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2016 Election Profits Bulletin: Our Top Picks

November 6, 2016, 6:00 am

With select sectors ready to do well regardless of who wins on Tuesday, now is the time to position your portfolio to profit from any post-election bounces. Last time, we talked about five areas of the market that fit this bill. In today’s bulletin, we’ll dive deeper into these sectors and share our top picks – both stocks and ETFs – that we like best to outperform.

Healthcare: There are still some questions surrounding this sector that have continued to pressure stocks, but clarity in the White House could go a long way to providing some relief. Merit Medical Systems (MMSI) is an intriguing healthcare name that makes life-saving cardiology and vascular procedures possible through its relatively low-cost products – making potential government interference doubtful. If you’re looking for a less pure play, Patterson Companies (PDCO) focuses on animal and dental health, which is shielded from pricing problems and other sector concerns. The company is growing revenue in the mid-single digits and expects the consumable dental market to keep improving after its summer slump.

Aerospace & Defense: When it comes to this sector, bigger is better. iShares U.S. Aerospace & Defense ETF (ITA) gives investors exposure to U.S. companies that manufacture commercial and military aircrafts, as well as other defense equipment. Some of its top holdings include industry leaders Boeing (BA), United Technologies (UTX) and Lockheed Martin (LMT), so it’s poised to benefit from big-name sector movements. Speaking of leaders, Boeing (BA) is an attractive play on its own. It is the largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems in the world. BA just won another major U.S. defense contract to develop fighter jet systems and we believe it will continue to be a go-to name for both Washington and Wall Street.

Infrastructure: As we talked about yesterday, both candidates are ready to pour big bucks into improving America’s infrastructure and that means plenty of work for construction material companies. Eagle Materials (EXP) produces construction products and building materials used in residential, commercial and large infrastructure projects, and is also growing earnings at 20%+ annually. Ireland-based CRH plc (CRH) is another provider of building materials to the United States and has an average earnings estimate of 19% the next two years. Other top picks include Granite Construction (GVA), which actually builds the roads, and Quantas (PWR), which is itching to take the electrical grid into the new century.

Automation/Robotics: This is just one area of tech that we like right now and see two attractive plays we want to share with you. The first is ROBO Global Robotics & Automation ETF (ROBO), a basket of 85 stocks from around the globe that are taking this innovative technology to some of the biggest areas in manufacturing, energy, healthcare, security and more. The ETF is also outperforming the S&P by 4X, and doesn’t look ready to slow down. Brooks Automation (BRKS) is another well-rounded pick. The company has 3 divisions: semiconductor automation, life sciences solutions, and cryogenics. Earnings are impressive and its bullish chart is showing an attractive set up with shares pulling back to support ahead of its next leg higher.

Cloud Computing: Neither Clinton or Trump will change the cloud’s domination in corporate IT departments, and there are two plays forming here. Our favorite is Red Hat (RHT), the maker of the ubiquitous Linux operating system that has a presence in IT departments of major corporations. Linux eases the transition to the cloud, and is showing very high growth from an emerging applications business, with revenues up 30% in the most recent quarter. RHT’s EPS will grow 22.5% to $2.24 this year and another 20% to $2.70 next year, and its valuation is reasonable at 20X next year’s EPS estimate considering this amount of growth.

Another, more conservative way to play the cloud is Microsoft (MSFT). The company is growing slower than RHT, but revenues were still up 3% in the past quarter on an adjusted basis. MSFT is helping modernize the PC by moving Windows and Office to web applications, and similar moves are occurring for MSFT’s server offerings for business customers. With plenty of momentum now after the stock was lackluster most of the year, MSFT is a name to consider as you can buy it for less than 20X June 2018 EPS of $3.05.

We hope today’s bulletin has given you some food for thought for you portfolio as we prepare to make the most of the post-election market environment. Some of these names are already in our Buy List while others are on our watch list as we wait for the right opportunities to add them in.

We’ll be talking much more about year-end investment strategies once the votes are in, so stick with us as our special series continues!

27 comments

  1. there is no mention of the losing stocks like

    cah
    flo
    gwph
    team
    omc
    pls give some words on how you see the future

    Comment by david on November 6, 2016 at 7:27 am
  2. I have heard people talked a lot about canabis industry post election

    Comment by Tuoc on November 6, 2016 at 8:08 am
  3. Good morning!With bonds what will happen;Especially

    with high yield bonds!Top ortions?

    Thank you!!

    Comment by george on November 6, 2016 at 8:13 am
  4. Thank you! Your newsletter is by far better than those I pay dearly for. Sally

    Comment by Sally Davis on November 6, 2016 at 8:37 am
  5. Thanks, enjoy your picks. What’s you opinion on NVDA? Base chips for graphics and self drive cars.

    Comment by Rog on November 6, 2016 at 9:19 am
  6. The gains you listed in the side column of today’s bulletin say they are so far in 2015. I assume you meant 2016. I was an editor for 40+ years and can’t help spotting typos.

    Comment by Charles Pinyan on November 6, 2016 at 9:32 am
  7. It is very helpful. Thanks!!

    Comment by Michael on November 6, 2016 at 10:36 am
  8. Hilary cuts to the bottom line, to what really matter – timely, actionable ideas…..without the grinding sales pitches we see from other newsletters.

