Thursday, March 19, 2009

Obama Stocks

Talk about a no brainer, Citigroup Inc. (NYSE: C) was beaten down to the one dollar range, so it had no place to go but up. Add to that two sure fire buy signals, a huge short interest that had to start short covering and the fact that banks are getting blank checks from their favorite uncle, and you have a classic powder keg. Citi is already nearing a triple from its lows. It’s these types of returns that have investors asking, “Where are the next opportunities?”

While the banks will be the biggest beneficiaries, by far, they’re not the only beneficiaries of the federal funds free for all. Investors can still pick up bargains in alternative energy, infrastructure and technology stocks, which are all expected to be the next President Obama plays. The technology plays range from Warren Buffet’s latest pick, Nalco Holding (NYSE: NLC), a water treatment technology company, to Kraig Biolabs (OTCBB: KBLB), a small biotech firm, and the dynamics are just like Citibank; these are the types of technologies that could feel the effects of the stimulus package and their stocks that have been knocked down way below where they should be.

We recently saw how Obama’s decision to lift the ban on federal funding for embryonic stem cell research and a $15 billion stimulus package for scientific research shot up the entire sector. Aastrom Biosciences Inc’s (NASDAQ: ASTM), Advanced Cell Technology (OTC: ACTC), Neuralstem (NYSE: CUR) and StemCells Inc (NASDAQ: STEM) shares almost doubled on the news, while others like Cytori Therapeutics. (NASDAQ: CYTX), Geron Corp. (NASDAQ: GERN), NeoStem. (NYSE: NBS), Osiris Therapeutics Inc. (NASDAQ: OSIR), ReNeuron Group (LSE: RENE) and Thermogenesis. (NASDAQ: KOOL) also had impressive moves.

In fact, the biotechs moved so unquestionably that equipment manufacturers and suppliers like Life Technologies (LIFE) and Sigma-Aldrich (SIAL) have been on a roll, after a credit crises induced hiatus.
Now, more than ever, don’t underestimate the Obama effect on the market and when you find the right opportunity, make sure you’re in a position to take advantage of the market, but don’t overestimate your broker’s ability to discover the obvious opportunities.

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