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The upcoming presidential elections have certainly thrown a wrench into several markets. With the two most disliked candidates in history battling it out to become Commander in Chief, it’s difficult to determine who will be worse for investors’ portfolios. That being said, there are still some stocks to buy that are poised to weather the 2016 election unscathed and could even deliver considerable gains regardless of who takes office.
Sure, Hillary Clinton’s rhetoric appears to spell trouble for the biotech space and the uncertainty that comes with Donald Trump will send investors fleeing, but there are some companies that stand to benefit no matter who takes office on Nov. 8.
For that reason, Parker-Hannifin Corp (NYSE:PH), Raytheon Company (NYSE:RTN) and Gilead Sciences, Inc. (NASDAQ:GILD) are all stocks to buy before the election. These three stocks are unlikely to see any negative effects no matter who takes office, and both candidates’ polices are likely to boost sales in the coming four years.
Here’s what you need to know about each of these stocks.
Stocks to Buy Before Nov. 8: Raytheon Company (RTN)
One thing that investors can count on whether Hillary or Donald becomes Commander in Chief is that the government will keep spending on defense. The United States has the largest defense budget in the world, making companies like RTN a good bet.
The majority of Raytheon’s sales come from government contracts, but the company also has a diversified business with private sector contracts as well.
Not only that, but RTN has an up-and-coming cybersecurity business that accounts for only a fraction of the firm’s revenue but saw year-over-year sales skyrocket from $57 million to $138 million in the second quarter. This should be a huge green-light for potential Raytheon investors as it gives them exposure to the ever growing cybersecurity industry, while also capitalizing on America’s defense spending … an area where the incoming president is unlikely to make any significant cuts.
For that reason, RTN is one of the best stocks to buy regardless of the outcome on Nov. 8.
Stocks to Buy Before Nov. 8: Parker-Hannifin Corp (PH)
PH is another stock investors should consider if they are looking to protect themselves for the upcoming election. Both Trump and Clinton have promised voters that they will spend on improving America’s infrastructure, so that means that stocks in the engineering space, such as Parker-Hannifin, will have a leg up no matter who makes it to the White House.
There are a lot of good plays in this space, but PH is a strong pick because of its solid business model. Parker-Hannifin makes a wide range of machinery parts, so the company benefits from an uptick in infrastructure spending, and routine machine breakdowns means that PH has a continuous revenue stream regardless of what is going on in the U.S.
Not only that, but management at Parker-Hannifin has shown that it is committed to cutting costs and improving margins, so the coming year could see improved revenue. PH also pays a 2% dividend yield, making the deal even sweeter.
Stocks to Buy Before Nov. 8: Gilead Sciences, Inc. (GILD)
Gilead may seem like a silly bet, especially with Hillary Clinton favored to win the election; however, GILD has been unfairly punished as investors fled the biotech sector amid worries that Clinton will clamp down on the industry’s “price gouging” behaviors.
Earlier this year, Hillary tweeted her frustration with the sector, saying that she had plans to tighten regulations. This led investors to dump biotech stocks, Gilead included, for fear that the increased scrutiny in Washington would weigh on the industry’s profitability.
While Clinton’s crusade against unfair drug pricing isn’t unfounded, it’s unlikely that her wrath will be directed at companies like GILD. Instead, new regulations will probably hurt companies like Turing Pharmaceuticals that buy drugs and raise the prices purely for profit.
Other biotechs use the revenue from their drugs on the market to fund research and development — something that is difficult to attack as it is responsible for the advancement of modern medicine. Hillary may have promised to abolish over-priced drugs, but she will have to recognize that not all pharmaceutical firms are created equally when she addresses the matter.
Furthermore, even if she did decide to crack down on every drug company in the industry, the time it takes to draw up and enact that kind of legislation will give investors and drug companies plenty of time to prepare, making GILD one of the best stocks to buy ahead of the election.
As of this writing, Laura Hoy did not hold a position in any of the aforementioned securities.