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5 Stocks to Buy if Obama Wins

by: Teeka Tiwari September 10, 2008 | about stocks: ACN / ENER / GE / ICLR / LDK    

Teeka Tiwari

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A couple of weeks ago, I wrote an article titled “8 Stocks to Buy if McCain Wins”. In the spirit of balance, I want to give the same treatment if Obama should win.

To date, the Obama camp has promised more taxes on the rich, windfall profit taxes on oil companies, higher corporate taxes, higher payroll taxes, national health care and energy independence in 10 years. As these policies are attempted to be enacted, they will have very profound impacts on certain sectors. Corporate spending will be driven in very predictable directions.

One of the first things we will see is a movement away from full-time employees to more flexible temporary staffing. As employment costs and corporate taxes increase, you will actually see more reliance on outside consultants. Professional services firms like Accenture (ACN) - trading at $38.92 - should do very well.

One of the big beneficiaries of a higher corporate tax rate will be the nation of Ireland. Ireland enjoys some of the lowest corporate tax rates in the world (12.50%) and a highly educated workforce. If U.S. corporate tax rates do in fact go higher, watch for some big moves out of some Irish stocks as U.S. companies start moving to Ireland. One in particular to put on your radar is ICON (ICLR) - trading at $39.49 - which provides outsourcing services to the pharmaceutical, and biotechnology industries and the stock has been on fire.

To meet the lofty goal of energy independence within 10 years without the use of expanded domestic drilling, coal or nuclear energy will require an enormous allocation of capital to the alternative energy space. Everything from power generation to power delivery will have to be revamped. There will be some obvious companies that will benefit from this spending spree.

Energy Conversion Devices (ENER) - trading at $55.27 - makes thin-film solar cell products, nickel metal hydride batteries, and phase-change memory devices. While the stock has been roughed up of late, an Obama win could have this one in the stratosphere.

Another player in the alternative energy space that has been flying under-the-radar is LDK Solar (LDK) - trading at $40.76 . The company turns polysilicon into multicrystalline wafers, which are used in the construction of solar cells and solar modules. The company uses recycled materials in its production process and two -thirds of its business currently comes from Asia. With an Obama win, LDK stands to dramatically increase its U.S. business.

Good old General Electric (GE) - trading at $28.81 - could also be a big beneficiary of expanded alternative energy spending. Its going to take a lot of GE wind turbines and a massive infrastructure build out to make wind work and GE has the background and know-how when it comes to monster-sized projects.

At the end of the day, accelerating corporate earnings growth is what drives stock markets higher. I must admit that I am struggling to find where the broad-based earnings growth will come from should Barack Obama win the Presidency. This isn’t a partisan thing, it’s a business observation thing.

What’s your opinion? What stocks or sectors do you think will do well with an Obama win?

Disclosure: none

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This article has 35 comments:

  •  
    Sep 10 11:51 AM
    Well you just figured it out about LDK. Most people in North America know about this company
    Reply
  •  
    Sep 10 11:57 AM
    Thanks for the suggestions. I am downloading a hard copy for future reference. Given all the shameful corruption and dishonesty on Wall Street, OBAMA! may very well be it. I think it was Louis XIV who said: "Apres Moi, Le Deluge"
    Reply
  •  
    Sep 10 12:31 PM
    Cosmetics should do well under an Obama regime; e.g., Revlon, the lipstick manufacturer.
    Reply
  •  
    Sep 10 12:47 PM
    Obama has an abysmal voting record for renewables. Witness his "missing votes" for the current problem with the Fed tax credits. Shameful.

    Moreover, you do realize he has taken more money from the nuclear energy industry than nay other politician -- ever, and Illinois has more nuclear power plants than any other US State. I think you listed GE for the wrong reasons...
    Reply
  •  
    Sep 10 01:01 PM
    Obama fans don't need to be convinced that solar will prosper if he wins. That's why they are petulantly dumping alternative energy in the wake of the Republican convention. They're afraid we may have to wait a little longer for the people we have been waiting for. Fortunately for long-term solar investors, alternative energy will prosper whoever wins.
    Reply
  •  
    Sep 10 01:15 PM
    This is a good example of why investors should be educated. So, we not depend on goof balls making a living talking crap. We see it all the time. "I have the stock", "IF, you had invested in ....", Past history people.
    Now, we can learn from History. GE for my example will benefit </> it not matter. The company is so diversified even the CEO probably not know what all that company do. They provide the alternative as mentioned, but, they also provide the freedom we tend to ignore, as in, military (Aviation). GE is the "ONLY" company from the "Original DOW" still on the board. Read your History. If, people going to invest be informed about what you invest in. DO NOT listen to the "if you done this scam", if they had done "this" why they working or even charging money to tell?
    I tell because I know! Whine and Cry if you want, I tell free of charge. I do make my living from Stocks.
    This my first "Free" lesson. Buy low, sell high. GE looking low to me!
    Well, I could talk as long as the article and really say more. But, I just say; "Good Luck" remember when you buy low you may see a lot of red, but, in time it turn to "Green" ;-p
    Do you research and not depend on those trying to steer you for "Their" self-interests!!!!!!!! :-O
    Reply
  •  
    Sep 10 01:24 PM
    Alpha, as usual you are full of it. Where Obama did not vote on tax credit extensions, it wouldn't have mattered because the numbers weren't there. The most shameful failure to vote was by McCain in the most recent attempt to extend the existing credits. In that case, McCain was actually in DC, but did not supply the 60th yay vote to avoid a potential filibuster. He claimed to have to study the issue, which if true, shows that he doesn't know what's going on, and if false, puts him in direct opposition of Alternative Energy Invesment. Either way, it's an outrage.
    Reply
  •  
    Sep 10 01:48 PM
    Under Clinton the Dow Industrial Average climbed 247%. That's right, 247. Under Bush it has been absolutely flat (0.5% as of yesterday). Factor in eight years of inflation and the long-term implied load of trillions in foreign debt, plus implied outyear costs of a neglected infrastructure, and your calculator will melt if you total up the difference between Dem and GOP administrations in national wealth. What you don't address in your specious piece is that Dems seek to revitalize the middle class economy, which is what drives the GDP, which in turns drives corporate sales/earnings growth. It's the WHOLE economy, stupid.
    Reply
  •  
    Sep 10 01:49 PM
    Is SPWR becoming the Government main contractor for installing solar systems on Federal sites.
    They just completed installing a solar electric system on top of the roof top for the Dept of Energy Federal Building in Washington D.C. Sun power has also installed solar system for other government agencies such as the US Navy in Hawaii and Calf, The US Postal Service, and Air Force bases.
    They have under contract to build a Solar system at Kennedy Space center site.
    The company has no debt and over the last 3 months insiders have purchased a net 56.0K shares. This is in stark contrast to the 2-year quarterly average where insiders are net sellers and indicates that insiders are more bullish about SPWR's prospects for the next 6-12 months.
    They need no Gov tax incentives...The Gov is paying them for their solar systems.
    Reply
  •  
    Sep 10 01:57 PM
    IF SPWR is winning these contracts on a competetive bid basis, and the selection basis is truly cost/quality effectiveness, then SPWR should certainly be on any investor's watch list. Do they have something others in the sector don't, or are the Republicans granting no-bids again? How do we find this out?
    Reply
  •  
    Sep 10 05:51 PM
    SPWR would, in fact, stand to gain from US tax dredits. But the company is still way overvalued. Its forward PE's are higher than all the current PE's. LDK, in contrast to the editor's opinion, stands to gain very little from US tax credits. They have wisely been concentrating on the Asian market (Japan, India, Korea) and have been signing long-term multi-year contracts all along. So, as I've written here many times, I love LDK. I own a lot of LDK but not for the reasons given above,
    Reply
  •  
    Sep 11 09:15 AM
    broad based earnings growth will only exist if obama wins. he is a democrat. have you noticed stock market returns under 8 years of bush are negative. please dont blame clinton for this.
    Reply
  •  
    Sep 11 09:16 AM
    Clinton's reign included the Biggest Bubble in Nasdaq history. Millions of people lost Billions. All he was concerned about were the tax dollars coming into the Gov's coffers rather than if the Public was being Mislead.
    Reply
  •  
    Sep 11 09:21 AM
    clinton promoted investment in new technology, bush came into office and supported old technology(coal,oil,ni... ore,etc) the net result was slow job growth and a collapsing technology sector. you want to make money? vote for a democrat. please.
    Reply
  •  
    Sep 11 09:55 AM
    GDP and personal income also rose under Clinton. Tech bubble doesn't affect those metrics.

    Also, consistently since 1900 stock market does better under Democratic presidents. Even when you correct for the effect of which bunch controls Congress. This has been extensively written up and could easily be Googled.
    Reply
  •  
    Sep 11 09:59 AM
    Going forward, I believe that natural gas related stocks will be very profitable and especially so if Obama is elected in November.

    Natural gas or compressed natural gas (CNG) is so clearly a superior transportation fuel to that of foreign sourced gasoline that the only thing ---and it's a big 'thing" at this time, is in- place re-fueling infrastructure before it can become our national transportation fuel of choice.

    CNG is cleaner, cheaper, abundant and produced in America. CNG offers us the opportunity to get OPEC off our necks forever while we solve the problems associated with direct solar use.

    No more "oil wars" please---crude oil is not only dirty it's also very deadly!
    Reply
  •  
    Sep 11 10:18 AM
    After reading all this, I have 3 points to make.

    1. Some people had to much caffeine reading this article. I read this as a hypothetical scenario, alluding to what companies/stocks could benefit given what policies Obama said he would pursue.

    2. Another interesting point, hidden within the confines of Ha!'s message, is that individuals should conduct thorough research on a company before investing in them, rather than relying on hearsay.

    3. As for Dem this or Gop that, seriously, what politician actually does everything they say they are going to do :) ? My view is this; Whatever policies they choose, no matter how far out, will get watered down to the point where the politician can get enough support for it. Right or left doesn't really matter, its a battle for the middle ground. Whoever manages to get closest without going over, wins.
    Reply
  •  
    Sep 11 10:19 AM
    "To date, the Obama camp has promised .... higher payroll taxes.."

    Do some homework before writing something false. Obama's proposed tax cut help the middle class (<$250k per year) more than McCain's. McCain's tax platform is to extend the 15% dividend and LT cap gains tax and to grant tax breaks to oil companies. How does that translate into higher payroll taxes under Obama?

    Even most Democrats are unaware of this - just one more reason Obama will lose in November if he continues this campaigning-on-persona... strategy that lets a few cheap slogans at his opponent's convention convince millions that he will raise their taxes.
    Reply
  •  
    Sep 11 10:19 AM
    Paultaut: As long as you're laying blame for economic maladies (which I find strange), have you heard anyone mention anything in regard to a housing downturn lately? I think a few more people may have been affected by that than speculation in technology companies. A bit of advice; think, THEN, write. It's seemingly harder for some to do than I assumed.
    Reply
  •  
    Sep 11 12:37 PM
    One growth area we can count on should either patry's candidate triumph is government. Alternative energy is in the future with any result. Wind farms outside of DC and state capitols looks to be a sure bet. Also, co-generation heat exchanges adjacent to the legislatures, as well.
    Reply
  •  
    Sep 11 01:05 PM
    If he wins, or if it appears inevitable, I am buying gold and stock in Smith & Wesson and Walmart.
    Reply
  •  
    Sep 11 02:54 PM
    KK, please do some research of your own. During the Tech Bubble companies were spending on facilities they thought they would need 2 years down the road and hiring workers they would need 2 years down the road. Colleges courses that fed students everything internet related were the rage, recruiters were on every campus in the nation looking for talent. (Remember Silicon Valley?) These were very high paying jobs which required very little experience because the Sector was still in the process of development.

    The recovery was slow because We were not the generator, we were/are the recipient of externally generated Global growth. As a Service center economy, our contribution was virtually nil until the commodity sector started rolling and long dormant manufacturing sectors came to life. Unfortunately, because they held little promise, workers trained in the various sectors which were growing explosively had to be trained from scratch. Untrained employees Do Not receive High Paying Jobs (except in Congress on Both sides of the Aisle). Meanwhile millions of illegals were swarming across the border to take what lower paying jobs were available, combine the 2, stagnant pay.

    Both sides of the Aisle were pushing Home ownership, Both helped with mandates to Frannie to accomodate the surge and the supposedly independent Fed looked the other way as more and more esotheric methods were found to fuel that growth. When they stopped fighting deflation and increased interest rates, they overshot. Greenspan warned Bernanke but the great inexperienced Academic ignored him. The Housing bubble is still in the unravelling stage. Blame will be laid everywhere when its finally over. But its not over yet.

    Instead of thinking, try reading. There are dozens of books on the rise and demise of the Internet Bubble.

    Better yet, Gore Invented the Internet, lets blame him for its demise.
    Reply
  •  
    Sep 11 05:24 PM
    Obama wants to tax the rich and corporations?
    Gee, wonder where they get their money??
    It is from us, the moron!!
    Reply
  •  
    Sep 11 07:16 PM
    GE is chiefly a financial conglomerate now. Anything else won't move the needle.

    ACN is NOT where corporate America would turn for cost savings, and it most definitely does not qualify as temporary labor. Inconveniently for your thesis, the great boom in temporary labor decades ago began under Nixon and accelerated under Reagan and Bush I. It happened as manufacturers sought flexibility in dealing with the seasonality of business. Manufacturing is done mostly outside the US now. Corporate America won't be driven to temps by tax rates. Corporate America's chief problem will remain focused on how to improve product and service innovation, and sustain intellectual advantage over increasingly competitive rivals.

    ACN does sell IT expertise, but it's pretty generic expertise. It's oxymoronic for a large consulting firm to try to sell highly specialized business solutions. They need large markets. Give one company a proprietary advantage, and you can't exactly resell it. ACN's stuck selling vanilla.
    Reply
  •  
    Sep 12 11:25 AM
    During Clintons first 4 years, 35,000 American families pulled up stakes. Osama Obama wins......you think Rome is burning now? Hang on! Well I am already in the Middle East, might as well fly home to Chile, Portugal, Cyprus or any other country with low taxes and minimum government. Of course those already have lower taxes and less government then the US plus a less biased press.....what the hell, my forefathers were looking for freedom when they went to America.
    Reply
  •  
    Sep 12 07:56 PM
    Since 2000 when the PE of the avearge dow stock was over 30 and JNJ WMT GE MSFT o and others were 40-60 times earnings and have ALL earned more money but cap gins were minmial the Tax receipts during the last 8 years since the tax cuts are 20% higher than the best year of the 90s.The economy itself has NEVER been prosperous,except for a couple"bubbles&qu... like housing and finacials who MANAGED risk poorly. JFK Reagan and Bush all gave tax cuts and the next year TAX RECEIPTS INCREASED. lets pray the socilaist is not elected
    Reply
  •  
    Sep 15 08:46 AM
    Sandpiper: Shame on you with your Osama Obama slur. Please go back to your trailer and fondle your guns.
    Reply
  •  
    Sep 16 09:58 AM
    SolarGuy: SPWR insiders *sold* 2,753,330 shares.

    Chris B: Over 50% of Medicade expenses already come from the general fund, not FICA tax. The massive expansion will consume more funds. More spending + more debt = higher taxes; whether FICA or income tax is moot. Do not insult the author for stating an inconvenient truth.

    Me Again: You are correct about GE and financials. Regarding ACN - My wife's huge employer is outsourcing ***thousands*** of jobs through hundreds of tiny RFPs to hide the scale of layoffs. They are about to outsource thirty MANAGERS! ACN has won none of the bids, but if this trend is nationwide (it is), then the author is correct. ACN (not my favorite) will end up will a slice just because of scale. My neighbor just quite his engineering management job with GE because he was taught to "screw people," then outsource them. He took a job in FL through an outsourcing company.
    Reply
  •  
    Sep 19 01:02 AM
    Obama will win because the American people are finally getting that the Republican economic policies really do only benefit the rich. Reaganomics doesn't work! Not for 80% of us. Here are the numbers. Between 1983 and 2004, the top wealthiest 20% received 89% of the growth in wealth in the U.S. The rest of us, 80%, got 11% of the growth. The richest 1% got 33% of the total gain in wealth, the next 4% got 25% of the growth, as did the next 15%. The top 20% own 92.5% of all non home wealth. The bottom 40% own a minus 1.1% , meaning their debt exceeds their non home wealth.
    Mcain wants more of the same, permanant tax cuts for the rich. We now have the worst distribution of wealth in the developed world, and the worst in this country since the 1920s. Less than half as many Americans are in labor unions than when Reagan came into office. You can't fool all the people all the time. The jig is up.
    Reply
  •  
    Sep 19 05:26 PM
    webisking... the govt just bailed out Bear Sterns, took over Fannie Mae and Freddie Mac, and now owns 80% of AIG, the worlds largest insurer. If you think Obama is a socialist, well the GOP just socialized things for us.

