Is Nucor Corp (NYSE:NUE) the Best Donald Trump Stock to Buy Before Election?

We recently published a list of the Analyst Says These 10 Stocks Can Benefit if Donald Trump Wins US Election 2024Since Nucor Corp (NYSE:NUE) ranks 7th on the list, it deserves a deeper look.

Wolfe Research said in a note earlier this month that the odds have shifted in favor of Donald Trump following the first presidential debate. However, the firm believes we can see several “unexpected twists and turns” ahead. Wolfe Research also shared a list of stocks that could be potential winners should Donald Trump become the President of the US.

What could happen if Donald Trump becomes President of the US has been a topic of debate and discussion on Wall Street over the past several months. In late January, when the Russell 2000 index jumped,  Zhiwei Ren, portfolio manager at Penn Mutual Asset Management, reportedly said that investors might be flocking to the “Trump Trade.” The Russell 2000  is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. Ren said, according to Wall Street Journal, that since Trump is a supporter of low interest rates and less regulation, small-cap stocks, which thrive under Dovish economic policies, were reacting positively to the increasing chances of Donald Trump becoming the leading Republican candidate for the upcoming elections.

In this article, we first scanned Wolfe Research’s basket of stocks the firm believes could be potential winners in case of a Trump presidency. From these stocks we picked 10 companies with the highest number of hedge fund investors.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Is Nucor Corp (NYSE:NUE) Stock Can Benefit if Donald Trump Wins US Election 2024?

Nucor Corp (NYSE:NUE)

Number of Hedge Fund Investors: 39

With over 50 years of consecutive dividend increases, steel company Nucor Corp (NYSE:NUE) is one of the best stocks that can benefit from a Trump presidency, according to Wolfe Research. Nucor Corp (NYSE:NUE) has been on an acquisition spree lately, expanding into new growth areas. In April, Nucor Corp (NYSE:NUE) bought data center infrastructure firm Southwest Data Products, Inc. (SWDP) for $115 million.

With the deal Nucor Corp (NYSE:NUE) entered the AI infrastructure market where specific solutions to maintain cool temperatures at data centers are in high demand. To address this market, Nucor Corp (NYSE:NUE) is creating a dedicated group.

Amid a decline in construction activity and pricing headwinds, Nucor Corp (NYSE:NUE)  gave a weak guidance and the stock is down about 12% so far. However, analysts believe this has created a strong buying opportunity for long-term investors. Its forward P/E is 14, lower than industry median of 15

Wall Street expects the stock’s price to reach $174 over the next 12 months, which is about 14% higher than the current levels.

Since Nucor Corp (NYSE:NUE)  is more exposed to non-residential construction activity and depends on government projects, its interest rate sensitivity is lower. Analysts expect the stock to benefit from the rise in government infrastructure spending. Nucor Corp (NYSE:NUE)  expects 5-8 million tons of incremental steel demand over each of the next four to five years due to the CHIPS Act, Inflation Reduction Act, and Bipartisan Infrastructure bill.

Overall, Nucor Corp (NYSE:NUE) ranks 7th on Insider Monkey’s list titled Analyst Says These 10 Stocks Can Benefit if Donald Trump Wins US Election 2024. While we acknowledge the potential of Nucor Corp (NYSE:NUE), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Nucor Corp (NYSE:NUE) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.

Disclosure: None. This article is originally published at Insider Monkey.