“Must Buy” Penny Stock Picks: 1 For Obama, 1 For Romney

| November 6, 2012 | 0 Comments

Obama/RomneyFinally, the Presidential campaigning ends today.  Hooray!

I am so excited we’ll have the elections finalized tonight.  And I’m sure you’ll agree with me, I’ve had more than my fair share of negative campaign ads to last me a lifetime.

The good news is, once the last of the polls close tonight, investors will finally have the clarity needed to step back into the market… one way or the other.

It seems for the past month the stock market hasn’t done all that much to write home about.  Sure, weak earnings this quarter didn’t help matters.  However, the political uncertainty has taken stocks on a lower trajectory- since the race has been “too close to call”.

Now, I have friends who swear Obama “can’t lose”… and tell me “in the electoral college, Obama wins by a landslide.”

Right or wrong, somehow I don’t think we can be that certain…

If everything were done using surveys and polls- or decided on paper, why would we even vote?  I like to compare it to sports… On “any given Sunday”, any team can beat the other.  And that’s a 100% undeniable fact!

No matter who wins the Presidency, there will be clear winners and losers in the stock market. 

In fact, the complete list of companies set to benefit from either candidate’s victory is far too long to discuss here.  But no worries, I have two different penny stocks that should get a nice pop if either Obama or Romney wins the election.

Whittling the list down to one sector gives us very clear choices.  And the sector the candidates are most diametrically opposed on is by far energy.

It is no secret that President Obama and Governor Romney stand 180 degrees apart when it comes to energy policies.

For example, Governor Romney would cut subsidies for the fledgling alternative energy industry.  He cites, and with good reason, the Solyndra scandal in which $535 million in government backed loans went to waste as the solar panel maker went bankrupt.

And on the opposite side of the coin, Governor Romney plans to push more “clean coal” into use in the US.  I just loved hearing the Republican challenger say, “I like coal” to President Obama in their first debate.

Do we need to ask who donated to your campaign?

It’s pretty clear that if Governor Romney wins the Presidency, you can be sure of the following two things – coal stocks will rally, while solar stocks will simply get crushed!

On the flip side, if President Obama remains in office, we can be sure of the following… solar stocks will soar as their champion will get a second term.

Keep in mind what actually happens in the future, isn’t the point.  Solar subsidies may end up getting cut even under President Obama.  We all know the absolute need to cut government spending looms large in the not-too-distant future.  So it does remain a possibility.

The bottom line…

These are short-term post Presidential trades, with room for lots of upside from both stocks. 

If Romney wins, I suggest you pick up some shares of the severely beaten-down coal company James River Coal Company (JRCC).  You see, as natural gas hit multi-decade lows, utilities companies were lining up to convert from coal-fired power to natural gas.

In the process, coal took a beating.

The clear support of coal from Romney will cause a rally in virtually every coal stock out there.  The entire coal industry will get a bounce in the case of a Republican win.

For an Obama win, I’m picking an equally beaten down solar penny stock.  In this case, you should pick up shares of JinkoSolar (JKS). 

If you’ll recall, the entire solar industry has been under pressure for a long time.  But things culminated earlier this year when the Department of Energy slapped a massive tariff (variable rate) on solar panel makers believed to be “dumping” product at a loss into the US market.

The motive behind the tax was to help US-based companies compete with dirt-cheap import pricing.  But as you might suspect, this backfired and shares of all solar companies tanked even further… not just those charged as “guilty”.

What’s different about JKS is their global business model.  They have contracts all over the globe, not just in the US.  In addition, the company was just tapped for new power projects in Europe and China.

But again, we’re looking for the “pop” from the election outcome… that’s why I picked these two companies.  They’re small cap penny stocks that can really explode higher on good news. 

Remember, there is a long list of stocks you can choose from to profit from a post-election boom.  But the energy sector looks likely to produce some of the bigger winners directly related to the election itself.

As always… do your own homework before buying any stock.

Until next time,

Brian Walker

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Category: Breaking News, Penny Stock Tips

About the Author ()

Brian joins the Penny Stock Research team as a seasoned independent trader and financial analyst. Brian graduated with a B.S. from the University of North Florida and now resides in Scottsdale, Arizona. With a background in economics and statistics, he has a keen ability to uncover profitable and growth-focused companies. He has years of real life know-how in analyzing fundamental and technical data that gives him an edge drilling down on companies and financial results. With over 15 years trading experience, Brian has become an expert in the ever-changing equities markets. Today, he scours the markets hunting for penny stocks that offer low risk and high reward.