This post is part of a series in which TheStockAdvisors.com asked financial experts to name their top stock pick if McCain or if Obama wins the election.
Which stocks would benefit from a victory by either Senator John McCain or Senator Barack Obama? To help investors sort through the sectors and stocks best positioned to benefit in a post-election environment, we posed this question to some of the nation's leading financial newsletter advisors.
Importantly, this is not a partisan report; each participating advisor has provided a favorite stock for both candidates, focused not on political preferences but unbiased stock analysis. Below we feature those stocks and ETFs that the advisors believe will be the winners depending on which candidate prevails.
In business, as in international relations, there are battles you fight and battles you don't fight.
It looks like Boeing's decision earlier this year to protest the U.S. Department of Defense's award of an aerial refueling tanker contract constituted a savvy corporate tactic. Government auditors first ordered a rerun of the competition, and then today U.S. Secretary of Defense Robert Gates delayed the $35 billion award contest, saying there isn't enough time to complete the contest fairly, by the end of the Bush Administration, the Pentagon announced.
"Over the past seven years the process has become enormously complex and emotional -- in no small part because of mistakes and missteps along the way by the Department of Defense," Secretary Gates said in a statement. "It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment."
Gates added that the 'cooling off' period will allow the next administration to objectively review the military requirements and craft a new acquisition strategy for the refueling tanker.
Boeing Inc. (NYSE: BA) has won a tactical victory in its $35 billion competition for the Air Force's airborne refueling tanker. Bloomberg News reports that Defense Secretary Gates notified Boeing and EADS/Northrop Grumman (NYSE: NOC) that their bids would be due after the November election.
Boeing said it wanted the delay so it would have time to prepare a competitive bid. "Boeing threatened August 21 to pull out, saying that the 767-200 plane it offered more than a year ago is now too small to 'fit the bill' in clarified Air Force guidelines. The Northrop-EADS entry, based on the Airbus A330 commercial jetliner, can carry 250,000 pounds of fuel, more than Boeing's 205,000," according to Bloomberg.
This is great news for Boeing -- but it depends on who gets elected. If McCain becomes president, EADS/Northrop will probably win since his former finance Chair is Tom Loeffler, an EADS lobbyist. But if Obama wins, the competition is likely to be decided on the merits. Regardless, for the time being Boeing has won an important tactical victory which it should savor.
BusinessWeek reports that Boeing Co. (NYSE: BA) has repeated its threat not to bid on the $35 billion competition to supply an airborne refueling tanker to the Air Force. This is a competition that pits a Republican presidential candidate and his lobbyist former finance chair on the dole of a French aircraft company and its Alabama partner against the future prospects of a Democratically controlled Congress and White House that would tend to favor Boeing -- which has many workers in Washington state.
By threatening not to bid, Boeing is taking many big risks. The Air Force may decide to keep the terms of the competition the same -- bids due October 1 -- and contract wrap up before New Year's Day. If Boeing does not bid and the competition proceeds, EADS, parent of Airbus, and Northrop Grumman (NYSE: NOC) -- with many of its workers in the Republican-leaning Alabama -- would win the bid uncontested. If the Air Force extends the process another four months -- which Boeing would prefer -- there is a chance that the Air Force would still end up choosing the French company.
But Boeing is gambling that the odds of a more favorable outcome are greater if it threatens not to bid. Boeing thinks that Congress will not want only one bid for the Tanker and that Congress and the White House are likely to be controlled by the Democratic party in January. With the French lobbyist-backed candidate in the Senate minority, Boeing will be in a better position to shape the Tanker competition in a way that favors its victory.
Boeing (NYSE: BA) lost its bid for the new Air Force tanker to Northrop Grumman (NYSE: NOC). The aircraft builder was able to get the process re-opened and now has a shot at getting the business that was awarded to Northrop.
Winning another chance at the big contract is not enough. According toThe Wall Street Journal, "Boeing Co. said it is inclined to bail out of its effort to win a $40 billion contract to build aerial refueling tankers for the U.S. Air Force unless the Pentagon agrees to give it a total of six months to submit a new bid."
Boeing claims that it will take a long time to figure out how to configure one of its airplanes to haul the amount of jet fuel required by the Air Force.
The request is bogus. Boeing has been through the bidding process for the tanker once before. The idea that the company did not understand the specifications is remarkable.
Boeing may be trying to gain time to shave some of its costs off the project so that it can bring the price of its bid down. It should have done that in the first round. There is no reason it should get that additional time.
It is no wonder Northrop got the original approval, and it is likely to get it again in this round.
Douglas A. McIntyre is an editor at 247wallst.com.
After a day that saw U.S. equity markets decline in the neighborhood of 2%, U.S. stock futures earlier this morning pointed to a rough start Tuesday as well. News late Monday the Merrill Lynch said it's selling a big slice of its asset-backed securities and $8.5 billion in stock, renewed concerns over the financial sector health. But futures have started creeping upward, ahead of the latest readings on house prices with the Case-Shiller home price index for May and Conference Board reading of consumer confidence for July.
