HomeMost PopularInvesting3 Industries Thriving Under Government Policy

3 Industries Thriving Under Government Policy

Actionable Trade Ideas

always free

For investors, the US government presents itself as a formidable entity, resembling the largest business globally due to its extensive operations, multifaceted functions, and substantial financial transactions. Managing a comprehensive budget, the government participates in activities spanning defense, healthcare, infrastructure, and social programs. It generates revenue through taxation and oversees numerous agencies and departments mirroring the divisions of a large corporation. Furthermore, the government engages in global trade, diplomacy, and economic regulation, echoing business-like functions on a worldwide scale. Despite contentions over this analogy, asserting the government’s primary purpose is public service rather than profit, its sheer magnitude and intricacy still draw parallels to a colossal enterprise. Here are 3 industries presently thriving under government policies.

Coal: Navigating the Clean Energy Shift

Over the years, successive US administrations have pursued a dedicated β€œclean energy agenda” with an intention to combat the perils of climate change through government policies. Such initiatives have incentivized industries like solar while placing disincentives on sectors such as coal. Notably, numerous large companies, including the world’s largest asset manager, BlackRock (BLK), are conducting operations and making investments based on ESG (Environmental, Social, and Governance) standards. These policies have led to the bankruptcy of over 60 coal companies in the past decade.

Zacks Investment Research

Image Source: Zacks Investment Research

Despite the adversity faced by clean energy companies like Enphase Energy (ENPH) due to reduced consumer demand caused by rising rates, surviving coal stocks are once again thriving. The global coal demand has soared to an all-time high in 2022, defying a weakening global economy and a downturn in the Chinese economy, the largest coal consumer in the world. Analysts anticipate this bullish trend to persist, with companies like Consol Energy (CEIX) and Warrior Met Coal (HCC) experiencing burgeoning demand. Notably, Wall Street analysts have recently revised the EPS estimates higher for HCC and forecast robust double-digit growth in the first two quarters.

Zacks Investment Research

Image Source: Zacks Investment Research

Secure Facilities, Detention Centers, and Immigration Processing

Amidst the raging debate on immigration policy, particularly along the Southern US Border, border crossings have been escalating rapidly. In 2020, the US Customs and Border Protection agency recorded 458,000 encounters at the southern border, a figure that has already surged close to 2.5 million with over a month left in 2023. Companies such as CoreCivic (CXW) and Geo Group (GEO) stand to benefit significantly from this mega-trend as they oversee detention and immigration processing centers. Notably, GEO shares recently triggered a bullish β€˜Golden Cross” pattern.

Zacks Investment Research

Image Source: Zacks Investment Research

Aerospace & Defense: Responding to Global Conflicts

Recent global conflicts, including but not limited to the war in Ukraine and the flare-up in the Gaza Strip, have prompted the Biden administration and the US Congress to allocate over $75 billion in assistance to Ukraine and are expected to provide significant aid to Israel. Support for defense initiatives has propelled companies like General Dynamics (GD), which reported earnings surpassing analyst expectations, leading to a surge in GD stock. Zacks Consensus Estimates suggest further acceleration in GD’s earnings in the upcoming quarters.

Zacks Investment Research

Image Source: Zacks Investment Research

4 Oil Stocks with Massive Upsides

Global demand for oil is skyrocketing, posing significant challenges for oil producers to meet the surging requirements. Despite the decline in oil prices from recent highs, substantial profits are anticipated for companies supplying the world with β€œblack gold.” Zacks Investment Research has released an urgent special report, β€œOil Market on Fire,” unveiling 4 unexpected oil and gas stocks poised for substantial gains in the forthcoming weeks and months.

Download your free report now to see them.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.