Which Industries Saw Their Fortunes Rise After The Election?


Image by: M Glasgow
By Steven Morrison II

The grueling presidential election is behind us. Can I get an “amen,” please? President Obama won, despite what many right-leaning pollsters and pundits were saying about momentum, which served to shell-shock many in the GOP. But they wouldn’t have been so flabbergasted had they paid attention to the time-tested polling data which said Obama would win.

It is a fact – the numbers don’t lie, ladies and gentlemen. Just like in the stock market, where the numbers also tell a a true story about moods, feelings and thoughts of the general public. Forget crystal balls – I’ll take a ticker any day to get the pulse of the country.

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As expected, the stock market took a dive on the day following Obama’s re-election. Market watchers knew it was coming – after his historic victory in 2008, the market dropped by 5%, the largest ever such post-election plunge. Note: this trend is seen as reactionary as the markets usually perform better while a Democrat sits in the Oval Office, so keep that in mind for next time.

But specific industries bucked that post-election trend, thanks to their direct ties to policy and politics. Whoever controls the White House effects which way the wind will blow on Wall Street, especially when it comes to companies and market sectors that are directly tied to decisions the president will make or is expected to make.

So now that that we’ve strapped ourselves in for four more years, what industries – and more specifically, what companies – immediately saw their fortunes rise as a result of the election outcome?

Gun Makers

Certainly, President Obama’s victory in 2008 propelled gun manufacturers to new sales heights amid fears that a Democratic administration would usher in a new era of stricter gun laws. That never happened – technically, they were loosened – but gun makers still sold firearms and ammunition as if a zombie apocalypse was right around the corner.

So, how did gun manufacturers do this time out? Shares of two of the largest makers of weapons – Sturm, Ruger & Co. (RGR) and Smith & Wesson (SWHC) – soared, gaining 11% and 12% respectively in the days immediately following Obama’s victory.

Still don’t think guns are political? Investor Place points out that during the George W. Bush years, the value of Smith & Wesson fell 93%.

Hospitals

Hospitals rejoiced after Obama’s stunning win. Why? Because the Democrats are trying to fix a broken system which sends poor people – or those who simply don’t have health care coverage – to the emergency room. Guess who picks up that tab? The hospital, of course, which passes it on to those who do pay for their care. And the hospitals don’t like that very much.

Tenet Healthcare Corp. (THC), Vanguard Health Systems (VHS) and HCA Holdings Inc. (HCA) all saw significant gains immediately following the election.

Health Insurers Focused On Medicare Patients

In general, health insurance stocks are down as the grim reality is now settling in: Medicare reimbursement amounts will be reduced as part of the Affordable Care Act. There was one bright spot reported by multiple media outlets, however: Medicare patient insurer Centene Corp. (CNC). Or should I say was a bright spot. After climbing rapidly on the Wednesday following the election, CNC shares have been on a roller coaster since, edging ever downward back toward reality.