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Donald Trump Inauguration: Stocks To Buy, Sell For The Next Four Years

Donald Trump ()

Donald Trump ()

Donald Trump has been sworn in as the 45th president of the United States. The President-elect, who pledged to “Make America great again,” promised plenty of things he would do regarding his first day in office. From repealing and replacing Obamacare to renegotiating NAFTA and beginning the construction of the wall on the Mexican border.

We won’t know for certain which of Trump’s policies will take priority or how they will be enforced. But what we do know is that for Trump to make good on his promises to bring back jobs, grow GDP and strengthen industry, he needs businesses to lead, innovate and hire workers. For that to happen, businesses leaders need to know their government is on their side. To that end, here are some names to own for the next four years (at least) as Trump’s policies take shape.

Lower Corporate Taxes

Trump’s promise to lower corporate taxes can have a boosting effect on the tech sector, which has an estimated $1.4 trillion stashed in overseas tax havens. These include some America's largest corporations such as Apple (AAPL) and Microsoft (MSFT), which could face a huge tax hit if they bring that cash home. Not only has Trump promised to lower the business tax rate from 35% to 15%, he pledged to eliminate the corporate alternative minimum tax.

Beyond lowering the tax rate, it would hardly shock anyone if Trump — given his pro-business stance — were to enact a tax holiday at some point during his presidency. Companies like Cisco (CSCO), Facebook (FB) and Alphabet (GOOGL) would thrive. They would no longer need to borrow cheap cash to fund their operations. Likewise, a better capitalized Tesla (TSLA) can accelerate the building of its Gigafactory, helping it achieve not only higher profit margins, but also higher vehicle production. In the process, Tesla would ignite the state of Nevada as an innovative hub, while mass-producing producing emission-free vehicles at affordable prices.

“Repeal and Replace”

The Affordable Care Act, a.k.a Obamacare was designed to — among other things — “insure the un-insurable.” Notably, to provide insurance coverage to people with pre-existing conditions who were blocked under the then-existing rules. Depending on what side of the aisle you’re on, Obamacare either did its job or was a “complete disaster,” according to Trump. Still, whether Obamacare is entirely dismantled or parts of it is kept, you don’t have to look too far beyond UnitedHealth (UNH) to find a stock can will thrive.

UnitedHealth has worked aggressively to exit the Affordable Care exchanges, which reduces its exposure to any changes Trump might make. What’s more, added from being the nation's largest health insurer, UnitedHealth owns Optum, which provides pharmacy benefit management services. Last week, not only did the company beat top- and bottom-line estimates, UnitedHealth raised its fiscal 2017 financial outlook, suggesting it is ready for whatever Trump decides to do.

Not every company will be as lucky. Conversely, companies such HCA Holdings (HCA) and Universal Health Services (UHS) that prospered under Obamacare may suffer. As will government health care providers such as Centene Corporation (CNC) and Molina Healthcare, Inc. (MOH).

Scale Back Dodd-Frank

Cutting down strict regulations imposed on financial institutions has been another policy Trump has proposed. After all, how can he achieve economic growth and strengthen small business if banks aren't lending money — something banks collectively struggled to do under Dodd-Frank. But as evidenced by the strong earnings results released so far from the likes of Bank of America (BAC), JPMorgan Chase (JPM), Citigroup (C) and Goldman Sachs (GS), financials are once again the sector to bank on.

Written to strengthen consumer protection and create tougher rules on excessive risk-taking, the 2010 Dodd-Frank Act has been cited by bank executives as a prohibiter of growth. "There's many aspects of it that we've got to kill," said Steven Mnuchin, Trump's pick for Treasury secretary. Mnuchin former partner at Goldman Sachs, called Dodd-Frank "the number one priority on the regulatory side.”

To that end, I would be surprised if Trump doesn’t take to “repeal and replace” Dodd-Frank in his first 100 days in office. Combined with the prospect of higher interest rates, lower taxes it’s tough to ignore the potential upside a bank like Morgan Stanley (MS) can provide. It’s not just the big banks that will prosper, however. Keep an eye on super regionals like Comerica (CMA), US Bancorp (USB) and PNC Financial (PNC), which Trump has made great again.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Richard Saintvilus

After having spent 20 years in the IT industry serving in various roles from system administration to network engineer, Richard Saintvilus became a finance writer, covering the investor's view on the premise that everyone deserves a level playing field. His background as an engineer with strong analytical skills helps him provide actionable insights to investors. Saintvilus is a Warren Buffett disciple who bases his investment decisions on the quality of a company's management, its growth prospects, return on equity and other metrics, including price-to-earnings ratios. He employs conservative strategies to increase capital, while keeping a watchful eye on macro-economic events to mitigate downside risk. Saintvilus' work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets. You can follow him on Twitter at @Richard_STv.

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