    Comment by Mark Flor on November 6, 2016 at 10:52 am
  9. I am a member of both gamechangers and value authority and received the same bulletin for each. The header shows gamechangers.com. My question is whether your picks should be in one or the other or both. Some of the names are already held i.e. Patterson, redhat, and merit.
    Since I receive buy and sell alerts on both services it helps to identify which group they belong.
    Posting this comment is not necessary just a thought. I will say that I feel both services are valuable and I appreciate your attention to details and timely advice.

    Comment by mack grant on November 6, 2016 at 12:54 pm
  10. It may be appropriate to mention that these recommendations are for long term consideration. It is virtually useless to put out such a multitude of names for traders, for whom timing is crucial. When to purchase any of these stocks is just as important as the fundamentals.

    Comment by Gary on November 6, 2016 at 3:30 pm
  11. Every body thinks they got the wining formula? so far no double digits gains in absolute Capital????? So, who we can rely on? every is gaming…..

    Comment by Carlos on November 6, 2016 at 5:10 pm
  12. VERY HELPFUL THANKS.G .S

    Comment by guillaume sacre on November 6, 2016 at 5:23 pm
  13. I think this information is very helpful ,but all my investment money’s are tied up untill after the election.due to the nonsensical movement of pre election.

    Comment by robert jensen on November 6, 2016 at 5:42 pm
  14. Interesting and helpful.

    Comment by Tony on November 6, 2016 at 7:51 pm
  15. When should we invest? Today, Monday before election day, on election day, after election day? Could anything game changing happen between election day and 19th December, when the formal election will take place? (the one killer email, health problems or worse of one President elect, etc)

    Comment by Martin on November 7, 2016 at 4:56 am
  16. Will you be informing us of when to make the trades and what the amount to pay? I have to say that I have funds in shares that are losing.

    Comment by Suzanne Lafond on November 7, 2016 at 12:42 pm
  17. What is your opinion on the bond market bubble threat to the US and world economies? With country debts so high after the past 8 years of priming the pump, what can sustain the stock market and bond market?

    Comment by Patrick on November 7, 2016 at 6:58 pm
  18. You have find in shares that are losing? Haha, welcome to the real world! If all your shares were winning all the time I’d say you have a billion dollar system!!! I take it the companies listed you are presuming will either not be effected or do well whichever candidate becomes president? I wouldn’t run out & buy any of these stocks until you do some diligent research! I also assume that there’s other great picks within these catagories??? I really think it’s a guessing game starting on Election Day!

    Comment by Christine Trammell on November 8, 2016 at 8:19 am
  19. I echo the comments of some of those above! Results in all 3 subscriptions I have followed over the past year(ACR, VA, and BO Stocks) have certainly brought brought me no closer to “millionaire” status! Lots of positive hype but little follow through on many of the recos.! Maybe the next 2 months will be positive but the future beyond is iffy at best in my humble opinion!

    Comment by Peter P. on November 8, 2016 at 9:04 am
  20. I have not only heard a lot about the possible sky is the limit trend for marijuana stocks/etfs after the elections with California and other states voting on recreational marijuana. I tried a newsletter from one group touting this very heavily, but after investigating it the investments were rated with companies that needed a $50k stake from you to be a participant. I am sure your customers would like to know your views on what stocks/etfs if there are any out there at present to check out. I am thinking a lot of these companies do not have public stock for sale at present. Your comments would be appreciated. Thank you.

    Comment by Frank on November 8, 2016 at 9:47 am
  21. i should know better because it never changes. soon as you give money online they always try to get more. the first 6 picks that i saw was, bery (but under 36.40) stock was 45.00 and has never dropped. symc ( buy under 25.25) stock is still under 25.25 uthr ( buy under 127.00) never been over 123.00. wu (buy under 21.00) never even reached 21.00. pypl (buy under 40.20) finally a small winner 41.58. anyway i’ll write down that 1400.00 as a donation. i’m just glad i didnt take any of your advise.

    Comment by lenny dipasquale on November 8, 2016 at 9:43 pm
  22. Yes I could have wrote the above as far as potential but like another commented where are the specifics and have seen no followup on losers like TLND when to sell except when all is lost? Also strange a winner which could have been very big FNSR was instructed 5 days before big increase in price?

    Comment by Charles on November 9, 2016 at 8:47 pm
  23. con estas poblaciones puedo comprar opciones sobre acciones llamadas o puts a la alza o a la baja

    Comment by jose anleu on November 10, 2016 at 10:09 pm
  24. Website problems have shut me out again. (Got this one reccommendation because it is not protected by now.) I call you and you picked my password and then let me in, for a few months, then not, for unknown reason. Please let me in again, on Value Authority. Or tell me to pick my own password. Thanks for all your help. FHD

    Comment by Florence Davidson on November 11, 2016 at 10:40 am
  25. My comment was erased . Please fix my password you chose for me.

    Comment by Florence Davidson on November 11, 2016 at 10:42 am
  26. keep up the good work. gs reco – great

    Comment by paul on November 15, 2016 at 1:25 am
  27. please send me some info

    Comment by DJ Eimandoust on November 19, 2016 at 5:27 pm

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