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We recently published a list of 10 Stocks To Trade Without Tariffs And Interest Rate Fears. In this article, we are going to take a look at where ON Semiconductor Corporation (NASDAQ:ON) stands against other stocks to trade without tariffs and interest rate fears.
The Federal Reserve this week decided to keep interest rates unchanged, causing Donald Trump to lash out at the Fed chief. Jerome Powell seemed satisfied with the current state of the economy and the job market. What he did not like was the high uncertainty prevailing in the market.
There’s a good reason why the uncertainty is causing problems for the Fed. It can’t reliably predict the future path of the economy if it doesn’t know what data to put in its models. This is pretty much the same problem that stock analysts have. With tariffs causing problems for American businesses, many investors are seeing their portfolios shrink.
In such a scenario, we decided to look at stocks that are largely protected from both tariffs and interest rates. This ‘protection’ comes from the fact that their bull thesis is unlikely to be impacted by either of these factors.
To come up with the list of stocks protected from tariffs and interest rates, we looked at the recently released list of Goldman Sachs’ top stocks with micro-driven volatility.
A technician at a sophisticated computer hardware rig, emphasizing the company's chip-manufacturing capabilities.
ON Semiconductor Corporation (NASDAQ:ON)
ON Semiconductor Corporation is an intelligent sensing and power solutions provider. It operates in the Intelligent Sensing Group, Power Solutions Group, and Analog and Mixed-Signal Group segments.
The company’s stock has lost almost half its value in a year but the turnaround may be disconnected from the broader market or the economy. According to Wells Fargo, the company is setting itself up for a strategic acquisition of Allegro Microsystems.
“We believe the strategic rationale behind the deal makes sense from a product portfolio perspective / diversification for ON as it would become the market leader in magnetic sensing and add to its power semi business enabling better competition with larger peers.”
The analysts were quick to point out though that the core business still has weaknesses and that’s something investors should account for before they invest based on an acquisition trigger. The acquisition itself could bring volatility to the stock, as the Japanese owner Sanken, which has a 32.5% stake in the company, still hasn’t given its stance on the acquisition.
Allegro itself is currently going through a leadership change and things could look different once the new management comes in. This uncertainty could induce volatility and if it goes ahead, the stock could skyrocket.