On Jan 11, Barack Obama delivered his farewell speech at the end of what has been a landmark presidency. The outgoing President leaves the U.S. “a better, stronger place” than what it was before he assumed office. In his address, Obama listed the economic recovery after 2009’s Great Recession as one of the key achievements of his tenure.
While Obama has had a broad ranging impact on the economy as a whole, specific sectors have benefited more due to signature policy measures. For instance, Obamacare has had a deep impact on the healthcare sector. Other industries which have been significant benefited by his presidency include energy, utility and automobiles. Adding stocks from these sectors to your portfolios makes for a profitable choice.
Unprecedented Economic Recovery
When Obama assumed office, the Great Recession was deepening and the economic outlook for the U.S. was particularly bleak. The most grievous economic crisis in nearly 80 years was accompanied by widespread job losses. The extent of the recovery affected from that point can be gauged from the health of the labor market. The U.S. has now experienced 75 consecutive months of job growth, the longest such stretch in 78 years.
Wage gains have also accrued to the economic workforce and have increased at their fastest pace since the recovery began in 2016. Meanwhile, the very length of the economic recovery has assumed record proportions. Obama’s critics have pointed out that the recovery is one of weakest on record. However, such a view fails to take into account the severity of the last crisis. Employment gains made since then also more than make up for such criticism.
Sectors Benefiting from Obama’s Presidency
Additionally, the outgoing President has implemented several crucial policy measures. However, specific sectors, such as automobiles, have benefited more from his tenure than others. Firstly, Obama has provided several incentives for electric cars. Some of this was done by partially financing Tesla’s TSLA first production facility. Additionally, Obama provided financing to a Ford F facility producing fuel efficient cars and saved millions of jobs at General Motors GM and Chrysler FCAU.
Additionally, Obamacare has created a fundamentally better and more sustainable business model for the entire healthcare industry. The signature healthcare reform has created a results-based payment approach, improving the efficiency of the entire system. Obama’s administration has transformed the energy industry by providing incentives for wind and solar power. Such stimulus measures have improved the cost competitiveness of renewables enormously.
Obama’s legacy is a longstanding one and its impact is likely to extend beyond his tenure. Sectors like healthcare, automobiles and energy as likely to enjoy the benefits of his actions in the years to come.
Picking stock from these sectors is an extremely prudent option. However, picking winning stocks may be difficult.
This is where our VGM score comes in. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM score.
We have narrowed down our search to the following stocks based on a good Zacks Rank and VGM score.
Magellan Health, Inc. (MGLN - Free Report) is the country's leading behavioral managed care organization.
Magellan Health has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. The company has expected earnings growth of 36.4% for the current year. The stock has returned 42.6% over the last three months, outperforming the Zacks Medical - HMOs Market sector, which has gained 16.3% over the same period.
WellCare Health Plans, Inc. (WCG - Free Report) provides managed care services targeted exclusively to government-sponsored healthcare programs, focusing on Medicaid and Medicare.
WellCare Health Plans has a Zacks Rank #1 and a VGM Score of A. The company has expected earnings growth of 15.5% for the current year. Its earnings estimate for the current year has improved by 0.4% over the last 30 days. The stock has returned 20.5% over the last three months, outperforming the Zacks Medical - HMOs Market sector, which has gained 16.3% over the same period.
Aemetis, Inc. is an advanced fuels and renewable chemicals company.
Aemetis has a VGM Score of B. The company has expected earnings growth of 20.9% for the current year. The stock has returned 17.2% over the last three months, outperforming the Zacks Biofuels Market sector, which has gained 3.6% over the same period. The stock has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NextEra Energy Partners, LP (NEP - Free Report) engages in owning, operating and acquiring contracted clean energy projects.
NextEra Energy Partners has gained 1.8% over the last three months, underperforming the Zacks Alternative Energy - Other Market sector, which has gained 4.3% over the same period. However, it has a Zacks Rank #1 and a VGM Score of B. The company has expected earnings growth of 14.6% for the current year. Its earnings estimate for the current year has improved by 3.5% over the last 30 days. This provides a good opportunity to buy the stock which remains valued below its market potential at this point.
Oshkosh Corporation (OSK - Free Report) is a leading designer, manufacturer and marketer of a broad range of specialty access equipment, commercial, fire & emergency and military vehicles and vehicle bodies.
Oshkosh has a Zacks Rank #2 (Buy) and a VGM Score of A. The company has expected earnings growth of 5.9% for the current year. The stock has returned 26.1% over the last three months, outperforming the Zacks Automotive - Original Equipment Market sector, which has gained 10% over the same period.
Fox Factory Holding Corp (FOXF - Free Report) is engaged in the production, processing, and sale of steel and related products.
Fox Factory Holding has a Zacks Rank #2 and a VGM Score of B. The company has expected earnings growth of 11.4% for the current year. Its earnings estimate for the current year has improved by 0.2% over the last 30 days. The stock has returned 24.8% over the last three months, outperforming the Zacks Automotive - Domestic Market sector, which has gained 12.8% over the same period.
Zacks' Top 10 Stocks for 2017
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