As global trade tensions play havoc with the financial markets, one strategy is to consider stocks with relatively large domestic sales exposure. This is the tactic recommended by Goldman Sachs. “Below the surface of the market, trade conflict would benefit the performance of the most domestic-facing U.S. stocks relative to the most foreign-facing firms,” the firm says. So with this in mind, we extracted three intriguing stock ideas with 100% domestic sales. As you will see, all of these stocks have 100% domestic sales – so it’s no surprise that these stocks have performed well over the last few months. That’s despite President Trump’s recent announcement of further tariffs on $200 billion of Chinese goods.
Even better, these are stocks with big support from TipRanks’ top analysts. We rank analysts based on their success rate and average return so that you can follow the advice of analysts who consistently crush the market. As you will see below, all three stocks boast a ‘Strong Buy’ analyst consensus rating. This is based only on ratings from the last three months, giving you the most up-to-date picture of the market.
Let’s take a closer look now:
CVS Health (NYSE:CVS)
100% US Sales
Drugstore giant CVS Health has 100% support from top analysts right now. In the last three months, the stock has received three back-to-back buy ratings from the Street’s best-performing analysts. And luckily for investors, on average these analysts are predicting 23% upside potential from the current share price.
CVS Health is currently fighting hard to push through a massive $69 billion deal with one of the US’s biggest health insurers: Aetna (NYSE:AET). Crucially, the stock has just received a critical upgrade from Citigroup’s Ralph Giacobbe (Profile & Recommendations). He believes deal integration and competitive risk from Amazon are “overstated particularly in the context of heavily discounted valuation.” And looking further ahead, he is confident that the integration of Aetna will resonate with employers and individuals. As a result, the analyst ramped up his price target on CVS from $68 to $81.
Meanwhile, Oppenheimer’s Mohan Naidu (Profile & Recommendations) has his fingers crossed that the deal will go through and says: “Increasing confidence on the successful Aetna transaction makes us excited.” He believes the deal would “strengthen CVS’s position and have significant positive long-term impact.” He has an $86 price target on CVS (26% upside potential).
Dollar General (NYSE:DG)
100% US Sales
In the face of growing e-commerce pressure, retail stores need to be special to succeed. Luckily Dollar General is one of the cheapest stores around. It also boasts over 14,300 stores. For five-star Oppenheimer analyst Rupesh Parikh (Profile & Recommendations) DG remains his “top food retailing/ discounter pick”. He notes that management is targeting at least 10% EPS growth longer-term, which- if achieved- represents ‘standout growth potential’.
“Our positive views are predicated on the following factors: 1) attractive small-box retail concept catering to value consumers; 2) runway for further store growth with a history of strong returns; 3) a still healthy outlook for the lower income consumer; 4) potential for initiatives to sustain top-line momentum and potentially drive a pickup in more discretionary categories; 5) food inflation back to positive territory; 6) lower risk of internet disintermediation; 7) compelling market growth opportunity; and 8) valuation remains accommodative” sums up Parikh.
As you can see below, the most recent rating comes from Citi’s Greg Badishkanian (Profile & Recommendations) . He has just initiated coverage on DG citing solid execution and improving leading market share. Like Parikh, he tells investors that Dollar General is one of the best positioned stocks within the discount/dollar store space.
CSX Corp (NYSE:CSX)
100% US Sales
CSX is a leading supplier of rail-based freight transportation in North America, with approx. 21,000 miles of track. The company is an intriguing stock to follow right now. Following the sudden death of CEO and railroad legend Hunter Harrison, new CEO James Foote is targeting 20% efficiency gains and cutbacks in numerous areas. These new initiatives have prompted a wave of bullish analyst movements. Deutsche Bank has just boosted its price target from $70 to $79 due to cost-reductions and the magnitude of opportunities ahead. Similarly, as we can see below Citigroup’s Christian Wetherbee (Profile & Recommendations) sees the stock spiking 14% to $75.
Interestingly, top Susquehanna analyst Bascome Majors (Profile & Recommendations) has just attended CSX’s first investor day with Foote as CEO. He reports that Foote and the management team “came across as cohesive, with palpable conviction in executing the transformation (Hunter) started a year ago.” He concludes: “We believe CSX presented a more unified management front than most investors expected, with a sense of real conviction toward executing the multi-year plan in place and delivering industry-leading profit and cash flow growth.”
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