Growth stocks are beaten down as recent tariffs triggered a sharp sell-off, with all major indexes, including the Dow Jones Industrial Average (DJI), S&P 500 (SPX), and NASDAQ Composite (IXIC), falling significantly. The impact of US tariffs on the stock market is significant.
Historically, the S&P 500 has fallen by 5-7% when the US announced tariffs, as seen in 2018-2019. However, history suggests the downturn was temporary as it caused disruptions, but markets rebounded after the Phase I trade deal. Despite this, like energy, US manufacturers, Biotechnology, and Financials may benefit. As we navigate the current market landscape, let’s take a closer look at 5 stocks across various industries that are not prone to tariff uncertainty and present attractive buying opportunities.
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Shuttle Pharmaceuticals (SHPH)
Shuttle Pharmaceuticals (NASDAQ: SHPH) is a specialty pharmaceutical company focused on improving the outcomes of cancer patients treated with radiation therapy. The company is developing innovative radiation sensitizers, including its lead candidate Ropidoxuridine, to enhance the effectiveness of radiation therapy and bring new treatments to patients with cancer.
Phase 2 Clinical Trial for Ropidoxuridine: The company is currently conducting a Phase 2 clinical trial for Ropidoxuridine to treat glioblastoma, a deadly form of brain cancer. The trial is designed to evaluate the safety and efficacy of Ropidoxuridine in combination with radiation therapy. The company has also completed a public offering of $5.75 million to fund its Phase 2 clinical trial, marketing efforts, and general corporate expenses.
Expanding its Pipeline: Shuttle Pharmaceuticals is also developing other oncology drug candidates, including SP-2-225 and SP-1-303, which are in the preclinical stages of development. These candidates have the potential to treat a range of cancers, including breast, lung, and prostate cancer.
Building Strategic Partnerships: The company is building strategic partnerships with leading cancer centers and research institutions to advance its research and development programs.
While Shuttle Pharmaceuticals may not be directly impacted by tariffs, the company may benefit from the Trump administration’s efforts to promote domestic pharmaceutical manufacturing and reduce reliance on foreign imports. The administration is also expected to increase funding for cancer research, which could benefit Shuttle Pharmaceuticals and other companies developing innovative cancer treatments.
Kinsale Capital (KNSL)
Kinsale Capital (NYSE: KNSL) is a leading excess and surplus lines insurance provider that operates various business segments, including commercial property insurance. The company has a strong presence in the US and is poised for growth, driven by its strategic initiatives and market demand.
Expanding Product Lines: Kinsale is continuously expanding its product lines and has recently launched a new agribusiness underwriting unit focused on farm and ranch exposures.
Disciplined Underwriting: Kinsale maintains a disciplined approach to underwriting by focusing on high-margin opportunities and managing risks effectively. The company is investing in technology to drive cost efficiencies.
Increased Demand: Kinsale’s expanded product lines, strategic underwriting, and focus on high-margin opportunities will drive growth in demand for its insurance products.
Strong Financial Metrics: Kinsale has a solid balance sheet, a high cash conversion rate, and a well-diversified investment portfolio that will support its growth and profitability.
United States Steel (X)
United States Steel (NYSE: X) is a major player in the steel industry, with a strong presence in the United States and a history of innovation and adaptation. The company is expected to benefit from the recent announcement by President Trump to double the tariffs on Canadian steel and aluminum to 50%.
Increased Demand and Pricing Power: The company will likely have higher demand, more pricing power, and reduced competition as imports from Canada become more expensive and reduce competition, allowing it to gain market share and increase its revenue.
Improving Asset Turnover and Margins: United States Steel is focused on optimizing its operations and improving its asset turnover, with a goal of increasing its return on capital and reducing its costs.
Investing in Strategic Projects: United States Steel is investing in new projects, such as the Big River Steel mill, to increase its production capacity and improve its competitiveness.
Partnering with Other Companies: The company is exploring partnerships with other companies, such as Nippon Steel, to share technology and expertise and improve its operations.
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United States Cellular (USM)
United States Cellular (NYSE: USM) is a leading telecommunications company providing wireless services to customers across the United States. The company is focusing on expanding its 5G network infrastructure, particularly in rural areas, through partnerships.
Upgrading its 5G Network Infrastructure: United States Cellular has partnered with Ericsson to upgrade its 5G network infrastructure in rural areas by leveraging Ericsson’s advanced cell-site router technology to provide efficient transport infrastructure for mid-band spectrum deployment.
Monetizing its Spectrum Holdings: United States Cellular has recently made deals to sell select spectrum assets to AT&T and other mobile network operators. The company has agreed to sell a portion of its retained spectrum licenses to AT&T for $1. billion and has also reached definitive deals to monetize around 70% of its total spectrum holdings (excluding mmWave).
Financial Performance and Guidance: The company reported Q4 non-GAAP EPS of $0.05 and revenue of $970 million, which beat estimates by $5.3 million.
Spectrum Portfolio And Future Plans: After the proposed sales, UScellular will be left with 1.86 billion MHz-Pops of low and mid-band spectrum, as well as 17.2 billion MHz-Pops of mmWave spectrum, with the substantial majority of retained value in the C-band spectrum.
Plains GP (PAGP)
Plains GP (NASDAQ: PAGP) is a midstream oil and gas company with diversified operations, primarily in crude oil. The company also owns an indirect, non-economic controlling interest in Plains All American Pipeline, a Master Limited Partnership focused on oil and gas midstream operations.
Expanding its Asset Base Through Bolt-On Acquisitions: Plains GP has recently completed several acquisitions, including the Ironwood Midstream Energy acquisition and the purchase of the remaining 50% interest in Midway Pipeline, to strengthen its integrated asset base.
Increasing Quarterly Distribution: The company has announced a 20% increase in its quarterly distribution, bringing the annualized distribution to $1.52 per unit, and plans to continue increasing the dividend by at least $0.15 per year with a 160% coverage.
Investing in Growth Capital Expenditure: Plains GP plans to invest around $400 million annually in growth capex, including investments in Permian JV improvements to drive growth and increase earnings.
Optimizing its Assets and Operations: The company is focused on optimizing its assets and operations, including increasing utilization of Corpus Christi-bound assets and growing Permian crude production to drive growth and increase efficiency.
Conclusion
While all the companies discussed present strong growth potential, Shuttle Pharmaceuticals stands out as a unique investment opportunity. As a US-based company with a domestic supply chain, it is insulated from trade-related disruptions. Moreover, its cutting-edge approach to cancer treatment, ongoing clinical trials, and strategic partnerships position it for substantial growth in the biotech sector.
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