Market strategist Jay Woods has identified two sectors and several investment opportunities that could thrive regardless of whether Donald Trump or Kamala Harris wins the 2024 election.
Defense Stocks: Woods, who is the Chief Global Strategist for Freedom Capital Markets, sees the defense sector as one that could benefit no matter who wins the upcoming election.
Woods said that Boeing Co BA is one defense stock that has held back the sector and hurt ETFs like the iShares US Aerospace & Defense ETF ITA.
The market strategist named stocks like Northrop Grumman NOC, General Dynamics GD, Lockheed Martin LMT, RTX Corp RTX and GE Aerospace GE as companies to watch in the defense sector.
"These stocks are our best in class and they're making new highs," Woods said.
On GE Aerospace, Woods said this is a good example of what splitting up companies can do, noting it could be a potential precursor to what could be in store for Alphabet Inc.
"GE had done nothing. It was dead money for years."
Woods said the sum of the parts was greater than the whole for GE.
The defense sector could continue to benefit from geopolitical concerns and a lot of bad things happening in the world, Woods said.
"I think you’ve got to watch this sector closely."
Cybersecurity Stocks: Woods said the cybersecurity sector could also benefit no matter who wins the 2024 election.
"We know how important that is," Woods said of cybersecurity.
Woods named CrowdStrike Holdings CRWD as the cybersecurity stock that has weighed down the sector and ETFs like the Amplify Cybersecurity ETF HACK.
The market strategist said it is going to take time for CrowdStrike to come back, and investors might not want to jump back in.
Other names in the cybersecurity sector Woods likes are Fortinet FTNT, Check Point Software Technologies CHKP, Palo Alto Networks Inc PANW, Cloudflare Inc NET and Cisco Systems CSCO.
Palo Alto Networks was highlighted as a stock with a strong long-term trend. Woods noted that while the stock has been hit hard on earnings in the past, it’s poised for a comeback in the near future.
Woods mentioned that naming Cisco often catches people off guard, given the stock has done nothing over the last 20 years. However, in the short term, Woods said that the stock appears to have broken out of a downtrend.
An acquisition of Splunk is still being digested by Cisco, but could help in its cybersecurity efforts, Woods said.
"I think they're starting to reap the benefits of that. Cisco to me looks like something's changed. It's worth taking a flyer."
Woods said Cisco isn't a popular recommendation, but there could be something there.
"If you like boring, I give you Cisco."
The market strategist said picking individual stocks could outperform the overall cybersecurity sector, but the CrowdStrike drop also shows the impact one bad stock can have on a portfolio.
"I think the safest way to play cyber is the ETFs."
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