3 Stocks to Buy as Tariff Turmoil Shakes Market
These three names should manage through the new tariff environment with aplomb.
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In my column on Monday, I highlighted why tariffs are here to stay. In this column, I am going to profile some equities that should be able to manage through the current tariff environment. It should be noted that, just because companies are going to be impacted by tariffs, that doesn’t mean their stocks are not investable.
1. Ford Motor
Let’s start with Ford Motor F. Yes, this huge automaker will have major and negative impacts from tariffs. However, with a higher percentage of domestically sourced parts than either General Motors GM or Stellantis N.V. STLA, it is in a better position than these rivals on this front. One key reason that Ford stock is up just over 15% this year, while the shares of GM and Stellantis sport losses for the year. Ford also should benefit greatly from the lessening and curtailing of regulations and mandates around electric vehicles, whose deep losses has been an albatross for the automaker. With a single-digit PE ratio and a dividend yield just over 5%, I am maintaining a decent sized covered call holding in Ford.
2. CTO Realty Growth
This week, I took an initial stake in CTO Realty Growth CTO, a small-cap REIT whose shares are down just over 10% on the year. This REIT owns and operates a portfolio of high-quality, retail-based properties primarily in faster-growing parts of the country. Obviously, the business of some of its retail tenants will be adversely affected by tariffs, as a good portion of their merchandise is sourced overseas.
However, the REIT has been able to leverage the overall weakness in the retail space to acquire some recent properties at below replacement cost. They are also seeing good demand for the retail spaces vacated by the likes of Conn’s, Party City and other tenants that have recently gone bankrupt with stronger names like H&M. The REIT trades for under 10 times funds from operations (FFO) and yields 8.8%.
3. Harrow Health
The biotech and biopharma sectors should have less tariff impacts than most sectors of the market. They also have vastly underperformed the overall market throughout the rally in equities that began late in 2022. I initiated an initial stake in Harrow Inc. HROW in late February and highlighted it as my covered call trade of the week then as well. The stock in this diversified U.S. ophthalmology company has moved up nicely since that piece ran.
I added some shares to that stake last week. Harrow is seeing good growth from its key products on the market and sales should increase at a 40% CAGR or better over the next few years. This month, the company acquired the rights to BYQLOVI which was recently approved to treat post-operative inflammation and pain following ocular surgery. It is a great fit with the firm’s current product portfolio as well. BYQLOVI is the first new ophthalmic steroid in its class in over a decade and a half. The stock has gotten a couple of analyst upgrades from the likes of William Blair and Cantor Fitzgerald this month. The shares feel like they have momentum, and Harrow should be a solid growth name for years to come.
At the time of publication, Jensen was long CTO, F and HROW.
