A comprehensive stock-buying election playbook: Here are the dozens of stocks to buy across 7 market sectors in each of the 3 most likely outcomes, according to Raymond James

  • Uncertainty still surrounds the outcome of the election and its implications for markets.
  • To cut through some of the uncertainty, Raymond James lays out which stocks will benefit in each of the three most likely scenarios.
  • Visit Business Insider's homepage for more stories.

A week from election day, the polls seem to indicate that the most likely outcome will be a Joe Biden win and a Democrat-controlled House and Senate — a blue sweep.

But those are the polls, and they can shift drastically in a matter of days and contain the oft-forgotten margin of error (see: 2016).

So while many on Wall Street are expecting a certain election result, there is still a healthy level of uncertainty around how things will actually play out next week. 

To help investors position their portfolios once the results are known, Raymond James has released a list of stocks across seven market sectors that would be set to benefit in one of what they deem the three most likely scenarios: a Democratic sweep, a Biden win with a split Congress, or a Trump win with a split Congress.

Travis McCourt, an institutional equity strategist at Raymond James, said in the report that two of the three outcomes would be the most favorable to markets.

"The 'Best-Positioned' stock lists our analysts compiled tell an interesting story. The relative performance of the lists in aggregate was significantly positive for both the "Democratic Sweep" and "Status Quo" election outcomes," McCourt said.

He continued: "We believe this is because, in our opinion, the driving factor in the market has been investors' belief that: 1) The first fiscal stimulus was more supportive than expected 2) Under both a Democratic Sweep and a Status Quo election, we are likely to get material fiscal stimulus, though the timing and size may differ obviously, with a Democratic Sweep likely yielding more stimulus in early 2021, while a Status Quo election likely yields less stimulus, but sooner."

Broken down by sector, below are their expectations under each scenario and a handful of stocks they expect to benefit.

Consumer 

Scenario 1: Democratic Sweep (Biden wins, House and Senate controlled by Democrats)

Comment: "Higher corporate taxes and higher minimum wage provide cost headwind, but fiscal support fuels a spending recovery."

Stocks to buy: Aaron's (AAN), Rent-A-Center(RCII), Target (TGT) Dollar General (DG), NIKE (NKE)

 

Scenario 2: Biden wins, split Congress 

Comment: "Meaningful tax/wage legislation less likely as is additional fiscal support. Slow recovery, lower interest rates."

Stocks to buy: Aaron's (AAN), Rent-A-Center(RCII), Purple Innovation(PRPL), Tractor Supply(TSCO), Home Depot(HD), Texas Roadhouse(TXRH)

 

Scenario 3: Trump wins, split Congress

Comment: "Contentious relationship with China affects companies that source from China."

Stocks to buy: Purple Innovation(PRPL), Tempur Sealy(TPX), RH(RH), Walmart(WMT), PetIQ(PETQ), American Eagle Outfitters (AEO)

Energy

Scenario 1: Democratic Sweep

Comment: "Disruptive legislation change such as elimination of drilling incentives or drilling ban on federal acreage."

Stocks to buy: Schlumberger(SLB), Helix Energy Solutions(HLX), Valero Energy(VLO), Sunnova Energy(NOVA), SunPower(SPWR)

 

Scenario 2: Biden wins, split Congress

Comment: "A Republican Senate would either block outright or greatly water down any Biden-backed energy legislation."

Stock picks: Cactus(WHD), Newpark Resources(NR), Enterprise Products(EPD), Phillips 66(PSX), Pioneer Natural Resources(PXD), 

 

Scenario 3: Trump wins, split Congress

Comment: "Trump's fossil fuel friendly agenda would be solidified at the federal level."

Stock picks: Halliburton(HAL), Crestwood Equity(CEQP), Delek(DK), Energy Transfer(ET), TC Energy(TRP)

Financials

Scenario 1: Democratic Sweep

Comment: "Financial transaction tax, changes to PE tax structure, investment taxes, and individual tax changes will all have an impact. Accommodative Federal Reserve and fiscal support should insulate the impact."

Stock picks: Bank of N.T. Butterfield & Son(NTB), Meta Financial Group(CASH), MSCI(MSCI), Aflac(AFL), Willis Towers Watson(WLTW)

 

Scenario 2: Biden wins, split Congress

Comment: "Democratic regulators could advance regulatory changes which could contribute to Congressional gridlock."

