Health care: An Obama win is key

For obvious reasons, the election outcome is going to have a big impact on health care stocks. That's because "Obamacare," or the Affordable Care Act, brings huge changes to health care, creating many obvious winners, including insurers and hospitals.

Hospitals gain because Obamacare would extend health insurance to tens of millions of people who are not currently covered. That would help hospitals a lot by lowering their bad-debt burden, points out Ron Sloan, the portfolio manager of the Invesco Charter Fund (CHTRX). Most health insurers would gain simply because they'd have a lot more customers, says Sloan. "The whole idea of the health care act is to push another 30 million to 40 million people through the system," he says.

Companies that stand to benefit include HCA (HCA), the nation's largest hospital operator, Tenet Healthcare (THC) and Coventry Health Care (CVH). Insurers that would benefit include Aetna (AET), Humana (HUM), UnitedHealth Group (UNH) and WellPoint (WLP).

Since Romney has vowed to roll back Obamacare, and the election race is so tight, the stocks of these companies haven't fully priced in the potential gains under Obama. "A Romney victory would be a negative for the group, because it adds uncertainty," says McLaughlin. "For the group, it would be, 'Oh no, here we go again.'"

Indeed, this explains why many of the stocks above fell after the first presidential debate, which seemed to go to Romney. "Should Mitt Romney take the White House and Republicans win the Senate, full Affordable Care Act repeal will almost certainly be on," says Thomas Carroll, a health care sector analyst with Stifel Nicolaus. Even if Romney fails to repeal all of Obamacare, he could block much of it, points out Wells Fargo analyst Gary Lieberman.

Look for these stocks to rally -- and continue to do well -- in an Obama victory.

Energy: Drill, baby, drill

If Romney wins, expect solid gains for energy companies, as well as the companies that help with drilling, exploration and pipelines, says Cetera Financial Group. Analysts cite three main reasons.

First, Romney would likely give states more power to regulate exploration and production on their own turf and on federal lands inside their borders, says Wells Fargo analyst Gordon Douthat. He'd also likely limit the power of the Environmental Protection Agency to restrict production. "I think there is going to be a big push under a Romney administration to open up access to other parts of the country," says John Derrick, the director of research for U.S. Global Investors.

This would directly benefit energy producers that are pure plays on U.S. production, he says. One Derrick likes is Gulfport Energy (GPOR), which operates mainly on the Louisiana Gulf Coast and in Texas, Colorado and eastern Ohio. Two other companies that fit this theme are Pioneer Natural Resources (PXD) and Continental Resources (CLR), which do all, or most, of their production in the U.S., says Baird Investment Management's McLaughlin.

Second, Romney would likely take steps to increase deep-water drilling off U.S. coasts, says McLaughlin. This would be good for Noble (NE) and Ensco (ESV), which provide offshore drilling services. It would also help Oceaneering International (OII), which provides remotely operated submersible vehicles and other services for offshore drilling.

Third, Romney would likely approve the Keystone XL pipeline, says Sloan, of the Invesco Charter Fund. The pipeline would transport unrefined crude from the Athabasca oil sands region in Alberta, Canada, to refineries in Illinois and along the Gulf Coast of Texas. Pipeline approval would benefit engineering and construction companies Chicago Bridge & Iron (CBI) and Shaw Group (SHAW).

The shares of coal companies like Arch Coal (ACI), Alpha Natural Resources (ANR), Consol Energy (CNX) and Peabody Energy (BTU) bounced up after last week's presidential debate because of positive comments from Romney. "I like coal. I'm going to make sure we can continue to burn clean coal," he said.

But it's not clear that a Romney win would really help these companies, since one of their biggest problems is the low price of natural gas, which has companies switching from coal. "Coal's real problem is natural gas prices," says Sloan, of the Invesco Charter Fund. Romney can't change that.

A Romney victory would be bad news for green energy companies like First Solar (FSLR), says Derrick, because Romney would roll back federal support for this sector.

Defense stocks: Big winners in a Romney victory

Military spending is another key area where the two candidates disagree sharply. Romney says he won't cut defense spending. He's touted a plan to devote 4% of gross domestic product to military spending, says Wells Fargo analyst Sam Pearlstein. In contrast, Obama is likely to cut military spending to hit deficit-reduction targets.

That makes classic defense plays -- such as Lockheed Martin (LMT), Northrop Grumman (NOC) and Raytheon (RTN) -- winners in a Romney victory.

Lockheed Martin is the world's largest defense contractor, with a broad range of products, including the F-35 fighter jet, the C-130 Hercules and the C-5 Galaxy aircraft, missiles and surveillance systems. Northrop Grumman makes drones, manned aircraft and intelligence and surveillance systems. Raytheon supplies radars, sensors, communication equipment and cybersecurity products.

Morningstar's Rick Tauber has a high rating -- four stars out of five -- on a lesser-known defense company called SAIC (SAI). It supplies products used in intelligence, surveillance, reconnaissance, cybersecurity and logistics. These are all high-priority and high-growth areas of defense. This suggests SAIC would do well if Romney wins but also hold up well in a second term for Obama.