What stocks could rise (and fall) if Labour wins an early general election?

Royston Wild discusses some stocks that could surge if Labour wins any upcoming election. Read on!

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The maelstrom of chaos, cluelessness and cavalier manoeuvring in Westminster right now means that, to some commentators at least, Jeremy Corbyn appears a whisker away from seizing power in the UK.

All focus right now is on who will succeed Theresa May as prime minister once the Conservative leadership contest wraps up on July 22. Regardless of who comes out on top, though, there’s plenty predicting that any new government will unravel within a matter of weeks, or months, a reflection of the monumental challenge to create a credible Brexit plan and, more importantly, to sell it to Tory members of Parliament.

In a recent article I discussed the gambling industry’s major players and explained how, like the utilities providers, can expect to suffer in the event of a Conservative collapse and Labour winning a subsequent general election.

Of course it’s not all bad if Labour succeed at the ballot box. Indeed, there’s a number of stocks that could benefit from a Corbyn-led government, providing you and I with plenty of investment opportunity.

NHS investment to surge?

Protecting and investing in the National Health Service is a critical issue for any party intent on winning power, though you can expect more funding to flow through should Labour march into Downing Street.

Outgoing prime minister Theresa May last summer vowed to invest an extra £20bn into the health service each year by 2023, though Labour was quick to say that it would go even further than this. It pledges to raise investment by between 4% and 5% in real terms per annum. This outstrips the 3.4% annual rise scheduled under current Tory plans.

It’s easy for opposition politicians to make financial pledges when they don’t have control of the pursestrings. However, it’s logical to expect health spending to be higher under the Labour party given their enthusiasm to raise taxes to pay for it, versus its main political rivals.

Investment in the NHS ballooned the last time Labour was in government and figures from the London School of Economics illustrate this perfectly. According to the institution, health expenditure in cash terms between 1997 and 2008 — two years before the party was thrown from power — grew by an eye-popping 128%, from £55.1bn to £125.4bn.

Profits prognoses getting better?

So which stocks could benefit under larger healthcare investment, then? Well, those involved in the NHS supply chain could receive a revenues boost, companies such as ConvaTec Group, which supplies colostomy bags, catheters and a broad range of wound care products, or Smith & Nephew, which is a giant in the field of hip and knee replacements.

Bioquell, whose hi-tech machinery and isolation pods helps to curtail cross-contamination in hospitals, is another business which could benefit from more NHS investment, like Scientific Digital Imaging, which provides imaging and sensory equipment for healthcare and other industries. A rise in hospital spending might give Tristel, a manufacturer of cutting-edge disinfectants, some extra help in the revenues column too.

Finally, a boost to health spending may also provide a bottom-line boost to owners of primary healthcare facility owners such as Primary Health Properties and Assura. These companies are already thriving as the NHS spends vast sums to divert patients from hospitals to local facilities like GP surgeries instead. And things could get even better if Corbyn reaches the top of the political hill.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

View of Tower Bridge in Autumn
Investing Articles

The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here's one stock he'd willingly…

Read more »

Investing Articles

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »