3 Stocks About to SURGE Once Conflict Ends

The headlines may change every minute, but the war will be over sometime, and these three stocks are set to benefit when it is. Joining us today is Mark Lichtenfeld with the Oxford Club. He's going to share those three names that are set to benefit whenever this conflict ends. So, Mark, we're not really talking about a prediction on when this conflict might end today, because that seems a little impossible to do right now. As you know, the headlines change not even every day, but every hour, based on a post-truth social or a press conference or what have you. So, it's impossible to predict when it will end. I am pretty comfortable in predicting that it will end at some point, and when it does, certainly stocks will react just as they reacted to the beginning of the war. Yeah, before we get into the three names that you have for us today, talk about your strategy. I know you are a very solid dividend investor. Talk about your strategy when the market sees the kind of volatility that we've been seeing really since this conflict began. It seems the market reacts so much. What's your strategy during this kind of a time? I guess that's kind of a two-part answer. Looking at the dividend strategy, that is very much a long-term strategy, and it really shines during periods of volatility like we're seeing now. If you have a stock that's paying a 4 or 5 percent yield, and that dividend is growing every single year and it's a solid business, certainly the war and the disruption in oil can affect all areas of the economy. But generally speaking, these are stocks that we're holding for the long term that have gone through all kinds of periods before and have continued to raise their dividends. So, for those stocks, for the most part, I am not concerned at all. We know that stocks overall go up and to the right if you're looking at a chart over the long term, and so that's what we're banking on, that this time is not different and life will go on and the market will continue to do what it has always done over the long term. Shorter term is different. Shorter term, we are trying to get a handle on volatility, on sentiment. This has been an interesting situation because everything suggests the market should go lower, not just because of conflict, but because of the disruption to the oil supply that theoretically should really hammer global economies for the foreseeable future. Even if the war ended today, it's going to take a little while to get that supply chain back online because a decent amount of energy has been taken offline. So, everything says that the market should be going lower, and it is going lower, but we are starting to see a little bit of that risk on mentality. We are starting to see, not necessarily today, but last week, we were starting to see some stocks rallying. We're starting to see breadth increase. So, the market is not predicting such a dire outcome as you would expect given the headlines. Yeah, the headlines are a lot right now, and they are making a real impact on portfolios. We've heard from lots of our viewers who say their retirement accounts have been deeply affected by the downturn that we've seen over the last few weeks. I know that you are all about a wealthy retirement. That is a special newsletter that you have, and your strategy for how to weather these kinds of storms that we see, this volatility, so that your retirement funds are not so heavily impacted during events like these. If you want to learn more from Mark and his team at the Oxford Club, we have a QR code here and a link in the description that you can scan to get a free look at the Wealthy Retirement Program and how it can benefit you, especially during these times. Mark, I know we have these three stocks to talk about. There's a lot to dive into with these three names that you have for us today, but I do have one more question, and that's just addressing kind of that elephant in the room for those investors out there whose portfolios, especially if they're in their retirement, who have been impacted right now. What are your words of maybe some calming words for those who might be panicking when they see the real impact of what's happening in the world and how it's hitting their retirement accounts? What I would say, there are a couple of things. If there's money that you need within the next couple of years, let's say, two to three years that's in the market, you should take it out. Not because I expect the market to go any lower, but because you just can't afford the risk if that money is required to pay bills. And I say that whether we're in a booming bull market or a difficult market like we're in now. If you need money short term, it should not be invested in stocks. It should be somewhere safe. For the money that is not required immediately, it's important to remember that bear markets happen. They happen fairly regularly. When they happen, the average bear market only lasts nine months. Now, there's no guarantee that it's going to be nine months the next time we hit a bear market if in fact this becomes one. But generally speaking, they don't last years and years and years. A bear market that lasts a year and a half is kind of long in the tooth. And so while that would be a long year and a half, that would be not fun to be looking at your statements over those nine to 18 months, let's say. It's certainly something that people can endure and they have endured before. Most of us have. You just have to look at even the global financial crisis, which was the worst bear market in most of our lifetimes. And that turned around fairly quickly. The dotcom collapse also turned around fairly quickly. It was rough going, no doubt about it. It was scary, but it did turn around. It's important to remember that every single bear market has been followed by a bull market with no exception. So again, there's no guarantees of what happens in the next bear market. But if history is any guide, then they're short-lived and they bounce back and you just have to have your eye on the prize, which is building your wealth for the long term. Well, that is exactly what this list of three stocks you have for us today really focuses on of the stocks that might be getting hit a little bit right now, might be seeing some volatility right now. But once this conflict is over, these three may be some of the first to turn around. And Mark, I know these stocks are all in three different sectors. What were you looking for in the specific stocks you're recommending today? One of the reasons that I chose these stocks is because they have