We truly live in crazy times. After watching the the GOP Presidential Debate this sentiment was firmly cemented in my mind , this sentiment was cemented in my mind. I am certainly not alone with this thought having witnessed the social media sphere explode with a burst of incredulity at the debate.
Despite the clear game show nature of the current Presidential Election year, there is one candidate who is crushing the competition.
This individual is bombastic and unlike any Presidential candidate who has come before him.
However, Americans have gravitated toward him in droves since he seems to possess the very non-politician trait of telling the truth no matter what the consequences.
The reason being is that this individual is a self-made billionaire, therefore does not have to please any lobbying group or political action committee.
Clearly, I am referencing the very likely next President of the United States Donald Trump. Certainly anything can happen between today and the election, but things are looking very positive for the real estate developer to take the White House in November.
Love him or hate him, stock market investors need to understand how a Trump Presidency will likely effect the stock market
We have identified 3 stocks that will potentially benefit greatly should Trump take the White House.
First, let’s take a closer look at Trump’s plan for the U.S. economy.
While we do not have the room here to go over all of Trump’s platform, let’s look at the most critical aspects for the economy.
First his stand on taxation:
Trump believes that America needs a bold, simple and achievable plan based on conservative economic principles. This plan does that with needed tax relief for all Americans, especially the working poor and middle class, pro-growth tax reform for all sizes of businesses, and fiscally responsible steps to ensure this plan does not add to our enormous debt and deficit.
This plan simplifies the tax code by taking nearly 50% of current filers off the income tax rolls entirely and reducing the number of tax brackets from seven to four for everyone else. This plan also reduces or eliminates loopholes used by the very rich and special interests made unnecessary or redundant by the new lower tax rates on individuals and companies.
Sounds Good, But How Is It Funded?
- Reducing or eliminating most deductions and loopholes available to the very rich.
- A one-time deemed repatriation of corporate cash held overseas at a significantly discounted 10% tax rate, followed by an end to the deferral of taxes on corporate income earned abroad.
- Reducing or eliminating corporate loopholes that cater to special interests, as well as deductions made unnecessary or redundant by the new lower tax rate on corporations and business income. We will also phase in a reasonable cap on the deductibility of business interest expenses.
DETAILS OF DONALD J. TRUMP’S TAX PLAN For BUSINESS
Under the Trump plan, America will compete with the world and win by cutting the corporate tax rate to 15%, taking our rate from one of the worst to one of the best.
This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes and deductions available to the very rich and special interests end up hitting small businesses and job creators as well. The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate to help these businesses, entrepreneurs and freelancers grow and prosper.
These lower rates will provide a tremendous stimulus for the economy – significant GDP growth, a huge number of new jobs and an increase in after-tax wages for workers.
Trumps Immigration Plan
Trump plans to get tough with immigration. His plan is among the most severe ever proposed by a serious candidate.
- Triple the number of ICE officers.As the President of the ICE Officers’ Council explained in Congressional testimony: “Only approximately 5,000 officers and agents within ICE perform the lion’s share of ICE’s immigration mission…Compare that to the Los Angeles Police Department at approximately 10,000 officers. Approximately 5,000 officers in ICE cover 50 states, Puerto Rico and Guam, and are attempting to enforce immigration law against 11 million illegal aliens already in the interior of the United States. Since 9-11, the U.S. Border Patrol has tripled in size, while ICE’s immigration enforcement arm, Enforcement and Removal Operations (ERO), has remained at relatively the same size.” This will be funded by accepting the recommendation of the Inspector General for Tax Administration and eliminating tax credit payments to illegal immigrants.
- Nationwide e-verify.This simple measure will protect jobs for unemployed Americans.
- Mandatory return of all criminal aliens.The Obama Administration has released 76,000 aliens from its custody with criminal convictions since 2013 alone. All criminal aliens must be returned to their home countries, a process which can be aided by canceling any visas to foreign countries which will not accept their own criminals, and making it a separate and additional crime to commit an offense while here illegally.
- Detention—not catch-and-release.Illegal aliens apprehended crossing the border must be detained until they are sent home, no more catch-and-release.
- Defund sanctuary cities. Cut-off federal grants to any city which refuses to cooperate with federal law enforcement.
Most investors understand how Trump’s 15% top corporate tax will benefit every U.S. based company. However other parts of his plan will benefit specific sectors.
Here Are 3 Stocks That Thrive Under Trump
- The Geo Group (NYSE:GEO)
Trump’s immigration plan will be a huge benefit for private prisons, security companies and defense firms.
The number one stock that will benefit from this change is the The Geo Group Real Estate Investment Trust or REIT.
GEO boasts a long term relationship with the Feds and U.S. Immigration and Customs Enforcement (ICE). It is the largest provider of correctional, detention and community reentry services to the federal government.
Looking at the numbers, the Feds accounted for 42.5% of GEO’s revenue in 2014, and ICE specifically accounted for 15.6%. There is no question that Trump’s plan would ramp these figures significantly higher.
- Cemex (NYSE:CX)
Another stock that stands to benefit greatly from Trump’s stance on immigration. The Presidential candidate has stated repeatedly that he plans on building a wall on our southern border with Mexico.
In addition to building the wall, Trump has plans to make the Mexican government pay for it.
Obviously, the wall would be made of cement and the San-Pedro based cement company would likely be the Mexican government’s first choice.
It is estimated that such a wall could cost up to $25 billion to construct. Imagine the profits to companies such as Cemex!
- HCA Group (NYSE:HCA)
Trump’s plan is very kind to military veterans. Under his plan, veterans can bring their ID card to any doctor or hospital that accepts medicare and receive treatment. Vets will no longer be forced to go to veteran’s hospitals for health benefits.
HCA operates and manages around 165 hospitals and 115 freestanding surgery centers in 20 U.S. states and England. It also draws huge amounts of money from Medicare.
Imagine the potential profits from a huge influx of veterans into the private health care sector for companies such as HCA.
Along with these three companies, there is a tremendous number of multi-national corporations that are currently using the tax system to hide huge sums of cash overseas. Trump’s program will allow these firms to repatriate the capital with only minor penalties.