3 Stocks That Could Gain From Disorder in 2018

A shaky political landscape could be great news for Yamana Gold Inc. (TSX:YRI)(NYSE:AUY) and others this year.

| More on:

In August, Ray Dalio, founder of the investment firm Bridgewater Associates, warned that politics could play a greater role in affecting markets in the coming years. Stock markets in North America appeared to vindicate that position in 2017.

The U.S. stock market tore upward over the course of the year largely on the expectation that the Trump administration would pass its massive tax-reform package. Trump signed tax legislation into law in December that will see corporate taxes reduced from 35% to 21%. Corporate revenues have been projected to rise by up to $6 trillion over the next decade as a result of the reform package.

Geopolitical tensions in the Middle East coupled with a production cut extension from OPEC have driven oil prices to a two-year high.

In a recent interview with the Wall Street Journal, Dalio warned that high stock valuations had not translated into elevated economic growth in the long term. Dalio is concerned that tax cuts and higher stock valuations will do little for the bottom 60% of U.S. households. He argued this could lead to further polarization, political resentment, and an all-against-all mentality going forward.

As we head into a year that will see the U.S. hold crucial midterms in November, let’s take a look at three stocks that could benefit from a tumultuous political environment in North America and beyond.

Yamana Gold Inc. (TSX:YRI)(NYSE:AUY)

Yamana has climbed 7.4% in 2018 as of close on January 16. The spot price of gold hit its highest point since early September 2017. The U.S. dollar has continued to display weakness in early 2018. The precipitous decline of Bitcoin and other cryptocurrencies in January may have also fueled demand for investors to return to the yellow metal as a safe haven and speculative asset.

Yamana posted net earnings of $38.3 million in the third quarter of 2017 compared to a net loss of $2.1 million in Q3 2016. As usual, gold stocks stand to gain from political turbulence at home and abroad.

BlackBerry Ltd. (TSX:BB)(NYSE:BB)

BlackBerry stock has soared 22.3% so far in 2018. The company made a splash recently because of its foray into the autonomous vehicle industry, but investors should also be excited about its cybersecurity segment. On January 15, BlackBerry launched Jarvis, a new cybersecurity software that identifies vulnerabilities in programs used in self-driving vehicles.

BlackBerry also provides mobile security to a number of governments around the world. Cyberattacks are projected to steadily increase well into the next decade.

Silvercorp Metals Inc. (TSX:SVM)(NYSE:SVM)

Silvercorp stock has risen 9.7% in 2018 thus far. The spot price of silver has increased with gold to start 2018. In the second quarter of 2017, Silvercorp saw net income dip to $11.1 million, or $0.07 per share, compared to $12.4 million, or $0.07 per share, in the prior year. The company did report a 3% increase in sales to $47.5 million. The stock also offers a modest dividend of $0.01 per share with a 0.7% dividend yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool owns shares of BlackBerry. BlackBerry is a recommendation of Stock Advisor Canada.

More on Investing

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

stock research, analyze data
Bank Stocks

Canadian Bank Stocks: Buy, Sell, or Hold?

There are opportunities and risks on the horizon for the Canadian banks.

Read more »

Young Boy with Jet Pack Dreams of Flying
Stock Market

Is Air Canada Stock a Good Buy After Its Q3 Results

Down almost 60% from all-time highs, Air Canada is an undervalued TSX stock that remains an enticing investment in November…

Read more »

cloud computing
Investing

Where to Invest $10,000 in November

Given their solid underlying businesses and healthy growth prospects, I expect these two defensive stocks to outperform uncertain outlook.

Read more »

coins jump into piggy bank
Retirement

Here’s the Average RRSP Balance at Age 44 for Canadians

Holding stocks like Alimentation Couche-Tard (TSX:ATD) in an RRSP is a good way to build your wealth.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »