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8 Stocks to Buy if McCain Wins

Wednesday, September 3, 2008 | Teeka Tiwari

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This week's article will be short and to the point. I’m at the Republican National Convention and so far there is not a whole lot to report on. To date Hurricane Gustav has had everybody focused on issues bigger than politics. However, as the Gulf Coast appears to have been spared the worst of Gustav’s wrath, the talk once again is returning to the political issues.

One of the big issues being bandied about this week centers around expanding domestic drilling for oil and natural gas. While many Americans support enlarging domestic oil and gas exploration, the Democrats have been more lukewarm to the idea.

If the Democrats win the election, I really don’t see the oil and gas industry taking a huge hit unless the windfall profit tax idea takes hold. (God help us all if it does.) However, if McCain wins it could be hugely positive for the oil and gas guys along with the nuclear sector players.

On a McCain win, oil service stocks like Cameron (CAM), Transocean (RIG), Diamond Offshore Drilling (DO) and Halliburton (HAL) will be huge, huge beneficiaries of more liberal domestic drilling rules. Nuclear stocks such as Cameco (CCJ) and nuclear ETF Market Vectors Nuclear Energy (NLR) could experience massive upside moves.

At some point, the stigma attached to the nuclear industry will fall away under the unrelenting pressure of high oil prices. A quick look at oil prices clearly shows that the commodity is undergoing a consolidation phase. These periods can last quite a long time, even a year or more.

We would be engaging in the worst form of wishful thinking however if we were to believe that the oil run was over. Moderating oil prices will continue to buoy stock prices, but that will only last until oil gets ready to run again. When it does, we could finally have the necessary impetus to get serious about nuclear energy as a viable solution to our domestic energy needs.

The idea of nuclear stocks and coal stocks being growth industries again will strike many investors as odd. But over the summer, we saw coal stocks acting like internet stocks of yesteryear, witnessing massive runs in once staid companies like James River Coal (JRCC) - up almost 150% over the last six months - and Alpha Natural Resources (ANR) - up almost the same amount.

The next major growth industry in this country is alternative energy. Sure solar and wind get all the press, but the biggest investment dollars will flow to the most proven industries. That my friends is nuclear and "clean" coal (clean coal still sounds like an oxymoron to me!).

We as a country may ultimately make the leap to a completely green and renewable domestic energy source, but I can assure you that it will not just magically occur. Nuclear energy along with coal will be among the many stepping stones we use to cross that great divide between where we are now and where we want to go.

It benefits our country greatly if we can keep our dollars busy at work in our economy. Buying 2/3 of our energy from overseas is resulting in a massive wealth transfer from our wallets to foreign countries. Every dollar we spend on foreign oil is one less dollar at work here at home. The diminishing wealth effect of shipping so many of our dollars overseas cannot be overstated. It's an economic imperative for us to staunch the flow of these American dollars into overseas coffers. If opening up domestic drilling could redirect at least a portion of that wealth back into America then it is a policy that requires our utmost attention.

What are your thoughts on domestic drilling? Is this a policy that the U.S. should pursue, if not why not? Post a comment by following the link below.


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“Let the Game Come to You.”

Teeka Tiwari
Chief Investment Officer
Point & Profit




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54 Comments

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  1. GARTH (16 weeks ago) Is this Spam?

    So McCain is just another Bush energy supporter.Pity that he doesn't go the way the Europeans are thinking about their next energy sourcing.The greatest source for power and energy everyone knows comes from the sun and will remain so this century and into the next millenia.Oil and all their derivatives will be just cinders on a dry and desolate landscape.

  2. Susan (16 weeks ago) Is this Spam?

    I am a heart-felt Democrat. This article makes the divide in this country clear. I don't know if McCann supporters or Obama supporters can delinate/hear the economic distinctions you present primarily because for many emotions, economic aspirations and the needs of one's soul drives one's political ideology.

    Never-the-less your analysis ,of the donkey and the elephant was awesome.

    I will buy some of the stocks you mentioned.By pointing out the stepping stones to cross the divide between where we are now and where we want to go it is clear that the power brokers in this country don't want change ,they don't even want a donkey on the track,and as I cynically ponder the question, how much oil the tankers all over the world use on any given day my chest consticts .

    I must admit that I have a Democrat's heart with a desire to have a"true" Haliburton wallet and the tension created by those two desires will make think of you Election night .

    Susan

  3. N/A (16 weeks ago) Is this Spam?

    Considering all the hysteria the radical environmentalists stir up, what is their real agenda?



    When we hear "Big Oil" bashed, do any of these idiots understand that governments control 80% of oil production?



    No doubt if we have highly restricted drilling we will only have a "blip", but if we have free market development we can become exporters. It is foolish to think that this would not be of tremendous economic benefit to us, from retaining wealth and jobs to denying it to all the governments who actively oppose us.



    The best approach would be to exploit domestic oil resources and nuclear for the near future while at the same time working on viable alternatives for down the road.

  4. Joe (17 weeks ago) Is this Spam?

    It seems electric vehicles have been held up on the presumption that if that can't go 300 miles on a charge, there not competitive. Logically, we could get by just fine with electric vehicles with the range of the average commute (~75 mile range) If anyone ever figures it out and realizes how much money is to be made from commute capable electric cars which can be produced today for less than a hybrid, that is where all the investment money will go.

  5. byron (17 weeks ago) Is this Spam?

    the libs say it will take 10 years if we drill now to see any result. what a negative stupid party. b.o. has received $millions from the arabs on his webb site. to bolster his campaign. Drill NOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  6. Jeff (17 weeks ago) Is this Spam?

    My question is, how will drilling offshore in America in any way help us? It is not like we can keep the oil for ourselves. It will go into the world market and will be like a drop in the bucket. The only thing that the offshore oil drilling buzz does is give Congress another excuse to give huge amounts of our tax money to the Oil companies!

  7. Michael (18 weeks ago) Is this Spam?

    I have been a proponent of drilling in the US, and off shore waters for some time. Consider that this country could be energy independent is as many as 10 years, like other countries have done, Brazil, Netherlands. It will not take 10 years to reap the benefits. This country must make use of alternative energy also, wind, solar, wave, and nuclear. Just think of the Billions of dollars that would not be going to other countries. That alone will increase the value of the US Dollar, and make the country stronger financially. How about a balance of payments that for years to come will be in favor of the United States.

  8. Sandra (18 weeks ago) Is this Spam?

    I definitely believe we should be MUCH MORE self sufficient. Find our own oil. Including Alaskan oil.

  9. Sally (18 weeks ago) Is this Spam?

    P.S.: I would like to see a companion piece to this article, "8 stocks to buy if Obama wins". I read a piece comparing the record of the stock market after presidential elections by party, and during Democratic and Republican administrations, and both parties have their pros and cons for the market, none as great as most think.

  10. Sally (18 weeks ago) Is this Spam?

    I cast my vote with Jereny T (#43) and Srinivas (#40). Clean coal IS an oxymoron, especially considering dirty mining practices such as mountaintop removal (See the documentary Kilowatt Ours, on which the practice is touched briefly and poignantly). I don't see relief in the short-term from increased drilling, and the long-term picture is too unclear for me to want to reverse national policy without STRONG environmental review. That said, I favor an Environmental Defense Fund–style cap and trade policy, which sets a definite, gradually lowering, cap on carbon emmissions, and allows those who can't meet the cap to buy "carbon credits" from those who do (an economic incentive for those who help to clean up our environment).

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