The 2016 Democratic National Convention has confirmed Hillary Clinton as the party’s presidential candidate. This marks the first time a female has led a major party ticket, and now Clinton will try to become the first female to lead the nation when America votes for its 45th president this fall.
And now that it’s official, Clinton’s platform and plans can come into focus.
Of course, little of what Hillary Clinton will offer in her acceptance speech Thursday hasn’t already been unveiled during the campaigning process to date. The question now is, which stocks are best poised to thrive under Clinton’s intended economic, tax and fiscal policies?
Nobody has a crystal ball, but a bit of thought and logic puts these names at the top of the list of stocks to buy for another Clinton presidency:
Stocks to Buy If Clinton Becomes President: Textron (TXT)
Hillary Clinton and Republican Presidential hopeful Donald Trump don’t agree on much, but one thing they both agree on is that the nation’s defensive capabilities need to be bolstered. It’s not clear exactly what that means, but broadly speaking, it bodes well for defense stocks.
Lockheed Martin Corporation (NYSE:LMT) generally gets the nod as the preferred winner from the sector, and it’s not a bad pick. But a smaller company called Textron Inc. (NYSE:TXT) may be something of a Cinderella story under Clinton.
There’s nothing especially special about Textron. It makes land and air vehicles for military and civilian use. It makes lots of components, too. Combined, it’s a nice, diversified product portfolio that mostly meets the military’s massive logistical needs that don’t necessarily make for splashy headlines.
Case(s) in point: Last week, Textron subsidiary Bell Helicopter and Boeing Co (NYSE:BA) won a $545 million contract to supply naval tilt-rotor aircraft, and the buzz is that its super-low-cost ($20 million) Scorpion fighter jet is drawing some interest.
And the trailing price-to-earnings ratio of 15.4 makes TXT a bargain.
Stocks to Buy If Clinton Becomes President: Aecom (ACM)
Ever heard of Aecom (NYSE:ACM)? Most people haven’t. That’s OK. Aecom’s obscurity doesn’t make it any less of an opportunity with Hillary at the helm.
Aecom is a construction company that serves the infrastructure market. The federal government is already one of its biggest customers, but that relationship could really heat up if Hillary Clinton gets elected. That’s because one of the bigger pieces of her platform is a much-needed upgrade of America’s roads, bridges and utility services.
The specifics: Clinton says she will commit $275 billion to the improvement of the United States’ infrastructure, partially to create jobs, but mostly just because the country’s tattered roads need it. It would be the biggest such infrastructure investment in America’s history.
That certainly would benefit Aecom, which in addition to roads, highways and tunnels, also has had a role in high-profile projects such as One World Trade Center and the Barclays Center.
Stocks to Buy If Clinton Becomes President: Community Health Systems (CYH)
While Donald Trump and Hillary Clinton may agree that the nation’s defense needs to be beefed up, the two candidates couldn’t disagree more about the federal government’s role in individual citizens’ healthcare.
The GOP candidate wants to repeal the Affordable Care Act — better known as Obamacare — and the Democratic nominee will likely seek to increase the number of insured individuals by putting even more legislation in place that includes lower deductibles and more generous tax benefits. The most plausible end result of those measures? Another wide swath of the 30 million still-uninsured individuals will finally be able to afford coverage.
More insured people means more revenue opportunity for hospitals, and one of the best-positioned beneficiaries is Community Health Systems (NYSE:CYH).
To be fair, some of the reimbursement rates for healthcare are tepid at best, and debilitating at worst. Facilities like hospitals and clinics aren’t bearing the brunt of that hardship, though. They’ll fare even better with more insured patients coming through the door.
Stocks to Buy If Clinton Becomes President: First Solar (FSLR)
President Barack Obama hasn’t been shy about trying to steer America further away from fossil fuels as a source for its energy needs, and toward greener, cleaner sources. Under his tenure, coal’s creation of electricity has fallen from 48% in 2008 to only 33% last year. Renewables, conversely, now create 7% of the country’s electricity, up from 2008’s 3.5%.
Hillary Clinton also is a fan of low-pollution solutions, perhaps even more so than Obama. And her very favorite may be solar power.
Solar has not been an easy sector to remain excited about, granted. High-profile plays like SolarCity Corp (NASDAQ:SCTY) and Sunedison Inc (OTCMKTS:SUNEQ) have dished out nothing but misery for a couple of years now.
