Do not underestimate the power of a new administration in Washington. With the ability to spend a huge amount of dollars, team Obama can wield tremendous influence in the market.
Case in point is the stem cell space. It is widely expected that Obama will issue an executive order eliminating restrictions on stem cell research.
Stocks like StemCells Inc. (NASDAQ: STEM) and Geron Corp. (NASDAQ: GERN) have been moving higher since the inaugural.
Coincidentally, on Friday, GERN announced approval for human trials for its treatment of spinal chord injuries using stem cells. Both GERN and STEM were up big as a result.
Another space expected to do well under the Obama administration is construction. A massive stimulus plan is said to be coming in February. A key point of the plan will be to boost infrastructure spending.
The dollars will benefit companies like Fluor Corp. (NYSE: FLR) and Jacobs Engineering (NYSE: JEC). Unlike stem cells, the market has yet to move these stocks higher. FLR is down more than 10% and JEC is down nearly 18% so far this year.
If you missed the stem cell move, take a run at JEC. I made the stock one of my Top 10 Stocks for 2009, and so far the pick has been a dud. Since the election in early November JEC is only up some $5.
That kind of a move only coincides with the bounce off the market lows. In other words, there has not been an out-of-the box rally in JEC due to the expected spending on infrastructure.
Don't worry. The rally will come.
At the moment, the market is in extremely poor shape. Investors are reluctant to take long positions with an economy that is teetering. The aversion to risk increases as the banking system looks to need more capital than currently expected.
That said, this too shall pass.
Before 2009 ends, I expect JEC to gain 10%. That would put the stock around $53. With the stock currently at $40 and change, there is clearly a big winner here for those willing to take the risk.
I don't expect JEC to move as GERN did Friday, but I do think there is a nice return to be had. Any sort of calmness in the financial sector will be the trigger for reaching these goals.
Louis Navellier's PortfolioGrader Pro, which offers free ratings for nearly 5,000 Wall Street stocks, rates JEC a B, or Buy.
Jamie Dlugosch is a contributor to InvestorPlace.com.
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