• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Transportation

These Companies Could Win or Lose a Lot at the G7 Meeting

From auto makers to airplane manufacturers, there's plenty at stake at the G7 meeting.
By JIM COLLINS
Jun 07, 2018 | 03:45 PM EDT
Stocks quotes in this article: BA, NM, SBLK, EGLE, VLKAY, BMWYY

As world leaders descend on Charlevoix, Quebec for this week's G7 summit, trade has to be the first topic of discussion. One can question the relevance of the G7 on a global scale since it doesn't include China or Russia (booted from the G8 after the annexation of Crimea in 2014) but trade agreements affect U.S. relations with all countries. From an investor's perspective the prospect of trade wars is generally not a palatable one. For every national champion company that would benefit from protectionism, there are probably three or four others that would be hurt by it.

So, while I don't expect fireworks from this weekend's meetings, if you own stock in major multinationals, you should do homework on how less free trade could impact your portfolio holdings. China is the most frequent offender when it comes to trade barriers, in my opinion, but since Xi Jinping is not going to be in Charlevoix this weekend, we have to focus on relations between the countries that will be. So, here is a list of companies that could be affected (positively or negatively) by disagreements among the developed world's powers.

Boeing (BA) -- It is fitting that the leaders of France and Italy will be attending the G7, since BA's stock chart is a thing of beauty that would not be out of place in the Louvre or the Uffizi. It's just been a 45-degree line for Boeing's chart since the beginning of 2016, and that momentum can really only be stopped by one of two things: a rollover in the aerospace cycle or inter-country strife that would hurt Boeing's strong order book for both commercial and defense aircraft. At a valuation of 25x analyst consensus for 2018 earnings, BA shares are well above their historical average P/E, and it is fair to say those shares are priced for perfection. So any turmoil coming out of the G7 would be a rare bit of bad news for BA shareholders and could cause a 5-10% pullback in the shares.

Dry bulk shippers -- As it appears that China is agreeing to buy more U.S agricultural products (mainly soybeans) the Baltic Dry Index has jumped this week. Free trade is a boon for shippers of cargoes like coal, iron ore and grain, and I have been adding to and reinitiating positions in my favorite dry bulk names -- Navios Maritime (NM) , Star Bulk (SBLK) , and Eagle Bulk (EGLE) -- this week.

Autos -- President Trump's conjecture about increasing tariffs on imported cars was chilling to hear for someone who followed auto companies both in the U.S and Europe for 11 years. I'm a long-term fan and shareholder of both VW  (VLKAY) and BMW (BMWYY) . Those two companies would be hurt the most (along with Daimler) from an auto trade war. Again, it is China and its ridiculous 25% tariff on imported autos that is the main offender in the restriction of free trade for autos. That said the E.U.'s 10% tariff on imports of autos from the U.S. is also indefensible in a world of free trade, and the U.S. 2.5% tariff on imported cars represents an imbalance. Those who focus on the so-called "chicken tax" of 25% on vans and pickups imported to the U.S. have zero understanding of the realities of modern offshore car production. That U.S. cars are taxed at a rate that is 4x higher when exported to Europe is simply not fair, and our 45th president has a keen sense of winning and losing at everything. Any progress on lowering trade barriers, therefore would be a huge win for the German carmakers, and also beneficial, albeit less so, to Ford F, GM GM and Fiat Chrysler FCAU.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Collins' firm was long NM, SBLK, EGLE, BMWYY and VOW3.

TAGS: Investing | U.S. Equity | Transportation | Consumer Discretionary | Consumer Staples | Stocks

More from Transportation

It's Tempting to Quit This Portfolio While I'm Waaaay Ahead, but I Won't

Jonathan Heller
Apr 7, 2021 10:00 AM EDT

The 2021 Tax Loss Selling Recovery Portfolio is killing it, which makes it tempting to shut it down and harvest the profits, but we'll let the experiment roll on.

Can Ford Keep on Truckin'?

Bruce Kamich
Apr 5, 2021 2:55 PM EDT

We are updating our technical strategy on Ford.

Thunder Bridge Acquisition's Charts Look Familiar

Bruce Kamich
Apr 1, 2021 9:14 AM EDT

I've seen this pattern on a number of SPACs since February.

Hyliion Holdings Could Bounce but Overhead Resistance Looms

Bruce Kamich
Apr 1, 2021 8:24 AM EDT

The charts of the maker of electrified powertrain systems largely are painting a bearish picture for its shares.

Traders Get a Round Trip With Shares of Virgin Galactic

Bruce Kamich
Mar 26, 2021 10:25 AM EDT

Let's take a look at the charts and indicators.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • 11:18 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 5 Pillars of Exceptional Trading
  • 08:05 AM EDT BOB LANG

    Bitcoin vs. Gold: Which Should You Invest In Now?

    Read my article TheStreet here!
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login