But it’s not the premise of solar power that’s the problem — it’s the business model some solar companies employ. Solar panel manufacturers stand to do quite well under a Hillary Clinton presidency. She vowed to ensure the country will be using 500 million solar panels by the year 2020 — which would be seven times the number installed right now.
That plays right into the hands of solar panel maker First Solar, Inc. (NASDAQ:FSLR).
Stocks to Buy If Clinton Becomes President: Procter & Gamble (PG)
Some would say there’s never a bad time to step into a consumer staples name like Procter & Gamble Co (NYSE:PG); people pretty much always eat and bathe. But a big powerhouse consumer goods name like P&G may actually thrive under Clinton, and it has everything to do with the U.S. dollar.
“I think Hillary would be the candidate least likely to defend the dollar, which is now too strong for U.S. exporters to bear. She’s also the freest of the free trade candidates. Look at her behind-the-scenes work with her husband to open up NAFTA. There may be another big cross-border economic initiative waiting in the wings in a new Clinton administration. Right now some of our biggest exporters are the household products brands, so I’m betting those companies would get a currency tail wind from Hillary that they might not enjoy in the Republican scenario.”
A strong dollar has been a lingering headache for Procter & Gamble; 60% of the company’s business is done overseas. In the first quarter of the year, revenue would have been 5% better had the dollar not been prohibitively pricey.
Stocks to Buy If Clinton Becomes President: Smith & Wesson (SWHC)
That’s not a misprint — gunmaker Smith & Wesson Holding Corp (NASDAQ:SWHC) is a name to buy even if mostly-anti-gun Hillary Clinton becomes the 45th (well, technically the 44th president of the United States.
There’s a time limit on the trade, though.
While it’s overstating things to suggest Clinton is seeking to abolish the Second Amendment to the Constitution of the United States, it’s not untrue that Clinton is at least for stricter gun laws, which will sooner or later make it difficult to purchase a gun. A tweet from last October speaks volumes:
“If Congress refuses to act to end this epidemic of gun violence, I’ll take administrative action to do so.”
Some read the message out of context, politicizing it, but it still paints a picture of her mindset. Preemptively, would-be gun owners may rush to finally buy a firearm (or buy another firearm) before it becomes prohibitively difficult to do so. That could mean a very productive few months or even a couple of years for Smith & Wesson … however long it takes her to put new gun laws in place.
SWHC isn’t a trade, however, to plan on buying and holding forever with Clinton in the White House.
Stocks to Buy If Clinton Becomes President: Akorn (AKRX)
If the war on soaring drug prices had a clear starting point and an instigator, it was Hillary Clinton on Sept. 21 of last year when she tweeted in reference to 550% price hike for an obscure drug:
“Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on.”
The message put the entire biopharma industry on notice; the era of jaw-droppingly high drug costs will soon be over.
Since then, the simple tweet has morphed into an entire policy plan, with most presuming her stamp on the Affordable Care Act will favor cost-effective generic drugs whenever feasible. There are several perfectly fine stocks to buy in this arena, but off-the-radar Akorn, Inc. (NASDAQ:AKRX) may be the best buried treasure in the bunch.
The kicker: Recently passed legislation just whittled down the FDA’s approval time for a generic at the same time future healthcare policy will favor generics.
Stocks to Buy If Clinton Becomes President: Walmart (WMT)
OK, how could White House policy impact a value-oriented retailer like Wal-Mart Stores, Inc. (NYSE:WMT)?
In a handful of big ways, actually.
One of them is the prospect of rising wages. The grassroots movement to raise the country’s minimum wage is already underway, but that movement would accelerate inasmuch as Clinton aims for a national minimum wage of no less than $12 per hour. At that wage, 35 million American workers would get something on the order of a 40% to 50% raise, making it possible to make regular shopping trips to Walmart when they may not even be able to afford visits to the retailer now.
Another big reason Walmart earns a spot on a list of stocks to buy if Hillary becomes President: She’s never met a global trade deal she didn’t like.
That’s not apt to change, either. Indeed, both Clinton and newly named VP running mate Tim Kaine are now vocally supporting the controversial Trans-Pacific Partnership that would encourage even more free trade of goods and money across borders.
That means easier access to cheap, foreign-made goods to stock Walmart’s shelves with.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.