not been getting hit as hard as many others, including their sector. These are actually stocks in the worst performing sectors, but have been the leaders. So when these sectors turn around, assuming that they turn around when the war ends, then these stocks theoretically should be the leaders in those categories. Let's get right to that first stock that you are looking at in your list of three stocks set to benefit from the end of this Iran conflict. So the first one I want to talk about is Citigroup. The ticker symbol is C, and the financials have been getting hit really, really hard during this conflict. Citigroup, like I said, as well as the others, have been leading the group. So stronger stock in a weak group. I'm not going to say it's a strong stock, but it's been hanging in there. So yeah, outperforming the other banks. It does report earnings on April 14th, so it's coming up. And I'm expecting to see some pretty good news as far as improving margins. Citigroup is not who most people think of when they think of the big banks. It's the JP Morgans, the Wells Fargo, the Bank of America. That's usually who people think of with the big Wall Street banks, the big investment banks. But where Citigroup really shines is in their treasury services, so the cash management. So if you are a company and you need to have transactions, let's say you're based in London, yeah, JP Morgan is certainly going to be there for you, no doubt about it. But if you're in Mongolia, if you are in perhaps Saudi Arabia, if you're in, pick any place in the world, that's really where Citigroup shines. They are in 95 countries. They're in places that a lot of these major banks are not. And it's a very sticky business. And as, again, energy comes back online, as the supply chain gets back online, there's going to be more and more activity with those treasury services for Citigroup all over the world. So I really like it. Kind of the worst performers from a financial standpoint of the big banks. So there's a lot of room for improvement. As a result, the valuation is quite low. So I think there's a lot to like here. You're picking a stock that's been performing fairly well. So to me, that's the market telling you that this company is about to turn itself around and should be a big winner when this war ends and financial stocks start to perform again. Yeah, we've heard a few different times over the last few weeks about how hard the financial sector is getting hit. A lot of different credit card companies are really getting hit hard right now during this conflict. The question I have is why? Why are we seeing such an impact in this sector as a whole, not just Citigroup? And again, like you said, Citigroup isn't affected nearly as much as some of these other financial companies, really big names out there that have been hit down almost 20% over the last few weeks during this conflict. What's the connection here? Well, with the sky high price of oil, that is certainly a concern that that's going to slow the economy down. If the economy is slowed down or even goes into recession, there's less borrowing. So that's going to be a big part of it. Certainly less investment banking business to be done, fewer IPOs likely if the market is weak. So it would not be a good thing for the banks if this war continues for a while and oil prices stay high. Would you expect to see an immediate turnaround as soon as the conflict is over? Or is it really maybe a slower turnaround waiting for that economy to react to really the end of the conflict, the change in those oil prices, things like that? What is your timeline, do you think, as far as when the conflict ends, the financial sector and especially stocks like Citigroup might be seeing more of an impact? I expect it to rebound very quickly. And if it doesn't, to me, that would be a bit of a tell that perhaps the economy, the global economy is not about to bounce as quickly as you would expect. So I think that would be a very good signal to us, to the world about what the economy is likely to do because markets are generally forward looking mechanisms. So if financial stocks quickly rebound, that's probably a good sign that things are going to come back to normal. If they don't, then we could be in for a little bit of a slog economically. All right. Very good for stock and for sector to look at. Let's move on to the second area that you are looking at for a turnaround once this Iran conflict ends. Sure. So the next one is Verizon. And this is actually a stock that I have in the Oxford Income Letter, which is my dividend investing letter. And one of the big reasons is because that is a very big yield. It's 5.7%. Tough to find unless you're talking about REITs or MLPs. Just for a regular corporation, a 5.7% yield is outstanding. And the stock actually has been on a pretty good run. It had strong earnings in January and spiked. So after that initial move from the earnings, it's kind of treaded water for a month or so. You're still getting that 5.7% yield. They've raised their dividend every year for 21 years. So pretty good chance that they're going to raise their dividend again. Their cash flow more than covers their dividend. They're paying out about 50% of their free cash flow in dividends. So plenty of room to continue to raise that dividend. But the communications sector, again, not performing well. Verizon has been one of the leaders in that sector since the war began. And if REITs do come down, if the economy kind of returns to normal, interest rates settle down, there's going to be a lot more money for the consumer. And Verizon is typically one of the highest priced products and services within the telecom space. So an easier time for the consumer is going to be better for Verizon. They're likely to buy those premium products and services. And so theoretically, the government could start spending again on infrastructure if they're not putting so much resources towards the war. And Verizon just bought Frontier Communications, which specializes in rural communities and rural internet. So again, if the government were to open its purse strings to help build out rural internet infrastructure, that could be a big, big win for Verizon. That's an interesting theory, too, that once the conflict and the war is over, the government has more funds to use on buildouts and infrastructure and other areas of spend rather than on defense right now. So that's a really interesting thesis for why Verizon might see an increase after the war. Kind of similar question to what I had last time, too, is why is the communications sector specifically