5 valuable stocks to buy for a bull market Biden

The change is coming to Washington in less than eight weeks. On January 20, Joe Biden will be sworn in as the 46th President of the United States. As reported in recent days, Biden plans to quickly tackle the response to the 2019 coronavirus disease (COVID-19), as well as to reverse a number of environmental measures put in place by outgoing President Donald Trump.

But for investors, a Biden presidency probably means more of the same – and that’s a good thing for Wall Street. A potentially divided Congress makes it unlikely that corporate tax rates will increase anytime soon, which means higher revenue potential for publicly traded companies. With the Federal Reserve also continuing its accommodative monetary policy, the stage is set for the young bull market to thrive under Biden’s leadership.

In particular, it might be time for value stocks to flourish. A Bank of America/ The 2016 Merrill Lynch report which examined the performance of growth stocks versus value stocks over a 90-year period (1926-2015) found that value stocks outperformed growth stocks on an annualized basis ( 17% against 12.6%). Value stocks have also outperformed growth stocks during periods of economic expansion.

That being said, here are five perfect value stocks to buy for a Biden bull market.

CVS Health

The past two weeks have been tough for the pharmacy giant CVS Health (NYSE: CVS), with Amazon.com announcing that it will enter the prescription space. This depressed the valuations of generally low-margin drugstore chains across the board. But with little chance of major healthcare reforms making their way down the pipeline with Biden in the White House, CVS Health appears well positioned to ward off Amazon’s attack.

You see, CVS Health thought outside the box in 2018 when it acquired healthcare provider Aetna. The deal, which people initially scratched their heads at, will boost CVS ‘organic growth rate, drive substantial cost synergies, and inspire over 20 million Aetna members to stay within the product and service network. CVS Health. Getting past the retail stage will be key to CVS Health’s long-term growth.

CVS Health also plans to open 1,500 HealthHUB health clinics across the country. These specialty care clinics are designed to connect chronically ill patients with physicians. Most importantly, they will serve as a local point of engagement between CVS and potential repeat customers.

In short, CVS Health should perform very well during a Biden presidency.

Wells fargo

Past performance may not guarantee future results, but recessions have almost always been the perfect time to put your money to work in battered money center banks. Among the largest banks in the country, none are cheaper, relative to book value, than Wells fargo (NYSE: WFC).

Keep in mind that stocks are often “cheap” for a reason. In Wells Fargo’s case, it’s because the company opened 3.5 million unauthorized accounts between 2009 and 2016 as part of an aggressive cross-sell campaign at its branches. Society has paid her penance for her wrongdoing and she has now been struck in the gut by the coronavirus recession.

The good news for Wells Fargo is that it has catalysts in its sails. For example, he has always done a great job of attracting affluent clients. High-income customers are less likely to change their spending habits during economic turmoil and are also less likely to default on their loans. This makes them ideal clients for selling multiple financial products, such as mortgage servicing and asset management.

History has shown that Wells Fargo delivers superior return on assets. With that bank stock currently valued at just 73% of its book value, it is ripe for picking with Biden in office.

Alexion Pharmaceuticals

As noted, we’re unlikely to see any substantive health reforms under Biden, which is great news for drugmakers like Alexion Pharmaceuticals (NASDAQ: ALXN) who have very expensive treatments.

The reason why Alexion’s drugs are so expensive is simple: they target ultra-rare indications. This is a particularly risky practice given that some of the targeted patient pools have only a few hundred people. On the bright side, if Alexion is successful, he faces little to no competition in the indications for which his therapies are approved. In addition, health insurers offer a minimum reduction in prices because there are often no other forms of treatment.

Innovation is another driving force for Alexion. The approval of the next-generation Ultomiris therapy at the end of 2018 paved the way for this new drug to eventually replace its successful Soliris therapy. Soliris is given every two weeks, as opposed to every eight weeks with Ultomiris. More importantly, Soliris’ patent exclusivity was waning, meaning Ultomiris can step in and ensure that Alexion can maintain its cash flow for another decade (or beyond).

It’s rare that you will find a drug stock with a PEG ratio below 1 – a PEG below 1 is considered undervalued – but that’s exactly what you’ll get with Alexion Pharmaceuticals.

Kirkland Lake Gold

A Biden presidency should also generally be good news for physical gold and gold stocks. Loose monetary policy and Biden’s willingness to impose additional fiscal stimulus are expected to weaken the US dollar. Since the dollar and gold have an inverse relationship, this is an advantage for miners like Kirkland Lake Gold (NYSE: KL).

Of course, Kirkland Lake Gold is going to benefit more than a higher realized price for the bright yellow metal. In particular, Kirkland Lake has been one of the most efficient producers in the world, with an all-inclusive maintenance cost that is almost always well below the industry average. This means that the company generates a higher operating cash flow margin than most of its peers.

Kirkland Lake Gold also has the best track record in the entire industry. He finished the third quarter with $ 848 million in cash and no debt. Additionally, it tripled its dividend in 2020 and repurchased $ 526.6 million of its own shares in the past nine months.

Best of all, you can buy this amazingly valuable stock for less than 10 times the profits eventually.

Western digital

Even the tech sector offers compelling value for patient investors. The company to consider here is the specialist in storage solutions Western digital (NASDAQ: WDC).

The COVID-19 pandemic has disrupted the traditional work environment and seen consumers head to the internet to shop. Businesses have had no choice but to ensure they have an online presence, with many moving to the cloud to share, secure, or monitor data remotely. This cloud-centric push is great news for Western Digital, as the storage needs of data centers are expected to continue to increase for many years to come.

For now, Western Digital hard drives are a staple in the data center. However, by the middle of the decade, we could see the company’s NAND flash memory solutions take over given the long-term stability and durability of NAND.

Additionally, Western Digital is expected to see a sharp increase in demand since the launch of the new game consoles. With the PS5, Xbox Series X, and Xbox Series S all hitting stores in November 2020, these items are in high demand. will require enhanced storage solutions.

With just over 7 times Wall Street’s earnings forecast for next year, Western Digital has all the tricks of a value stock you’ll want to own for a bull market in Biden.