A new Goldman Sachs report notes that the pharmaceutical industry may be mandated at some point to make essential drugs here in the United States. It also points out that the Pentagon has proposed legislation that would increase funding under the Defense Production Act to start the process of domestically sourced rare earth materials. There is also discussion about increasing domestic sourcing of defense electronics.

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While the prospect of every company moving all manufacturing and supply chain capacity back to the mainland is doubtful, it’s likely many will indeed leave China. The Goldman Sachs report said this:

While we expect select industries and companies to do more onshoring, we believe that many industries will continue to rely on global supply chains albeit with increased use of regionalization and an added emphasis on resiliency. By regionalization, we mean the use of countries near other key geographic areas in the supply chain (for example using Mexico for proximity to the US, or Vietnam for proximity with China). By resiliency of supply chains, we mean things like diversifying the geographic footprint of suppliers, carrying more inventory, and/or qualifying second sources.

The analysts feel that some companies will be “directional beneficiaries” from the increase in regionalization and the onshoring of supply chains. They point to specific companies that could benefit, and five are rated Buy at Goldman Sachs.

AmerisourceBergen

This is a health care idea for investors looking to add exposure to the sector. AmerisourceBergen Corp. (NYSE: ABC) sources and distributes pharmaceutical products in the United States and internationally.

Its Pharmaceutical Distribution segment distributes brand-name and generic pharmaceuticals, over-the-counter health care products, home health care supplies and equipment, outsourced compounded sterile preparations and related services to various health care providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and other alternate site pharmacies and other customers.

The company also provides pharmacy management, staffing and other consulting services; supply management software to retail and institutional health care providers; and packaging solutions to various institutional and retail health care providers. In addition, it distributes plasma and other blood products, injectable pharmaceuticals, vaccines and other specialty products; provides other services primarily to physicians who specialize in various disease states, primarily oncology, as well as to other health care providers, including hospitals and dialysis clinics; and offers data analytics, outcomes research and additional services for biotechnology and pharmaceutical manufacturers.

Shareholders receive a 1.64% dividend. Goldman Sachs has a $113 price target on the shares, and the Wall Street consensus target is $101.67. The last AmerisourceBergen stock trade on Friday was reported at $104.45.

Flex

This is a pure-play supply chain idea, and the low price makes it very attractive for more aggressive investors. Flex Ltd. (NASDAQ: FLEX) provides design, engineering, manufacturing and supply chain services and solutions to original equipment manufacturers in Asia, the Americas and Europe.

The company provides a portfolio of technologies in electrical/electronics, electromechanical and software, as well as cross-industry technologies, including human-machine interface, audio and video, system in package, miniaturization, Internet of Things platforms and power management. It also designs and integrates advanced data center servers, storage and networking equipment and data center appliances.

In addition, Flex provides value-added design and engineering services and systems assembly and manufacturing services that include enclosures, testing services and materials procurement and inventory management services.

Goldman Sachs has an $11 price objective. Note that the consensus target price is $13.08, and Flex stock closed Friday at $10.98 per share.

This technology outsourcing company does significant business with Cisco. Jabil Inc. (NYSE: JBL) provides electronic circuit design services, such as application-specific integrated circuit design, firmware development and rapid prototyping services, and it designs plastic and metal enclosures that include the electro-mechanics, such as the printed circuit board assemblies.

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The company also specializes in the three-dimensional mechanical design, comprising the analysis of electronic, electro-mechanical and optical assemblies, as well as offers various industrial design, advance mechanism development and tooling management services.

Investors receive just a 0.95% dividend. The $40 Goldman Sachs price objective compares to a $38.89 consensus figure. Jabil stock ended Friday at $33.89 a share.

McKesson

This is another health care idea for investors that want to start or add to a position in the sector. McKesson Corp. (NYSE: MCK) provides pharmaceuticals and medical supplies in the United States and internationally. It operates through four segments.

The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs and other health-care-related products. The Prescription Technology Solutions segment operates in the health care delivery system to connect pharmacies, providers, payers and biopharma for next-generation patient access and adherence solutions.

The International segment provides drug distribution services, specialty pharmacy and retail and infusion care services. Lastly, the Medical-Surgical Solutions segment distributes medical-surgical supplies and provides logistics and other services to health care providers.

Investors receive a 1.07% dividend. Goldman Sachs has set a $187 price target. The consensus target is $173.73, and McKesson stock had a closing price of $154.81 on Friday.

Nike

This is one of the most recognized and most valuable brands in the world, and a shift in production would be a gigantic move for the company. Nike Inc. (NYSE: NKE) designs, develops, markets and sells athletic footwear, apparel, equipment and accessories worldwide. The company offers Nike brand products in six categories, including running, Nike basketball, the Jordan brand, football, training and sportswear

The company also markets products designed for kids, as well as for other athletic and recreational uses, such as American football, baseball, cricket, golf, lacrosse, skateboarding, tennis, volleyball, walking, wrestling and other outdoor activities. It has apparel with licensed college and professional team and league logos.

Nike also sells a line of performance equipment and accessories comprising bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment for sports activities, as well as various plastic products to other manufacturers. Further, it provides athletic and casual footwear, apparel and accessories under the Jumpman trademark; casual sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks; and action sports and youth lifestyle apparel and accessories under the Hurley trademark.

Investors receive a 1.01% dividend. The $110 Goldman Sachs price target is in line with the $110.11 consensus figure. Nike stock was last seen trading at $96.28 per share.

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The Goldman Sachs analysts feel these five companies could see direct benefits from the movement of supply chains and manufacturing out of Asia, specifically China. It’s also a decent bet that the positive public relations boost that companies may receive is surely not being overlooked as a benefit to the structural changes that could be implemented.

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