Well, that was a stunner (though perhaps not entirely unexpected). Over the weekend, President Joe Biden made the tough, but likely necessary decision to step down from his reelection bid. It’s why I’m looking at some of the stocks to sell on that news.
There’s still plenty of time for the Democrats to mount an effective campaign against Trump. However, on paper, “The Donald” and the Republicans have a more straightforward path to The White House. From the get-go, it was clear as daylight that conservatives wanted Trump as their man.
The right is getting what they want. It’s just not as complicated as what the Democrats face.
In that sense, it’s not imprudent to consider which investments may do well under Trump – and which may do poorly. On that note, below are stocks to sell as Biden steps out of the race.
Rivian Automotive (RIVN)
If Trump ends up taking the White House, you’d have to figure that electric vehicles may be in trouble. It’s possible that sector leader Tesla (NASDAQ:TSLA) may be safe considering how much CEO Elon Musk supports the conservative cause. However, in a paradigm that would suddenly shift back toward the internal combustion engine, the EV space could get crowded. And that’s why Rivian Automotive (NASDAQ:RIVN) risks becoming one of the stocks to sell.
To be sure, things are looking all that great for RIVN stock right now. During the midweek session, shares lost 7% of equity value. For now, it appears that the company has hit a market peak on July 12. In fairness, Rivian inked a deal with Volkswagen (OTCMKTS:VWAGY), attracting significant investor interest. While the increased funding should help make Rivian’s efforts into making lower-cost EVs a reality, a Trump second term could impose obstacles.
Primarily, the former president threatened to roll back the Biden administration’s green energy initiatives, which includes EVs. In turn, legacy automakers may become much more relevant. Presumably, this “new” source of competition may weigh on Rivian. Therefore, I would be careful.
Vestas Wind Systems (VWDRY)
With Biden moving out of the way, Donald Trump arguably enjoys the most straightforward road to the executive office. If so, one of the stocks to sell may be Vestas Wind Systems (OTCMKTS:VWDRY). A Danish manufacturer, Vestas sells, installs and services wind turbines. It has operating manufacturing plants across the globe, including a presence in the U.S.
Here’s the thing: Trump hates wind turbines. Making multiple statements against the energy source, he has repeatedly cited how ugly the infrastructure is. And yes – wind turbines do kill birds, though the number needs to be taken into a broader context.
Anyways, the point isn’t so much about justifying Trump’s dislike for wind turbines. The man has taken aim at plenty of social dynamics, let’s be honest here. However, if he wins a second term, he will almost certainly support hydrocarbon specialists. That may leave “ugly” Vestas in the shadows.
It’s just the reality of the situation: VWDRY may end up as one of the stocks to sell.
Sportsman’s Warehouse (SPWH)
An ironic example of stocks to sell, Sportsman’s Warehouse (NASDAQ:SPWH) will likely face challenges if Trump wins a second term. Two major problems exist. First, Americans bought a record number of guns during the worst of the Covid-19 crisis. For those that don’t know, guns comprise a significant part of Sportsman’s inventory.
With so many folks having already bought firearms, the need to buy more has diminished. People need to buy rice, beans and toilet paper, and that stuff has gotten expensive due to inflation. So, I don’t see too many firearms being sold.
The other problem is the lack of political pressure. Barring something extraordinary, Trump isn’t going to announce an assault weapons ban. No, the Second Amendment is one of the cornerstones of ‘MAGA’ conservativism. So, the most realistic scenario I see for SPWH stock is, unfortunately, down.
Of course, if the Democrats gain momentum and appear on the cusp of victory, you can bet that my thesis would change. Until then, assume a red wave – and that means SPWH would be one of the stocks to sell.
On the date of publication, Josh Enomoto 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.