Teeka Tiwari

5 Stocks to Own if Obama Wins

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FOCUS ON WHAT WE CAN CONTROL

Come November, one thing that we have the privilege and duty to do is voting for our next president. And as we see every four years, there is a lot of chatter about what each candidate's election would mean for the investment community.

I recently 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 healthcare 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.

WHO STANDS TO BENEFIT FROM AN OBAMA PRESIDENCY?

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) 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 (12.5%) 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), 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) 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 catapult this one into the stratosphere.

Another player in the alternative energy space that has been flying under-the-radar is LDK Solar (LDK). 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) could also be a big beneficiary of expanded alternative energy spending. It's going to take a lot of GE wind turbines and a massive infrastructure build-out to make wind power 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 broader-based earnings growth will come from should Barack Obama win the presidency. This isn't a partisan thing; it's a business observation thing.

Teeka Tiwari is the Chief Investment Officer for Tycoon Publishing's Point & Profit. To learn more about him, read his bio here.

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