Five Stocks That Will Benefit If Hillary Clinton Wins Presidential Election

With tens of millions of Americans expected to tune in for the Presidential debates, with the first beginning on Monday, the odds of one candidate prevailing over another come November 8 could dramatically change. A solid debate performance could ensure a healthy lead in a swing state that might clench the election for the Democrats or the Republicans.

In this article, we take a closer look at five stocks that analysts and some traders think will do well if Hillary Clinton wins the Presidency, Cree, Inc. (NASDAQ:CREE), First Solar, Inc. (NASDAQ:FSLR), Tesla Motors Inc (NASDAQ:TSLA), UnitedHealth Group Inc (NYSE:UNH), and Humana Inc (NYSE:HUM). In addition, we will assess the hedge fund sentiment towards the companies in question.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

#5 Cree, Inc. (NASDAQ:CREE)

– Number of Hedge Fund Holders (as of June 30): 11
– Total Value of Hedge Fund Holdings (as of June 30): $36.26 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 1.50%

If Clinton wins come November 8, renewable energy companies will likely enjoy continued support from the government in its effort to combat global warming and to preserve the environment. As one of the leading makers of energy-efficient LED bulbs, many investors believe Cree, Inc. (NASDAQ:CREE) will be among those companies to benefit, as Cree should enjoy strong LED bulb demand from government agencies and from consumers around the world. Despite that benefit, the smart money wasn’t a big fan of Cree in the second quarter, however. Of the around 749 top funds that we track, only 11 had a bullish position in Cree, Inc. (NASDAQ:CREE) at the end of the second quarter, down by six funds from the previous quarter.

#4 First Solar, Inc. (NASDAQ:FSLR)

– Number of Hedge Fund Holders (as of June 30): 30
– Total Value of Hedge Fund Holdings (as of June 30): $261.52 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 5.30%

If Democrats win the Presidency for another four years, the generous renewable energy tax credit, the ITC, which has been the cause of so much demand in the industry, could potentially be extended for even longer than its current expiration. In addition, stricter tariffs to protect domestic solar producers against Chinese solar companies that dump their products can’t be ruled out. As one of the leading U.S. solar producers, many analysts think First Solar, Inc. (NASDAQ:FSLR) would benefit in the long run from a more accommodating government. Although shares are down by 43% year-to-date, many smart money funds stuck around from March 31 to June 30. According to our data, 30 funds were long First Solar, Inc. (NASDAQ:FSLR) at the end of the second quarter, compared to 31 funds a quarter earlier.

#3 Tesla Motors Inc (NASDAQ:TSLA)

– Number of Hedge Fund Holders (as of June 30): 36
– Total Value of Hedge Fund Holdings (as of June 30): $1.13 billion
– Hedge Fund Holdings as Percent of Float (as of June 30): 4.00%

It’s no secret that many of Elon Musk’s companies are interconnected. It’s also no secret that many of Musk’s companies rely to a substantial degree on government contracts (as is the case with SpaceX) or subsidies (as is the case with SolarCity and Tesla) to do well. Given those characteristics, it would stand to reason that Elon Musk and Tesla Motors Inc (NASDAQ:TSLA) would do better under a Clinton Presidency than a Trump Presidency. Seeing as Clinton is a bigger fan of the environment and Elon Musk’s companies are to a large degree geared towards saving the environment, Tesla would likely grow faster under Clinton. At the end of June, there were 36 funds in our database that held shares of Tesla Motors Inc (NASDAQ:TSLA), down by three funds from the previous quarter.

#2 UnitedHealth Group Inc (NYSE:UNH)

– Number of Hedge Fund Holders (as of June 30): 55
– Total Value of Hedge Fund Holdings (as of June 30): $3.15 billion
– Hedge Fund Holdings as Percent of Float (as of June 30): 2.30%

Although Donald Trump has said that no one will die on the streets if he is President, most analysts still view Hillary as the more pro-healthcare candidate. Not only will more people likely be covered, but also more government money will likely be spent on healthcare overall. Given that view, many investors believe that diversified managed healthcare giant UnitedHealth Group Inc (NYSE:UNH) would do better under a Clinton Presidency than a Trump one. A total of 55 investors tracked by Insider Monkey had a bullish position in UnitedHealth Group Inc (NYSE:UNH) at the end of June, up by five funds from the previous quarter.

#1 Humana Inc (NYSE:HUM)

– Number of Hedge Fund Holders (as of June 30): 64
– Total Value of Hedge Fund Holdings (as of June 30): $5.82 billion
– Hedge Fund Holdings as Percent of Float (as of June 30): 21.70%

As was the case for UnitedHealth, Humana Inc (NYSE:HUM) will likely benefit if Hillary becomes President. Although the stock has been range-bound since the beginning of 2015, shares of Humana have done very well since Obama became President in 2009, and the same could occur if the Democrats remain in office. If more people and indications are covered, Humana should realize more in revenues and cash flow. In terms of hedge fund sentiment, the smart money has mostly kept its position in the insurer stable. There were 64 funds from our database long Humana Inc (NYSE:HUM) at the end of June, unchanged from the previous quarter.

Disclosure: none