5 Value Picks to Ride Out US-China Trade Rift & Government Shutdown

Amidst heightened market volatility driven by renewed U.S.-China trade tensions, an ongoing government shutdown, and the start of earnings season, the article advocates for a value investing strategy. It highlights companies with high earnings yields (over 10%), strong estimated EPS growth, and adequate liquidity as attractive opportunities. Five specific recommendations meeting these criteria and holding a Zacks Rank #1 are Allied Gold (AAUC), Micron Technology (MU), Fortrea Holdings (FTRE), StoneCo (STNE), and HF Sinclair (DINO), positioned as potential long-term plays in a turbulent environment.

Analysis

The U.S. market is experiencing significant turbulence due to renewed U.S.-China trade tensions, including potential 100% tariffs on Chinese goods, an ongoing government shutdown, and the start of the third-quarter earnings season. These factors, coupled with anticipation of inflation and jobs reports and Fed Chair Powell's remarks, are driving high market volatility.

In this environment, value investing, focused on fundamentally strong companies trading below intrinsic worth, is highlighted as a strategy to identify long-term opportunities. The article emphasizes earnings yield (EPS/market price) as a key metric, particularly when it exceeds 10% and compares favorably to the 10-year Treasury yield, signaling potential undervaluation.

Five companies—Allied Gold (AAUC), Micron Technology (MU), Fortrea Holdings (FTRE), StoneCo (STNE), and HF Sinclair (DINO)—are presented as top picks, meeting criteria including a Zacks Rank #1, a Value Score of A or B, and robust estimated EPS growth. For instance, AAUC's 2025/2026 EPS estimates project 907% and 193% year-over-year growth, respectively, with recent upward revisions. MU also shows strong fiscal 2026/2027 EPS growth of 100% and 12%, alongside significant upward estimate revisions.

Key Decisions for Investors

• Consider allocating capital to value-oriented equities with high earnings yields (>10%) as a defensive strategy against current market volatility and geopolitical uncertainties.
• Evaluate the identified companies (AAUC, MU, FTRE, STNE, DINO) for their strong estimated EPS growth and positive estimate revisions, but conduct further due diligence on individual company fundamentals and sector-specific risks.
• Monitor macroeconomic developments, including U.S.-China trade negotiations, government policy stability, and Federal Reserve guidance, as these external factors could significantly influence market direction and the performance of value stocks.