BofA Presents: How To Invest If You Expect Obama To Win

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Managed Care

Rationale: President Obama's health care reform is a focal point in the 2012 elections. The current reform plan is viewed as negative for Medicare providers, who may face margin compression if forced to move their product to exchanges, whereas Medicaid expansion under health care reform will benefit Medicaid providers like WellCare, according to BofA analyst Kevin Fischbeck.

Top Stocks: WellCare Health Plans (WCG)

Hospitals

Rationale: An Obama victory and the subsequent implementation of health care reform would benefit hospitals because the expanded insurance would allow hospitals to get paid for emergency services they are already providing without payment to the uninsured.

BofA analyst Kevin Fischbeck also notes that in fiscal cliff negotiations, Democrats are more likely to attempt tax hikes than spending cuts, which would be better for hospitals than the reverse outcome.

Top Stocks: HCA Holdings (HCA)

Life Sciences & Diagnostic Tools

Rationale: BofA analyst Derik de Bruin's case for life sciences stocks is that "Democrats are generally viewed as being more generous when it comes to R&D funding." However, if President Obama is reelected but Republicans take control of Congress, de Bruin sees such a scenario as negative for life sciences stocks as politicians wrangle over budget matters.

Top Stocks: Illumina (ILMN), Thermo Fisher (TMO), Life Tech (LIFE)

Pharmaceutical Distributors

Rationale: Progress on health care reform, implicit in an Obama victory, would benefit pharma companies who would see an increase in drug sales to newly insured customers.

However, according to BofA analyst Robert Willoughby, the positives for pharma stocks from health care reform may be offset by deficit reduction effects. Willoughby therefore recommends investors should focus on pharmaceutical distributors, "as they are not tied directly to government reimbursements."

Top Stocks: Amerisource (ABC), McKesson Corp (MCK), Cardinal Health (CAH)

Transportation

Rationale: The transportation sector would mostly benefit from a Romney victory as opposed to a reelection of President Obama.

However, BofA analyst Ken Hoexter says there is one bright spot in transportation in the event of an Obama win, writing that "unionized less-than-truckload carriers, such as ABFS, may benefit if pension reform legislation were passed, with the government absorbing additional costs for multi-employer pension plans."

Top Stocks: Arkansas Best Corporation (ABFS)

Alternative Energy

Rationale: Alternative energy benefits from an Obama reelection through two avenues, according to BofA analyst Steve Fleishman. The first is stricter environmental requirements for businesses, which hurts the coal industry and therefore supports alternative energy.

The second avenue is renewable tax credits. Fleishman notes that "Obama supports the extension of the wind production tax credit (PTC), while Romney appears to be leaning against it," meaning that "an extension would be positive for large renewable generators such as NextEra (NEE)."

Top Stocks: NextEra Energy (NEE), Exelon Corp (EXC)

Telecoms

Rationale: BofA analyst David Barden writes that another Obama administration Department of Justice would be more hostile to mergers in telecoms than a Romney DoJ would be.

For this reason, an Obama victory "favors smaller M&A targets (PCS, LEAP), which are unlikely to raise DoJ concerns if they are the subjects of potential combinations," according to Barden.

Top Stocks: MetroPCS Communications (PCS), Leap Wireless (LEAP)

http://www.businessinsider.com/bofa-how-to-invest-if-you-expect-obama-to-win-the-election-2012-8#managed-care-1

[mawilson 2,133]

Also gold since they'll keep printing more money.