Anytime a big voting event comes around, certain stocks are deemed winners and losers as the results roll in. Investors should pay attention to the ballot measures that are passed, as they can offer insight into which industries are likely to rally. Yesterday, three particular industries received favorable results that could mean big things for certain companies going forward.
Thanks to the latest policy changes in several states, it appears that ridesharing, sports betting, and cannabis companies might be in for some upside going forward. 3 stocks in those respective industries look like solid buys at this time. Let’s take a deeper look at them below.
Uber Technologies (NYSE:UBER)
Shares of the ridesharing company Uber have been through a bumpy ride over the last few months thanks to the pandemic. Ridesharing volumes were down significantly during the first half of the year as the pandemic disrupted transportation measures across the nation. The stock was also under fire thanks to the impending vote on Proposition 22 in California, which classifies app-based drivers as independent contractors and not employees. California voters passed the controversial ballot measure yesterday, which is a big win for ridesharing companies like Uber since they won’t be required to pay for their drivers’ labor benefits.
Now that the market has clarity on this issue, it might be a great time to add shares of the largest ridesharing company. As the economy continues to reopen and we make progress in controlling the pandemic, Uber’s earnings should rebound sharply. There’s a good chance that Uber reports its first profit in 2021 as it continues to take advantage of secular trends related to transportation and food delivery markets. The company has a strong liquidity position with over $7.8 billion in cash and investors should be optimistic about the investments that Uber is making in autonomous driving. The company’s stock was up over 14% during the trading session following the news.
Penn National Gaming (NASDAQ:PENN)
Another area that looks poised to benefit from the latest voting results is the gambling industry. Companies like Penn National Gaming received positive news as 3 new states voted yes to legalize sports betting yesterday. That brings the total number of states that have passed legislation to legalize sports betting to 25. It looks like widespread legalization is a real possibility in the coming years, which would be huge for an industry that could reach $6.2 billion in revenue by 2024.
Penn National Gaming is a company that owns and manages gaming and racing facilities and will likely see substantial growth as sports betting increases in popularity. While Penn stock has experienced substantial selling over the last month and has seen foot traffic decline in its casino locations during the pandemic, the increasing number of states that are in favor of sports betting is a big positive for the stock going forward as expanded market opportunities could translate to additional revenue. Penn has a 36% stake in Barstool Sports which operates a sports betting app called Barstool Sportsbook. The app has shown promising signs after its recent launch and could result in Penn National Gaming becoming an industry-leading company over time. The stock was up 6.55% in the trading session following the voting results and is up over 128% year-to-date.
GrowGeneration Corp (NASDAQ:GRWG)
The last stock on our list that could benefit from the latest election results is GrowGeneration Corp, a company that owns and operates retail hydroponic and organic specialty gardening retail outlets. With voters in five new states approving cannabis legalization measures, it’s clear that the industry is picking up steam. The idea here is that as cannabis markets expand, there will be increased demand for the growing supplies that this company supplies. GrowGeneration reported record revenue in Q2 of $43.5 million, which was up 123% year-over-year, and plans to have 50 stores open across 15 different states next year.
This is a company that continues to expand with savvy acquisitions, as it recently announced that it acquired The GrowBiz, a chain of hydroponics stores located in California and Oregon. This acquisition could generate an additional $50 million in revenue annually for the company and continues to strengthen GrowGeneration’s position as the leading hydroponic gardening supplier in the country. GrowGeneration stock was up 3.72% in the trading session following the election and is a nice option for long-term investors that are interested in the burgeoning legal cannabis industry.