    Oh... wait... thats right, they only socialized the debt. The profits are still privatized.

    Nice job Bush, I'd like to have those 8 years of my life back.

    If you vote GOP (yet AGAIN!) you deserve exactly what you get. Some people never learn.
    Reply
  •  
    Oct 06 03:52 PM
    The NYT did a piece showing how Obama had close ties to the Corn industry. Not surprisingly he voted FOR the Farm Bill which only implemented small cuts in corn based ethanol subsidies. I don't have any company recommendations but I'm guessing Ethanol should fare well under an Obama administration. And agrobusiness as well.
    Reply
  •  
    Oct 14 07:58 AM
    Obama has an all-star team of advisors in his corner, including Warren Buffet, Robert Rubin (star of the Clinton team), Bill Gates, and Nobel prize winners like Joseph Stiglitz. McCain said that his solution is to get "the smartest people around a table to sit down and find a solution," but the smart people have already told us they support Obama.

    McCain's team of advisors include Phil Gramm (who called America a "nation of whiners" in a "mental recession"), Carly Fiorina (who was fired from Hewlett Packard after they lost profits and had to fire 20,000 employees), and Meg Whitman (CEO of eBay, which has also had major layoffs).

    According to The Economist magazine, 80% of economists believe that Obama has a better grasp of economics and will pick a better economic team. See www.economist.com/worl...

    I'm not sure what the upside will be if Obama wins, but if McCain wins, global stock markets will plummet. McCain can talk about being a war hero, but Europeans and Asians are keeping their eye on economics, and if Europe and Asia lose confidence in America, the whole world will go down the tubes.

    I'm not sure what the upside will be if Obama wins, but if McCain wins, global stock markets will plummet. McCain can talk about being a war hero, but Europeans and Asians are keeping their eye on economics, and if Europe and Asia lose confidence in America, the whole world will go down the tubes.
    Reply
  •  
    Oct 27 08:52 PM
    Wow, both sides are so busy yelling at each other they forget they are in the same country and have the same end goals in mind, just different ways of getting there.

    Clinton created the foundation to the housing bubble... people did well because everyone was spending 30+ years of future earnings on homes, furniture, electronics, kitchens, etc, etc, etc. Of course the country would do good. The economy needs to expand each year (because of debt), and eventually all the people that could afford mortgages, had them. So they lowered lending practises and sub-prime mortgages shot up in volume. Now that they are coming due, the whole stack of cards is coming down.

    Most of that growth from Clinton to now, was false growth by using debt... people still have to pay those debts off - and many of those debts occurred under Clinton and Bush. Perhaps both sides are to fault and should stop finger pointing and figure a solution out instead.

    Obama/McCain... doesn't matter who wins, alternative energy (like solar) will do well as the technologies are becoming competitive in the free markets.
    Reply
  •  
    Nov 02 03:39 PM
    If Obama wins, if McCain wins. What does it matter? Neither are real change agents. Ron Paul was the choice. America failed. Obama will save the middle class $22.00 a month in taxes, if they even pay anything now. I laugh when the large crowds cheer his middle class tax cut. A total scam. 46% of all Americans pay not Federal Income Tax. People are simply stupid to buy into the propaganda.
    Reply
  •  
    Nov 06 06:00 AM
    I would not be so sure about ACN. Please read this:
    www.forbes.com/2004/06...
    Reply
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