Potential Growth Stock Winners During the Trump Presidency

Infrastructure and defense are the two smartest options for investors to drive gains during the Donald Trump presidency.

The Republican president elect repeatedly said during his campaign that he would make substantial improvements to both if he were elected. If he can boost funding to each without raising taxes -- another campaign promise -- companies providing products and services for infrastructure and defense could see huge benefits. On Tuesday, Trump pulled off a shocking upset, winning election over Democratic rival Hillary Clinton despite probably losing the popular vote. The vote totals won't be final for some time. 

Trump said fixing America's inner cities and rebuilding highways, bridges, tunnels, airports, schools, hospitals a foundational stone of his economic policy. This potential trend could provide investors with a multi-year investment opportunity.

Construction, engineering and heavy equipment providers could see huge benefits from Trump's plan to rebuild the U.S.

Investors might want to buy S&P 500 stocks in the engineering and construction industries, including Caterpillar. Or consider Fluor, which provides equipment rental services. Its domestic construction exposure make it a compelling investment idea.

Investors should buy other construction-related stocks only in the event of a pull-back, including Martin Marietta Materials, which is up about 65% year to date, Vulcan Materials, and Manitowoc, which is up nearly 44% over the same period.

In a September speech, Trump spoke about the need for a more robust defense: 90,000 extra soldiers, an additional 42 Navy ships and 100 additional modern fighter aircrafts. Trump also mentioned augmented nuclear and missile defense systems.

Top quality defense stocks like Northrop Grumman, Lockheed Martin and Raytheon are great buys over the medium to long term.

These organizations have a wide portfolio of products, and have suffered in the past as a result of U.S. defense uncertainties.

BAE Systems, which operates military hardware ranging from bullets to battleships, looks appealing, but given that the company is not U.S.-based, it may not be in line for many government contracts. 

More soldiers would trigger the need for tactical vehicles, and a big winner could be Oshkosh, with its heavy duty, all-wheel drive military trucks.

Defense contractor General Dynamics is probably a frontrunner in this category, because its marine systems group builds complex ships and nuclear-powered submarines.

Instead of defense stocks, investors could also take a portfolio approach and buy these exchange traded funds or ETFs. We recommend iShares US Aerospace & Defense, PowerShares Aerospace & Defense ETF, and SPDR S&P Aerospace & Defense ETF.

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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.

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