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3 Post-Election Stocks to Buy Now

Monday and Tuesday were both up days in the market, yesterday the S&P 500 fell 2% in sharp selling to close at 1,394, just below key support around 1,400.

So what the heck happened?

In a phrase, we experienced the perfect storm of events.

First up, Mario Draghi, head of the European Central Bank (ECB), said that European economies are expected to remain weak in the near term, and that even stalwart Germany is now starting to feel the impact of the sluggish environment there. Then Germany announced that industrial production dropped 1.8% in September, much worse than an expected drop of 0.5%.

Adding to the unease over Europe, Greece's Parliament is getting ready to vote on budget legislation that would include controversial austerity measures required for the country to receive the next round of bailout money, which it needs to avoid defaulting on its debt.

The other factor at play had to do with investors contemplating "what's next" now that the election is behind us. Of course the glaring issue there is the fiscal cliff, which is now front and center again here in the U.S. More specifically, the concern is whether President Obama and Congress can come together on some kind of plan to address this issue head on.

I do expect President Obama and Congress to find a way to avoid a worse-case scenario. It may be a temporary solution to buy time for a more comprehensive plan in the New Year, but with the election now behind us, both parties want to put their best foot forward and strike a deal. It's interesting that the midterm elections two years from now and quite possibly the next presidential election in four years could be heavily influenced by what happens in the next few weeks. The stakes are that high.

Investors are considering is whether even a compromise solution could have an impact on economic growth next year. After three rounds of quantitative easing, we can't expect Federal Reserve stimulus to lift the market by itself; a healthy economy and growing earnings are needed to get the S&P 500 above its September high of 1,475.

The current earnings season is now practically complete, and the picture has been mixed. About 70% of companies have beaten earnings estimates, but earnings are down 0.5% from a year ago, and only about 40% of companies managed to top revenue expectations (and the numbers would look worse if you removed juggernaut Apple from the equation). The lackluster earnings season is the principle reason that the market has given us the pullback we expected since the QE3 inspired rally of September.

I'll be keeping a close eye on how things unfold in the coming weeks, and will be in touch on any necessary actions that you need to take. In the meantime, I'd like to share three exciting post-election stocks with you.

3 Post-Election Buys

The election is now behind us, and I'm sure many of you are wondering what sectors stand to benefit the most now that President Obama will be in office for another term. In a nutshell, the healthcare sector stands to be one of the biggest beneficiaries. Obama's win makes the road to broader insurance coverage inevitable, with the potential for over 30 million uninsured to be covered starting in 2014. More people covered by insurance will ultimately mean higher healthcare spending. I expect hospitals to be one of the biggest beneficiaries.

Today, I'd like to share with you three stocks in the healthcare space that I think will weather the volatility ahead--and run even higher as we close out the year.

  1. HCA Holdings (HCA) owns and operates hospitals, and the company should be able to grow through a number of varied paths, including additional hospitals and surgery centers, its revenue cycle management business (Parallon), and the acquisition of physician networks. HCA's volume growth has outpaced its competitors because it has positioned itself in attractive markets with strong growth characteristics.

  2. Another interesting company is DaVita HealthCare Partners (DVA), which provides dialysis services for patients suffering from chronic kidney failure. I expect much of the growth to come from its recent acquisition of independent physician association HealthCare Partners, a primary care medical group that offers a full spectrum of healthcare treatment and services.

  3. Vascular Solutions (VASC) is a little-known medical device company that is leading the fight against the #1 killer in America--heart disease. Even a global economic slowdown won't stop people from getting--and treating--heart disease. VASC has a strong history of developing products that meet unmet needs (such as next-generation catheters), and stands to benefit from the growth of the entire industry.

Comments (14)

Burt Sibley:

Hilary
Since so many people depend on income from their investments what do you recommend?

Paul Cahan:

Dear Hillary:
I appreciate your investment opinions.... I once made some nice profit on Lexmark many many years ago!
Now that I am older, and a bit wiser, I know that you can have all the money in the world but if you don't have your health, you don't have anything.
I think we need to all take stock now that the election is over, and think about a real game changer for this country. The fact is, money is important, but not everthing. Wouldn't it be nice if profits were DoWN at dialysis centers and DOWN at heart disease practices.... and profits were UP at hotels, travel companies, real estate, toy makers, and educational book publishers? We all need to think long run more, personally and politically. For all of us, we will all meet the end of the road someday and what will we leave behind? A search for the next quick buck, or a lasting help for humanity? Or both?
I urge people to think about doing Shareholder Proxies... or at least contacting the CEO's of companies that can DO something to help the growing chronic disease that you mention in your recommendations. Why doesn't Mcdonalds have Diabetes eduction poster at the start of the line, and recommendations for their salads and new tofu burgers NOT deep-fried but STEAMED! What a revolution! Could it even in the long run help their stock climb? Human nature is based on habit, and education, nurture and nature.
When you mention companies that are growing on disease, why not suggest other things people can do to help address these awful epidemics in our country that lead to more disability, lost tax revenue when people are ill. Please don't be so short sighted and sound so 'tunnel vision" on short term profit. A real game changer would be if leaders in all industries, YOU in finaancial, started throwing out ideas that are good for America, not just for a bank statement. Our country has lost it's soul. Let's get it back, but it will take everyone to do it who has an audience. I'm just an old guy who came of age in the 1960's, that rare moment when the country was not so divided and young people thought they could make a better world. We still can. Paul Cahan

Edward Gu:

So disappointed about Mitt's loss of the election for US President. Harsh reality is that there are many people who are into big governments and dependency on the government. So sad.

John P. McCarthy:


THANKS ! YOU HAVE BEEN A BIG HELP.

Mike Kowalski:

I'm with you, Ed. Looks like the the Land of the Free & the Home of the Brave is now the land of the freebies & the home of the entitled. I'm disappointed, but I'm not surprised.

Pat Ziegler:

It's so sad that republicans think that the only people who voted for Obama are on welfare. In fact, the exact opposite is true.

Most republicans have never seen their party raise taxes and pay for what they spend. Instead, they've seen decades of tax cuts and decades of new debt created from tax cuts and still they refuse to accept that THEY are the problem.

Tax cuts lead to debt and debt is future taxes plus interest. Therefore, the welfare they speak against is what their party gives them and yet, they blame the other side.

A few short years ago, the elderly and poor got checks from the government, but now everyone expects one. Even the largest corporations think they need a tax cut to survive. Imagine if all previous generations were as dumb as this one.

Douglas DeConnick:

Hilary, I really miss you on Nightly Business Review. When do you plan to return?

Kirk Gallaway:

Mr.Cahan, Thank You, I was very moved by your words. I've seldom seen such eloquence in such a forum. I like you, do remember a time when we, as a nation, had a broader perspective and our values were more intrinsic.

ed shroyer:

Hilary, I want to thank you for your FREE advice. I hope more people appreciate the advice as well.

I wonder if Mike and Ed can remember the Reagan days and how he raised ( yes I said) raised taxes 16 times during his terms to cover most of his spending sprees.
And I don't remember hearing if any one who has received an unemployment check was said what Party they belonged to. I think they were just glad to get help. But of course they are a part of the reason why America is a welfare state.

Paul Cahan:

THANK YOU MR. GALLOWAY!
I am encouraged that there are some people who can still see the big picture and are mature and compassionate and fair minded to see where this country needs to go.... thank you for reading my post and kindly commenting as you did.
Paul Cahan

Sonny C:

Hillary, are you married?

Scott Richards:

Rather than wringing my hands and whining about the outcome of the election, I choose to focus on where we need go with our party in the future. The Republican party has devolved from fiscal conservatism and social regard to a party focused only on enhancing the life style of the those of us that are white, fairly wealthy and aware of getting older. We are the party of self-interest. We are also the party of growing ignorance. And we are the party that will become progressively irrelevent unless we change our focus.

To refocus we must concentrate on rebuilding a strong middle class in this country. It is the middle class that serves as the underpinning of our society. It is the middle class that serves as the engine of consumption and growth. It is the middle class that spawns upward mobility. And it is the middle class that will reject the politics of self-interest that fail to include all Americans.

Never again do I want to hear a Republican candidate deride the 47%, who incidently are mostly retirees, extremely hard working lower wage earners and disabled vets. Only 11% look to the government for support, including working single Moms and other struggling workers. Many of this 47% are, and need to be, in the base of the Republican party.

So, where do we go from here. I suggest that we take a look at our pedantic stands. Do we need to be obstructionists by playing childish political gottchas? Do we have to look at taxation as one means to reduce our deficit or do we need to continue to pander to Norquist's tax pledge to gain PAC support? Do we understand, and more importantly represent, the needs of the people? Are we prepared to put a concern for the good of the country ahead of our concern for re-election? When we start answering these questions, we will be on our way to becoming a party of statesmen rather than political hacks.

sophia:

I hope I'm posting to correct person.

I want to thank fellow (P. Zeigler?) who "gets" that the country is changing. Embrace the change or become politically irrelevant. We are a diverse nation. It's not about big government - it's about giving everyone the chance to make this country the greatest in the world. Running a campaign on fear of the "other" was just plain dumb. Romney had some good ideas, but they were shrouded in mean-spirtness - like self-deport. Many of those people risked their lives, walked for weeks at night while hiding from men with guns. Tell me, isn't that the kind of spirit this country needs? I'll take these folks over your gated community types any day of the week.

Mr. Wilber:

Many in the gated communities studied hard for years and saved , learned the language, to come here legally, and now we want to criticize them and spit in their faces for being so stupid.
Only in America would you pass over a decent family man for a bastard from Kenya as your supreme leader and accept thieves who stole their way into your country over good honest people who earned their rights to be American.
This is a market blog not a leftist social blog.

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