By: Tom Gentile
on May 1st, 2021
Political changes can create financial opportunities. The Democratic party’s control of the executive and legislative branches has done just that in key sectors, namely Green Energy and Healthcare. In fact, when it became clear that the Senate was going to be under majority Democratic control, those two sectors skyrocketed.
Green energy includes everything from electric power and batteries to solar panels and wind turbines.
Here are a few energy companies whose stock prices gapped up when Democratic control became imminent.
iShares Global Clean Energy ETF (NASD: ICLN)
ICLN’s portfolio is comprised of clean energy companies involved in biofuels, ethanol, geothermal, hydroelectric, solar and wind industries. Some of the companies in its portfolio are Plug Power (NASD: PLUG), Enphase Energy (NASD: ENPH), Meridian Energy (NYSE: MEL) and First Solar (NASD: FSLR).
This chart demonstrates how ICLN stock sharply increased when the Georgia Senate election results came in.
The EFT fund is managed by iShares. Here are a few of the companies iShares may consider adding to the fund. You may also want to research these companies on your own. Trading the EFT long is a good way to approach this opportunity.
Plug Power (NASD: PLUG)
Plug Power Inc. is an American company engaged in the development of hydrogen fuel cell systems that replace conventional batteries in equipment and electric vehicles. It has been ICLN’s top performer.
Enphase Energy (NASD: ENPH)
Enphase designs and manufactures software-driven home energy solutions that include solar generation, home energy storage and web-based monitoring and control. After the 2020 election news, Enphase reached an all-time high of $222.43. The price has fallen a bit, as of April 14, 2021.
It is currently consolidating at $200 support and poised for more upside.
Healthcare is the other industry thriving under Democratic control. While healthcare sector stocks have not increased as significantly as those in clean energy, impressive growth does exist.
Health Care Select Sector SPDR ETF (NYSE: XLV)
The XLV ETF provides exposure to companies in pharmaceuticals, health care equipment and supplies, health care providers and services, biotechnology, life science tools and services and healthcare technology industries. The election results spurred this fund to an all-time high of $118.13.
Two health care stocks are particularly well-positioned in 2021.
Centene (NYSE: CNC)
CNC provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured, uninsured and low-income individuals. It operates in Managed Care and Specialty Services. CNC is well-positioned to capitalize on any healthcare changes implemented by the Biden administration.
AmeriSource Bergen (NYSE: ABC)
ABC is one of the world’s largest pharmaceutical service companies. It serves the United States, Canada and select global markets. It focusses on the pharmaceutical supply channel and specializes in drug distribution services. The release of Covid-19 vaccines has brought drug distribution to the forefront.
ABC ran up to $112.48 with big volume upon the election news. As of April 14, 2021, it has reached $116. This stock is expected to continue its climb.
The above stocks represent profit opportunities.
Option traders consider buying 3-to-6-month call options to reduce risk and magnify returns.