Stock Picks: Seacoast Banking Corp. of Florida(SBCF), Prosperity Bancshares(PB), Kemper(KMPR), Progressive(PGR), Old Republic(ORI)

 

Scenario 3: Trump wins, split Congress

Comment: "Trump's deregulatory agenda would be solidified, but a change at the top of the Federal Reserve in 2022 could create market volatility."

Stock Picks: Axos Financial(AX), Wintrust Financial(WTFC), TCF Financial(TCF), Charles Schwab(SCHW), FBL Financial Group(FFG)

Healthcare

Scenario 1: Democratic Sweep

Comment: "Depends on the elimination of the Senate filibuster. If that happens, expanded healthcare coverage to uninsured and a public option are in the cards."

Stock picks: Blueprint Medicines(BPMC), Chemocentryx(CCXI), Insulet(PODD), Amedisys(AMED), UnitedHealth Group(UNH)

 

Scenario 2: Biden wins, split Congress

Comment: "Unlikely to have many healthcare legislative changes."

Stock picks: Amgen(AMGN), Perrigo(PRGO), Hologic(HOLX), Apellis Pharmaceuticals(APLS), Mirum Pharmaceuticals(MIRM)

 

Scenario 3: Trump wins, split Congress

Comment: "Regulatory targeting of hospitals, ACA plans, and pharmaceuticals would continue."

Stock picks: ANI Pharmaceuticals(ANIP), Lannett(LCI), Amneal Pharmaceuticals(AMRX), Omega Healthcare Investors(OHI), CareDx(CDNA)

Industrials

Scenario 1: Democratic Sweep

Comment: "Relationship with China would become less contentious while infrastructure spending and fiscal support are likely, partially offset by higher taxes."

Stock picks: Delta Air Lines(DAL), Eagle Materials(EXP), iRobot(IRBT), Cummins(CMI), United Parcel Service(UPS)

 

Scenario 2: Biden wins, split Congress

Comment: "Expect increased regulation, but less likelihood of fiscal stimulus or infrastructure bill, but higher taxes also less likely."

Stock picks: Delta Airlines (DAL), iRobot(IRBT), Union Pacific(UNP), J.B. Hunt Transport Services(JBHT),  Forward Air(FWRD) 

 

Scenario 3: Trump wins, split Congress

Comment: "Relationship with China is the big issue. No negative tax or regulatory changes, and at least some potential of fiscal/infrastructure related stimulus in 2021."

Stock picks: Allegiant Travel(ALGT), Alaska Air Group(ALK), Allison Transmission(ALSN), Oshkosh(OSK), Union Pacific(UNP), 

 

Real Estate/High Yield

Scenario 1: Democratic Sweep

Comment: "Likely higher dividend tax rate for the top tax bracket, higher corporate taxes, but with very significant fiscal stimulus/infrastructure spending, and likely less state/local taxes."

Stock picks: UNITI Group(UNIT), SBA Communications(SBAC), Hilton Worldwide(HLT), New Residential Investment(NRZ), Extra Space Storage(EXR)

 

Scenario 2: Biden wins, split Congress

Comment: "Likely a more modest fiscal support outlook, and likely no change to the current tax structure."

Stock picks: UNITI Group(UNIT), SBA Communications(SBAC), Two Harbors(TWO), Phillips 66(PSX), Enterprise Products Partners(EPD)

 

Scenario 3: Trump wins, split Congress

Comment: "Unlikely to be any changes to tax rates, though the lack of state/local government support could cause higher property taxes, impacting real estate investments modestly."

Stock picks: Switch(SWCH), Equinix(EQIX), SBA Communications(SBAC), Ares Capital(ARCC), TC Energy(TRP)

 

Technology, Media, and Telecommunications

Scenario 1: Democratic Sweep

Comment: "Increased risk of antitrust legislation and telecom regulation, potentially spreading to internet companies. Less contentious relationship with China."

Stock picks: RingCentral (RNG), Flex (FLEX), PayPal (PYPL), GoDaddy (GDDY), Verizon (VZ)

 

Scenario 2: Biden wins, split Congress

Comment: "Less risk of antitrust legislation, but telecom and Internet regulation is still possible."

Stock picks: Veeva Systems (VEEV), Sonos (SONO), ServiceNow (NOW), GoDaddy (GDDY), Verizon (VZ)

 

Scenario 3: Trump wins, split Congress

Comment: "Continued light regulatory touch, but relationship with China remains an issue."

Stock picks: Salesforce.com (CRM), CDW (CDW), PayPal (PYPL), GoDaddy (GDDY), Verizon (VZ)

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