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YOUR MONEY

BY PETER KING

March 9, 2008

Wall Street sizes up the candidates

Are you better at picking winners of elections than winners on Wall Street? If so, you may be able to profit from your political prognostications.

Investment pros say certain stocks and sectors do better depending on who's in the White House. TheStreet.com's senior financial analyst, Kevin Baker, says companies that benefit from military spending are likely winners in a John McCain presidency - so Fidelity Select Defense & Aerospace (FSDAX) and PowerShares Aerospace & Defense (PPA) could prosper. As could oil, defense, pharmaceuticals and managed health care stocks, says John Mugarian in his Dynamic Growth investment newsletter.

If Barack Obama wins, Baker says a portfolio should contain clean-energy and biofuel stocks, like First Solar (FSLR), Ascent Solar Technologies (ASTI) and FuelCell Energy (FCEL). Mugarian concurs but advises selling companies whose main business is fossil-fuel, managed health care or pharmaceuticals.

As for Hillary Clinton, Baker says insurance may prosper because her health-insurance plan relies on the private sector. His pick: iShares Dow Jones U.S. Insurance Index Fund (IAK). Mugarian's Clinton portfolio contains alternative energy, pharmaceuticals and managed care companies.

Good in the best and worst of times

Your car probably has an air bag to protect you from a crash. Perhaps you should also have several in your portfolio.

Kiplinger's Personal Advisor says when the market looks glum, it's time to focus on companies that make products people buy in good times and bad. These "air bag stocks" may not save you from financial pain, but they may lessen the injury.

Among the stocks Kiplinger's recommends: Colgate-Palmolive (CL), Abbott Laboratories (ABT), Nicor (GAS) and Kraft Foods (KFT). And it says you may also want to consider Vanguard Consumer Staples (VDC), an exchange-traded fund that holds a basket of consumer companies.

BULLS AND BEARS

Big Lots Inc. (BIG)

Last: $20.76

52-week return: -28.0%

After the closeout retailer posted a solid quarter, MKM Partners upgraded shares to "buy," raising BIG's price target to $26 from $19. Soleil Securities initiated coverage at "buy" with a $32 target.

DealerTrack Holdings, Inc. (TRAK)

Last: $17.45

52-week return: -42.6%

Analysts expressed concerns the Lake Success-based supplier of financial data to auto dealers is losing market share to a rival. Lehman Brothers cut TRAK's price target to $22 from $41.