Meanwhile, we're still in the middle of earnings season and today
Northrop Grumman (NYSE: NOC), Viacom (NYSE: VIA), Valero Energy Corp. (NYSE: VLO), United States Steel Corp. (NYSE: X)
Electronic Arts (NASDAQ: ERTS) will report after the close of tradin
The big story making headlines since late Monday is the bombshell Merrill Lynch (NYSE: MER) that it is taking an enormous $5.7 billion write-down on losses from mortgage-backed securities (MBSs) and plans to raise $8.5 billion. MER shares already dropped 11.6% Monday before the news was out, and while they're rebounding 2.75% this morning, many are very uncomfortable with Merrill's current situation and actions.
Alcatel-Lucent (NYSE: ALU), the French telecommunications giant, is finally getting rid of its CEO Patricia Russo and Chairman Serge Tchuruk who will both resign later this year. It's no surprise shares are rebounding over 6% in premarket trading. ALU also reported its sixth consecutive quarter of losses. Alcatel-Lucent reported a net loss of 1.1 billion euros ($1.73 billion) for the second quarter including an euro810 million ($1.3 billion) goodwill writedown.
BusinessWeek reports that Defense Secretary Robert Gates is expected to make an announcement today about whether the Air Force will reopen the bidding for the $35 billion tanker program. Boeing Inc. (NYSE: BA) thought it had a lock on it but earlier in the year, the Air Force awarded the contract to EADS, parent of Airbus, and Northrop Grumman (NYSE: NOC). Boeing protested and last month, the General Accounting Office (GAO) reported that the award process was flawed.
That should come as no surprise. After all, Senator John McCain (R-AZ) was pushing for the European company to win the competition -- possibly since his then national finance chairman lobbied for that company. One of the sources I spoke with said that people suspect McCain arranged for a change in Tanker specifications to tilt the playing field in favor of EADS. This source also said that the Air Force neglected to notify Boeing of the change. Evidently, the GAO agreed that something was fishy here. It would be at least the fifth time that McCain had been influenced by lobbyists.
Now attention turns to Gates and Congress which hosts a battle between Senators from Washington, where Boeing has operations, and Alabama, where Northrop employs workers. BusinessWeek quotes Senator Patty Murray (D-Wash.), who introduced a Senate resolution on July 8, calling on the Pentagon to rebid the flawed tanker contract, as saying: "The GAO's decision was clear, and today we are reiterating that message so that the Pentagon knows there is no wiggle room. It's time to go back and hold a truly transparent competition that does our war fighters and taxpayers justice."
MOST NOTEWORTHY: BP Plc, Swiss Reinsurance and A. Schulman were today's noteworthy upgrades:
Morgan Stanley upgraded shares of BP Plc (NYSE: BP) to Overweight from Equal Weight as they believe the company is at an inflection and net income should grow 22% in 2009.
UBS upgraded Swiss Reinsurance (OTC: SWCEY) to Neutral from Sell on the company's balance sheet, which they believe is solid, but still sees material risk to consensus estimates.
KeyBanc upgraded shares of A. Schulman (NASDAQ: SHLM) to Buy from Hold as they believe the new CEO has had a significant positive impact and that downside is limited from current levels.
MOST NOTEWORTHY: BMC Software, Smart Modular and Entropic Comm were today's noteworthy initiations:
Stanford initiated BMC Software (NYSE: BMC) with a Buy rating and $45 target. The firm highlights the company's broad product portfolio and configuration management database leadership and thinks margin expansion should continue.
ThinkPanmure assumed Smart Modular (NASDAQ: SMOD) with an Accumulate rating and $5.50 target. The firm expects better DRAM pricing but expects SMOD to experience some headwinds with Hewlett-Packard (HPQ) losing share in the server market.
Broadpoint expects Entropic Comm (NASDAQ: ENTR) to benefit from the adoption of applications that allow video through numerous devices, especially high definition and data content. Shares were started with a Buy rating and $6 target.
The Government Accountability Office has decided that the Air Force has done Boeing (NYSE: BA) dirty. It says that in the bidding process for a new air tanker, the Air Force should not have favored Northrop-Grumman (NYSE:NOC) for the project. NOC won the tanker deal several months ago.
The Wall Street Journal reports that the decision "effectively gives Boeing the chance to recapture its decades-long lock on the business of supplying planes that can refuel other planes in midair." The GAO said the Air Force analysts had made mistakes in some of their evaluation analysis.
The whole matter stinks. Boeing has been able to push its agenda in Washington by lobbying hard to keep jobs for the tanker in the US. The Northrop proposal would have had EADS, the European airplane maker, do some of the work. Several senators got behind the idea that Boeing should get another chance.
Was the GAO influenced by Congress? Who will ever know, but if Boeing, which is the incumbent for supplying the military tankers, can get into the position to bid again, something seems a bit off.
Douglas A. McIntyre is an editor at 247wallst.com.
Boeing may abandon plans to sell its aerial refueling tanker internationally if it loses its protest of a U.S. Air Force decision to buy $40 billion worth of tankers from a competitor, The Wall Street Journalreported Wednesday [subscription].
