Play the Renewed ‘Made in America’ Trend

Many companies were caught during the pandemic as borders shut down. Without reliable just-in-time delivery systems operating, they’ve been working to diversify their manufacturing operations.

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  • For higher-level goods such as semiconductors, this means reversing a multi-decade trend to once again make goods in America. Signs of this trend have just started to pop up, and they’ll likely increase in the years ahead. While there may be higher labor costs to manufacture stateside, most businesses see the development as a positive one.

    For instance, Apple (AAPL) just announced that it will shift its 5G chip acquisition to Broadcom (AVGO). That coincides with Broadcom’s manufacturing expansion to the U.S.

    Shares of the chipmaker are already up 30 percent over the past year. But they’re also still inexpensive at 16 times forward earnings. And the manufacturer still sports an impressive 37 percent profit margin.

    Action to take: Although shares are at a 52-week high, they likely still have more upside ahead. Investors may want to buy a small stake now, and add to it on any subsequent decline in shares. At present, Broadcom yields 2.7 percent.

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  • For traders, the September $740 calls play well to the current uptrend in shares. Last trading at about $24.40, the option can likely see a mid-double-digit-gain or better.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.