While Election Day still weeks away, investors (and the bookies) are already declaring a winner: With polls widening, Democratic nominee Hillary Clinton is far and away the most likely victor.
Since Clinton is widely considered the “status quo” nominee, unlikely to rattle global trade and financial markets like Trump would, it’s a little odd that stocks aren’t responding more joyfully. Two main concerns are bothering investors.
For one, the Federal Reserve seems to be chomping at the bit to raise interest rates after the presidential election. Should Clinton win, stocks are likely to take the result in stride. And that should give the Fed the confidence it needs to pull the trigger on another rate hike.
And two, while Clinton may be status quo she is carrying her own set of desired policy changes.
Clinton’s plans to control drug prices, spurred by the backlash over EpiPen pricing by Mylan NV (NASDAQ:MYL) back in August, are focused on increasing competition by easing the approval of generic and “biologic” alternatives, prohibiting “pay for delay” arrangements, and allowing the import of drugs from overseas.
As you can imagine, this won’t be good news for industry profitability. So it’s not surprising that the Health Care Select SPDR (NYSEARCA:XLV) has dropped more than 8.3% from its August high to return to levels not seen since June. Or that the iShares Biotechnology ETF (NASDAQ:IBB) has lost more than 11.5% since the end of September.
To prepare, here are seven healthcare stocks at risk from a Hillary win.
Stocks to Sell When Hillary Wins: Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) shares broke down and out of a tight three-month consolidation range on Tuesday after reporting an earnings beat that was spoiled by rather tepid forward guidance. Earnings came in at $1.68 per share, two cents ahead of expectations. Revenue was in line.
Watch for a move down to support near the 200-day moving average, a 4%-plus decline from here. The stock has been a steady gainer for years but suffered a 20% flash-crash decline back in August 2015.
Stocks to Sell When Hillary Wins: Eli Lilly & Co. (LLY)
Eli Lilly and Co (NYSE:LLY), developer of drugs to treat a wide range of condition including diabetes, depression, and various cancers among other treatments, has moved back below its declining 50-day moving average after double topping near $83.
Shares have been stagnating in the upper-$80s since the summer of 2015.
The company will next report results on Oct. 25 before the bell. Analysts are looking for earnings of 96 cents per share on revenues of $5.3 billion.
Stocks to Sell When Hillary Wins: Medtronic (MDT)
Medtronic PLC (NYSE:MDT), maker of medical devices used to treat cardiac and other conditions, saw its share drop out of a four-month trading range last week on product recall issues, returning to levels last seen in June.
This is the first significant pullback for the stock since the summer of 2015. Specifically, the concern is that a coating on certain neurovascular products could cause blood clots.
The company will next report results on Nov. 22 before the bell. Analysts are looking for earnings of $1.11 per share on revenues of $7.5 billion.
Stocks to Sell When Hillary Wins: Merck (MRK)
Merck & Co., Inc. (NYSE:MRK), maker and developer of a wide range of drug therapies, is seeing shares remain in a tight three-month range.
Significantly, however, prices have drifted below their 50-day moving average, a level that has consistently supported the stock since the recent uptrend started in February.
The company will next report results on Oct. 25 before the bell. Analysts are looking for earnings of 99 cents per share on revenues of $10.2 billion.
Stocks to Sell When Hillary Wins: GlaxoSmithKline (GSK)
GlaxoSmithKline plc (ADR) (NYSE:GSK) shares have dropped below their 200-day moving average for the first time since March, violating the support level that held it back in June. That brings the total decline from its August high to more than 9%, a level associated with overhead resistance from the early 2015 high near $45.
The company, maker of a variety of pharmaceutical products including vaccines, HIV treatments, and over-the-counter treatments including Nicorette and antacids, will next report results on Oct. 26. Analysts are looking for earnings of 30 cents per share on revenues of $7.4 billion.
Stocks to Sell When Hillary Wins: Allergan (AGN)
Allergan plc Ordinary Shares (NYSE:AGN), maker of treatments for ailments affecting the nervous system, GI tract, women’s urology, and more, drifted below its 50-day moving average back in August and has thrice failed to retake that level.
With its declining 50-day average below the declining 200-day average, the stock is in a confirmed, persistent downtrend that started in the summer of 2015.
The company will next report results on Nov. 2 before the bell. Analysts are looking for earnings of $3.60 per share on revenues of $3.7 billion.
Stocks to Sell When Hillary Wins: Abbott Laboratories (ABT)
Abbott Laboratories (NYSE:ABT), maker of treatments for conditions affecting the digestive, pancreatic, and endocrine systems, is testing below its 200-day moving average once again, repeating a decline suffered back in September.
Shares are now down more than 11% form their high set in late July, continuing a choppy sideways trading pattern that has marked the fallout from the high set in mid-2015.
The company will next report results on Jan. 18.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
