3 Stocks That Could Skyrocket Next Week

Image Source: Hillary Clinton Campaign.

After over a year of campaigning, we'll finally have a new president next week.

The market's moves after each debate have made it clear that Wall Street is closely watching the election, and the sharp sell-off following the Brexit decision earlier this year shows that political events can have an outsized impact on the stock market. The day after President Obama's 2012 reelection saw especially high trading volume with theS&P 500 down more than 2%, though that slide may have been motivated in part by other factors, including the looming fiscal cliff and concerns about growth in Europe.

However, the reaction of specific sectors seemed to be directly caused by Obama's reelection. Coal stocks and for-profit educators tumbled as his administration had been tough on those sectors, while stocks in healthcare jumped as his administration was seen as favorable to that sector. Gun manufacturers' stocks also surged as investors bet that potential new gun control laws could motivate a buying spree.

With four days to go, the outcome of the election is still to be determined, but poll aggregators and prediction markets are favoring Clinton over Trump. Prediction market Predictit.org gives Hillary Clinton a 73% chance of winning,whileThe New York Times poll aggregator gives the former Secretary of State an 84% chance of winning and the blog FiveThirtyEight, which correctly predicted 99 of 100 winners by state in the past two elections, gives her a 66% chance of winning.

If Hillary wins, here are three stocks that could skyrocket next week.

1. Smith & Wesson Holding Company(NASDAQ: SWHC)

Gun manufacturers have surged during the Obama administration, buoyed by record gun sales due to fears about potential gun control legislation and a crackdown on gun ownership. Those fears about increased legislation never materialized, but that mindset has persisted.

Both Smith & Wesson and peerSturm, Ruger(NYSE: RGR) jumped by more than 10% the week Obama was reelected, and based on the recent the rise of armed militia groups like the 3 percenters, the reaction to a Clinton presidency among gun advocates could be even stronger. Smith & Wesson shares are up nearly 1,000% over the last five years, riding a wave of gun-buying.

The National Rifle Association has been running ads in swing states saying that Clinton would confiscate guns if she was elected president, stoking fear among gun owners of a Clinton presidency. If she does win the election, gun sales are likely to surge, and Smith & Wesson should pop during election week again.

2. Vivint Solar(NYSE: VSLR)

Among the two candidates' many differences is on energy policy. Donald Trump has promised to bring back coal and put coal miners back to work, while Clinton would make a push toward renewable energy. Clinton has set a goal of installing 500 million solar panels in the country in her first term, which would lead to a nearly 700% increase in U.S. solar capacity,and she has promised to extend subsidies for solar energy put into place during the Obama administration.

Rooftop solar-panel installer Vivint Solar had not yet gone public at the time of the last election, but a number of solar stocks have benefited from Obama's policies, especially the extension of the investment tax credit that helps subsidize solar installations, which sent many solar stocks up by double digits. A win by Clinton could give a big lift to Vivint, the #2 solar installer, which has struggled since a failed takeover by SunEdison, as well as others in the renewable business.

3. HCA Holdings Inc(NYSE: HCA)

Health care is yet another area where the two candidates disagree. Donald Trump has threatened to dismantle the Affordable Care Act, while Hillary Clinton wants to build on it and enhance it. By giving more Americans health insurance and expanding benefits for those who already have it, Obama's signature healthcare act has been a boon for hospital administrators like HCA Holdings. During the last election, the stock shot up nearly 10% the day after Obama was reelected.

The company operates hospitals in 20 states, but currently only five of them have ACA state exchanges, meaning there is a significant opportunity for the company to expand into new markets as more Americans get insured. If Clinton wins the election, the stock could spike next week and gain over the long term if she is able to accomplish her healthcare policy goals.

The outcome is still to be decided, but the markets should get shaken up no matter who wins. If Hillary Clinton is the victor, these stocks should be among the big winners.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.