. Yet I think Mr. Market overpriced Amazon at $3,062.08 on 16 March 2022. So I advise people to avoid Amazon.
Amazon has a secret weapon in the age of high diesel prices, the 100,000 electric delivery vans it plans to order from Rivian (NASDAQ: RIVN) by 2030. Amazon could have the advantage of being able to deliver packages without paying high diesel fuel costs.
An interesting Amazon alternative is Walmart (WMT), America’s second largest ecommerce company with 6.6% of the market in October 2021. Walmart is cheap. Mr. Market paid $145.35 for it on 16 March 2022. Yet Walmart is a massive moneymaker.
For example, Walmart reported quarterly revenues of $152.871 billion, a quarterly gross profit of $37.349 billion, and a quarterly operating income of $5.887 billion on 31 January 2021. Thus, Walmart is a lucrative company with a cheap stock.
Plus Walmart will pay four quarterly dividends of 56₵ in the next year. In contrast, Amazon pays no dividend.
I think Walmart could grow in the energy crisis because its ecommerce and delivery operations rival Amazon in size and scope. Notably, Walmart operates 210 distribution centers and is constructing automated fulfillment centers including a 925,000 square foot facility in Wilson County, Tennessee.
Tesla Inc. (NASDAQ: TSLA) is a no-brainer. Tesla is the world’s most prominent builder of electric vehicles. I think Tesla will profit from high gas prices because it builds vehicles that do not need gas or diesel fuel.
Notably, Tesla claims to have built over 305,000 vehicles and shipped over 308,000 vehicles in the fourth quarter of 2021. Additionally, a Tesla press release claims the company produced 930,422 electric vehicles and delivered 936,172 electric vehicles in 2021.
I think Mr. Market fairly priced Tesla (TSLA) at $840.23 on 16 March 2022. I think Tesla’s share price could explode if high gas prices continue. One product that could drive Tesla’s share price through the roof is Elon Musk’s Tesla electric semi-tractor.
Tesla is not delivering the semis yet, but it has unveiled a fleet of Tesla semis and a megacharger station to power them, Electrek reports. The semi is in low-volume production at Tesla’s Gigafactory in Storey County, Nevada, Electrek reports. Plus, PepsiCo CEO Ramon Laguarta claims his company could take delivery of Tesla semis in 2022, Eletrek reports.
I predict there will be an enormous demand for the Tesla Semi in an age of $5.135 a gallon diesel fuel. I think all it will take to boost Tesla’s stock is one picture of a Tesla Semi making a delivery to a warehouse or retail store.
If the energy crisis continues, I think Tesla shares could rise to over $1,000 or higher.
Bargains in Electric Vehicles
One potential bargain in electric vehicles is Rivian (RIVN). Rivian has an order for 100,000 electric vans from Amazon and investments from Ford (F) and Amazon (AMZN). Yet Mr. Market only paid $41.58 for Rivian on 16 March 2022.
However, I think the true bargain in electric vehicles is Ford (F). Mr. Market paid $16.58 for Ford (NYSE: F) on 16 March 2022. Yet Ford’s electric Mustang-E is so popular Ford’’s production cannot keep up with demand, Market Watch claims. The Mach-E is also the Insurance Institute for Highway Safety’s Top Safety Pick. Importantly, Ford claims the Mach-E can run 314 miles on a charge of electricity.
Ford has other electric vehicles coming, including an electric version of the F-150 pickup truck America’s best-selling vehicle. Thus Ford could be a leader in electric vehicles and Mr. Market paid only $15.77 for its shares.
Yet Ford makes enormous amounts of money. For example, Ford reported quarterly revenues of $37.678 billion, a quarterly gross profit of $4.348 billion, and a quarterly income of $739 million on 31 December 2021. Ford is also a cash rich company reporting a quarterly operating cash flow of $3.531 billion and $49.593 billion in cash and short-term investments on 31 December 2021.
Attractively, Ford pays a dividend. In fact, Ford has scheduled four 10₵ dividends over the next year. Overall, Ford shares offered a 40₵ forward dividend and a 2.43% forward dividend on 16 March 2022.
The energy crisis could boost streaming video companies because people will spend more time at home. People who spend more time at home will watch more TV and streaming video. Additionally, there is an enormous amount of new streaming video content out there, including dozens of Marvel, DC, Star Trek, and Star Wars series and loads of sports.
There are also some great bargains in streaming video. For example, Paramount (PARA). Paramount claims its Paramount+ streaming service added 7.3 million subscribers in the fourth quarter of 2021. Hence, Paramount+ could have 32.8 million viewers.
Yet Mr. Market paid $36.25 for Paramount Global Class B (NASDAQ: PARA) shares on 16 March 2022. Conversely, Paramount Global’s revenues grew by 16.38% in the quarter ending on 31 December 2021.
Best of all, Paramount Global Class B (PARA) pays a dividend. Paramount Global has scheduled three 24₵ dividends for 2023. Overall, Paramount offered a 96₵ forward dividend and a 2.73% dividend yield on 16 March 2022.
Similarly, Netflix Inc. (NASDAQ: NFLX) offers a falling share price but no dividend. Mr. Market paid $3357.33 for Netflix on 16 March 2022. I consider Netflix a stock to watch because Mr. Market is realistically pricing it for a change. For example, Mr. Market paid $691.69 for Netflix on 17 November 2021.
I think Netflix (NFLX) could become a value investment if its share price falls below $200. I consider Netflix a stock to watch because of the 221.8 million subscribers it has worldwide.
Other interesting streaming video stocks include Disney (NYSE: DIS) for which Mr. Market paid $138.14 on 16 March 2022. Disney’s share price fell from $196.78 on 15 March 2021. However, Disney has not paid a dividend since 2020.
I find Disney (DIS) attractive because Statista estimates the number of Disney+ subscribers grew from 26.3 million in first quarter 2020 to 94.9 million in first quarter 2021 to 129.8 million in first quarter 2022. Disney has a fast-growing platform.
A Bargain in Software-as-a-Service (SaaS)
An interesting stock in the software-as-a-Service (SaaS) area is Zoom Video Communications Inc. (NASDAQ: ZM).
I think Zoom could profit from high gas prices because its video meetings are a cheap alternative to expensive battle travel. In addition, more people could work from home, which means they will need to communicate with other employees and the office.
I think Mr. Market overpriced Zoom (ZM) at $106.84 on 16 March 2022. Yet Zoom’s price is falling. Zoom’s shares fell from $400.58 on 4 August 2022.
Thus, Zoom is a stock to watch. I think speculators need to watch Zoom because its video-conferencing technology works even on my terrible internet. Hence, Zoom will be in demand if travel falls off.
I think the energy crisis the Ukraine War is triggering could create many stock bargains. However, I do not consider oil companies a bargain because the oil market is unstable.
Additionally, the morality of Climate Change and profiting from dictators scares me away from oil stocks. I recommend avoiding oil stocks and looking at tech, entertainment, and electric vehicles instead.
Originally published at https://marketmadhouse.com on March 16, 2022.