A lot of eyes are set upon President Trump and Chinese leader Xi Jinping’s meeting this upcoming weekend. There is a bag of mixed emotions going into the summit because the results of the discussion will likely play a pivotal role on the stock market and economy as a whole. Investors have been looking at the G20 as the biggest risk to market equilibrium after the Fed left the door open for the possibility for rate cuts which sent stocks soaring. According to reports, Chinese President Xi Jinping was prepared to present terms of an agreement to Trump so long as the newly reached deal was balanced.
Goldman Sachs GS recently released a list of stocks who have revenue streams dependent on Chinese exposure. With that in mind, let’s take a further look into which stocks have high Chinese exposure, and which stocks could surge if the U.S. and China are able to arrive at a compromise or at least a temporary ceasefire.
Applied Materials AMAT focuses in modifying materials at atomic levels and on an industrial scale. 45% of its revenue stems from China, which can push or pull the stock depending on how the G20 goes. Applied Materials is currently sitting at a Zacks Rank #2 (Buy), with a style score of A in Value. The stock has historically traded at a discount from its respective industry. Over the past two years, Applied Materials has traded at 17X its forward 12-month earnings at its highest, and traded 7X its forward 12-month earnings at its lowest. We can see on the graph below that the stock has been able stay below its industry in terms of valuation making it a good stock to consider especially if all goes well this weekend.
Las Vegas Sands
Las Vegas Sands Corp. LVS is a hotel, gaming, and retail mall company headquartered in Las Vegas, Nevada. The gaming stock has a whopping 62% revenue exposure to China. The company is currently listed as a Zacks Rank #3 (Hold) and has some sound growth projections. The Zacks Consensus Estimate is currently calling for an earnings increase of 8.11%, with a revenue spike of 2.58% for the current quarter. Positive growth is projected through the current year for both earnings and revenue as well. The gaming company was also able to increase its earnings by 18.18% and its revenue by 4.92% compared to the previous quarter. Las Vegas Sands is coming off a solid quarter, beating our estimate by 7.06%. If at least a truce is reached this weekend, shares of the gaming giant could see some upside.
Marvell Technology Group
Marvell Technology Group MRVL is part of the semiconductor industry that has been collectively battered by the Trump administration blacklisting of Chinese telecom giant Huawei, a big customer of U.S chips. Semiconductor stocks such as Nvidia NVDA have seen a drop of nearly 9% this quarter and Micron MU saw a 7% decline within the last 3 months despite surging double digits after an earnings beat Tuesday.
Marvell has 42% of its revenue exposed to China. The company is currently a Zacks Rank #3 (Hold), and has had a spectacular year thus far. The chipmaker is up over 47% year-to-date and was able to slightly edge our consensus estimate in the past quarter, posting an EPS surprise of +6.67%. The Zacks Consensus Estimate is currently predicting a 67.65% earnings increase on top of a 17.79% surge in revenue for the company’s following fiscal year of 2021. If future trade talks can develop into reversing the blacklist put on Huawei, Marvell and the semiconductor industry as a whole may see a surge.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Click to get this free report Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report Marvell Technology Group Ltd. (MRVL) : Free Stock Analysis Report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Micron Technology, Inc. (MU) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research