The McCain Victory Portfolio
Posted
Nov 04 2008, 02:06 PM
by
Anthony Mirhaydari
Rating:
Here's a list of stocks that should benefit if John McCain becomes the nation's next president.
This basket is a combination of my own picks and those of market strategists at UBS, who analyzed the candidates' stated policies, the outlook of industry watchers and a survey of 721 investors. (Check here for picks after an Obama victory.)
Healthcare:
The managed-care companies are less likely to see fresh regulation or competition from the federal government under a McCain administration. It is unlikely there will be a big shakeup of the private insurance system, as McCain hopes a tax rebate and inter-state competition will increase participation. Top picks include UnitedHealth Group and Humana.
Energy:
With chants of "Drill baby, drill" echoing across crowds of McCain supporters, you know that the exploration and production, as well as field service companies, are drooling at the prospect of expanded domestic drilling for oil and natural gas. The major integrated oil companies will avoid windfall profit taxes and restrictions on public drilling leases. Top picks include ExxonMobil, Halliburton, Transocean, and Schlumberger.
The coal industry will also benefit, although Democrats claim to be in favor of "clean coal" through carbon capture and sequestration technology. In the near-term, however, a McCain administration will be much less likely to halt construction of new coal-burning generators as this technology is perfected. He is also more likely to support coal-to-gas and coal-to-liquid technologies that seek to capitalize on America's abundant coal resources. UBS notes that McCain's cap-and-trade emissions apparatus seems less onerous than Obama's. Top picks include Peabody Energy and CONSOL Energy.
Retail:
Higher income citizens will be less likely to see a tax increase, and would probably see further tax cuts under McCain. Top picks include Nordstrom and Tiffany & Co.
Industrials:
The permitting process for new power plants, especially new nuclear plants, will likely be streamlined under John McCain. Top picks include Fluor and The Shaw Group.
Defense spending will likely increase, as the conflicts in Iraq and Afghanistan continue. However, based on McCain's stated goal of trimming pork out of the defense appropriations process, big ticket items from Boeing and Lockheed Martin will likely be shunned in favor of spending on programs directly supporting the ground forces of the Army and Marines. Top picks include General Dynamics, Oshkosh, Raytheon, and Alliant Techsystems.
Telecom:
Republicans as a whole have been more supportive of mergers and acquisitions in the telecom space. As part of the Senate Commerce committee, McCain preferred market-based solutions to rule-based approaches when it came to issues like net neutrality. McCain win would be positive for DirectTV.
Financials:
The property and casualty insurers will benefit from the Republicans' general distaste for trial lawyers. Also, stable or reduced capital gains, dividend, income, and estate taxes should help securities brokers and asset management firms. The top picks here include Arch Capital Group, The Bank of New York, Federated Investors, State Street, Franklin Resources, and Charles Schwab.
Disclosure: I don’t own or control shares in any of the companies mentioned. I can be contacted at anthony.mirhaydari@live.com
Related reading:
The Obama Victory Portfolio
Are freebies for voting illegal?
The election won't matter to the economy
Why interest rates are headed to 0%
Recession to end in June?