Boeing's Mark McGraw, the executive in charge of the program, told The Journal that Boeing had counted on the Pentagon to provide enough volume to make an international tanker business viable.
In February, Northrop Grumman (NYSE: NOC) and partner European Aeronautic, Defence & Space (EADS), parent of Airbus, beat out Boeing, the Air Force's only supplier of the aircraft for half a century; the Air Force recently announced that it continues to support that decision. Boeing protested the award to the Government Accountability Office, which must make its recommendation to the Pentagon by Thursday.
Boeing's (NYSE: BA) shares were virtually unchanged on the news in Wednesday mid-day trading, gaining eight cents to $74.43. Northrop Grumman rose $1.03 to $72.09 and EADS fell 46 euro cents to 13.57 euros on the Paris Exchange.
TD AMERITRADE Holding Corporation (NASDAQ: AMTD) said Tuesday its metrics -- including client trades per day and total client assets -- for May have improved, and that third quarter earnings are expected to be at or near the high end of the prior guidance range. Shares were up nearly 2% in after-hours trading.
Microsoft Corp. (NASDAQ: MSFT) said Wednesday it has acquired Navic Networks, specializing in emerging forms of television advertising technology, to optimize the delivery and placement of TV advertising. Terms of the deal were not disclosed. Meanwhile, China has begun an anti-monopoly investigation into Microsoft with possibility that lawsuits from local companies could follow.
According toThe Wall Street Journal, Reliance ADA of India might provide high level executives at DreamWorks, including Steven Spielberg, with financing, enabling the media company to part ways with Viacom (NYSE: VIA)'s Paramount Pictures.
For the first time Monday I heard John McCain comparing Barack Obama to Jimmy Carter. I had heard this before in other arenas, but not from McCain. I guess that despite these two presidential candidates pledging to the American people to bring change and resist politics as usual, they are both, as usual as one could get.
Obama is being shaped by the pressures of running for office and to believe otherwise is delusional. I suppose one has to have hope but the effects of the campaign are becoming clear. Obama has been painting McCain as an extension of Bush, which is nonsense, and now in a typical tit-for-tat response, McCain is filling the air with Carter references.
Both McCain and Obama are wrong in their assessments of their opponents and they are becoming commoners to resort to the bottom of the barrel campaign techniques used in every campaign for most of our nation's proud history. Obama gave up the high ground too easily and McCain has decided he can sling mud with the best of them.
Bloomberg News reports that Boeing Co. (NYSE: BA) has a whole lot of losing going on. Yesterday, Boeing suffered its fourth straight defeat in three months on a U.S. defense contract. This loss represents $41 billion in lost revenue.
Here are the four contracts:
Yesterday.Lockheed Martin (NYSE: LMT) the world's largest defense company, beat Boeing for a $1.46 billion U.S. Air Force award to build a new network of navigation satellites for military and civilian use. The Air Force said it reviewed five years of past performance for both contractors. Boeing has yet to launch a single satellite under its most recent GPS contract from April 1996, and in 2006 the company forfeited $21.4 million and replaced the program's managers after delays and cost overruns.
February 2008. EADS, parent of Airbus and Northrop Grumman (NYSE: NOC) won a $35 billion tanker contest for the Air Force. I've spilled much electronic ink on this one -- it looks like the Air Force changed the specifications for the project but only told EADS about the change.
Harris Corp. (NYSE: HRS) has had a nice run. Over the past five years, the stock price has gone from $14 to $59.
The company is a key player in communications and IT – with about 7,000 engineers and scientists. With the spread of terrorism and the wars in Iraq and Afghanistan, the company's skill sets are certainly "must haves."
But, trends do come to an end (especially in the defense industry). That may be the thinking with the folks at Harris. That is, according to a report in the Wall Street Journal (subscription only), it looks like the company is shopping itself for a potential sale.
I doubt they will have much trouble finding suitors. After all, the sector is full of major operators looking to bulk things up, such as Raytheon (NYSE: RTN), BAE Systems PLC (NASDAQ: BAESY) and Northrop Grumman (NYSE: NOC).
Moreover, the fundamentals still are intact at Harris. According to its Q1 report, revenues increased from $1.07 billion to $1.33 billion. Net income came to $108 million, or $0.78 per share.
So far in today's trading, the shares of Harris are up about 9%.
After a day that saw U.S. equity markets decline in the neighborhood of 2%, U.S. stock futures earlier this morning pointed to a rough start Tuesday as well. News late Monday the Merrill Lynch said it's selling a big slice of its asset-backed securities and $8.5 billion in stock, renewed concerns over the financial sector health. But futures have started creeping upward, ahead of the latest readings on house prices with the Case-Shiller home price index for May and Conference Board reading of consumer confidence for July.
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Boeing may abandon plans to sell its aerial refueling tanker internationally if it loses its protest of a U.S. Air Force decision to buy $40 billion worth of tankers from a competitor, 
For the first time Monday I heard John McCain comparing Barack Obama to Jimmy Carter. I had heard this before in other arenas, but not from McCain. I guess that despite these two presidential candidates pledging to the American people to bring change and resist politics as usual, they are both, as usual as one could get.
and 
. He also operates 
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