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Obama Win/Romney Loss Priced Into Coal, Health and Gold Stocks

Election Day is over, and Wall Street is taking stock of the situation in more ways than one. “Obama” stocks such as healthcare management companies benefiting from the Affordable Care Act are up, and “Romney” stocks like coal companies are taking a spill.

Oh yeah … and the market in general is pretty darn grumpy.

Whether that’s Obama’s fault or the persistent risks in Europe or the ugly earnings season or any other number of factors, that’s anybody’s guess. But here’s a quick sector-by-sector look at how things are playing out at midday:

Romney Stocks Crashing

Coal: Just before noon, the biggest losers of the day included James River Coal Company (NASDAQ:JRCC), off about 24%, and we saw roughly double-digit drops for Arch Coal (NYSE:ACI), Alpha Natural Resources (NYSE:ANR) and Peabody Energy (NYSE:BTU). Unsurprisingly, a more “friendly” EPA under Romney might have helped the coal biz.

For-Profit Education: Big student loans and the aggressive tactics of for-profit education companies have been a target of the Obama administration in the past, including a failed effort to tie debt to actual job prospects after paying for a degree. With Obama back for four more years, that could signal a hostile environment for companies like Strayer (NASDAQ:STRA), Apollo Group (NASDAQ:APOL), DeVry (NYSE:DV) and others. All are off between 6% and 8% midday.

Health Insurers: Coverage for pre-existing conditions, smaller margins on treatment and other Obamacare regulations mean smaller profits ahead for Humana (NYSE:HUM), Aetna (NYSE:AET), UnitedHealth (NYSE:UNH) and WellPoint (NYSE:WLP), among others. All stocks are under pressure, with Humana off by double-digits midday and the others declining in the range of 3% to 5%.

Obama Stocks Surging

Healthcare Facilities: From HCA Holdings (NYSE:HCA) and Tenet Healthcare (NYSE:THC) to Health Management Associates (NYSE:HMA) and Community Health Systems (NYSE:CYH), facility operators have firmed up nicely. These stocks are all up more than 7% midday despite a marketwide selloff. Since Obamacare is here to stay, more insurance coverage means more customers … er, patients.

Precious Metals: Silver miner Coeur d’Alene Mines (NYSE:CDE) was up almost 6% midday on Wednesday, and midcap gold and diamond miner Harmony Gold (NYSE:HMY) was up over 5%. Megacap miners like Randgold Resources (NASDAQ:GOLD), Goldcorp (NYSE:GG) and Barrick Gold (NYSE:ABX) were flat … but considering the massive selloff, that counts for something. The permabears would say this is a sign the market thinks the U.S. will go bankrupt. More realistically, it’s an indicator that Obama’s central bank policies focusing on employment and all but ignoring inflation will continue. Precious metals like gold and silver are the ultimate hedge against inflation.

Guns: Just as in 2008, handgun makers Smith & Wesson (NASDAQ:SWHC) and Sturm, Ruger (NYSE:RGR) are rallying nicely — not because they benefit from any Obama policy, but because of fear that a liberal agenda could tighten gun laws … which could result in a short-term rush for sales before they are limited or banned in the U.S. under harsher restrictions.

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Jeff Reeves is the editor of and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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