getting hit right now because of this Iran conflict? Why is this one area that we've seen impacted so much? And like you said, Verizon, the strongest one for sure in this sector, that earnings report has really helped carry it well through the volatility that we've seen. But the sector as a whole is down. Why is that? Well, I do think it's because the consumer is feeling unsure. So they may be scaling back on the amount of data that they're purchasing or, again, some of these premium products and services. I mean, a cell phone today has become an absolute necessity. So most people are going to have their phone, have some kind of service. But depending on their financial situation and their outlook, they may be looking for cheaper alternatives. And as we said, Verizon is kind of the premium, the higher price service. So in times of economic stress, that's likely that people are looking for the cheapest alternatives. So again, another reason why I think Verizon specifically will be quick to rebound as people become a little bit more positive on the economic outlook. Looking at both of these first two stocks you talked about, Citigroup and Verizon, these are both solid companies, familiar names. They both carry dividends. And their upside forecast isn't that huge. You look at what the analysts are saying, the consensus price target, there's not a huge amount of gains expected for both of these companies. So talk about that side of your strategy for investing, Mark. I think this is important for investors who are looking to build out that solid, balanced portfolio long term. What are you looking at when it comes to upside for stocks like this? My immediate answer is I don't care especially what their price targets are. Price targets are meaningless. And I used to be a sell-side analyst. So I can say with absolute certainty that analyst price targets are meaningless. And in fact, I prefer to go against the consensus when I can, when it makes sense. So if analysts are bearish on a stock, and I happen to be bullish, it makes me even more confident that I'm going to be right. Because analysts generally don't like to stick their necks out. They don't want to have to tell their research director why they were the only one on the street with a buy recommendation when everybody else had a sell or a neutral rating, in case they're wrong. It's very much a groupthink-type dynamic. So I'm not worried about that. And in fact, when Verizon was trading at high 30s, low 40s, nobody was talking about it. And now the stock is close to 50. So that's just a perfect example of why I don't care what the analysts say. They're always late to the party. They'll raise their estimates. They'll raise their ratings once the company has already beaten their earnings expectations and raised their guidance. And the stock is up 25%, 30%. So I wouldn't even look at what the analysts are doing or saying, except for the fact that when they do upgrade a stock, it can move the stock. So again, another reason to appreciate when most of them are neutral or bearish, because then that upgrade can be another catalyst for the stock once they come on board. Great answer. And also fun to hear your perspective on building a portfolio that's really going to build wealth for you in your retirement. If you want to learn more about Mark's strategy for a wealthy retirement, make sure to check out this program. It's a free sign up right now. You can scan the QR code or follow the link in the description to sign up for the wealthy retirement newsletter from Mark and his team at the Oxford Club. Mark, we've got one more stock to cover in a totally different sector. What's that third name that you're looking to see some growth after the end of this conflict? So sector that's been getting hammered and for obvious reasons is the airline industry and Delta Airlines, just like the other two, has been hanging in there and kind of leading the pack in a very difficult sector. Delta, arguably the best domestic airline, and they fly internationally, but as far as airlines based in the United States, arguably the best. They do have a small dividend, 1.1%. That's not why we're in it, but it's nice to have. But earnings this year, and that's even with the expectations from this conflict, are expected to grow 20% this year. But here's the really interesting thing about Delta and why earnings are expected to grow. They have their own refinery. They're the only airline in America that has their own oil refinery. So their cost for jet fuel is much lower than the others. I mean, the inputs into that refinery still are certainly going higher. The price of oil is certainly higher, but the cost to refine it is way lower than most other airlines because refineries make a nice profit when they refine the oil and send it off as jet fuel and other things. The other really interesting thing here is these refineries, they separate the oil. They make jet fuel and then they make diesel. For the most part, Delta doesn't need diesel and diesel prices have gone through the roof. So they're able to sell or trade this diesel for jet fuel. So I saw one analyst talking about that they actually might be making more in diesel than they're actually saving on the jet fuel side. So this refinery is really a bit of a lifesaver for them. In fact, in 2022, when Russia invaded Ukraine and oil prices spiked, the refinery saved Delta Airlines $800 million that year. So this is something that really moves the needle for them when we have a situation just like this. So earnings are expected to grow. I mentioned 20% this year. Over the next three years, 57%. So this is really expected to be a strong earnings grower. We're still seeing strong demand for flights. I mean, I don't know the last time I've been on a flight where there were many empty seats or any empty seats for that matter. It still trades at a pretty low PE. So it's trading at 11 PE, again, with 20% earnings growth this year and 57% over the next three years. So that's really, really cheap. Price to sales is below 1 at 0.7. So this is, I think, to me, this one is a no-brainer if you expect airlines to turn around as I do. Yeah, solid argument for this very solid company that's, again, been around for a while and continues to perform well no matter what is happening in the world. Thank you so much for this list today, Mark, of these three companies that could see a big turnaround when this conflict ends. I know in our last video together, you talked about the energy sector, and these three names are far less familiar. You can catch that video in our last list with Mark here.