It’s Election Day Tuesday and the U.S. is waiting anxiously to find out who the country’s next president will be. And while people and businesses alike are watching closely to see which side’s policies come into effect starting next year, the battle between President Barack Obama and his Republican challenger Mitt Romney may be of special interest to a select few enterprises.
According to investment advisor Nigam Arora, a Romney win is likely to hurt companies such as Apple (NASDAQ:AAPL), General Motors (NYSE:GM), and Ford (NYSE:F) fairly deeply. In fact, Nigam contends that a Republican term starting next year will result in Apple’s stock falling below $400. The company is currently trading at around $586.
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The main reason for the possibility of such a scenario is that all these companies are highly dependent on China for their growth and Romney has repeatedly said that he is prepared to declare that country a currency manipulator. “Apple will be hit with a double whammy, falling sales and falling margins,” Arora writes for Forbes. “A big part of the bull case on Apple is growth in China. For the year Apple has garnered sales of $23.8 billion from China compared to $13.3 billion from China in 2011. During the last quarter iPad sales grew by 45 percent in China and iPhone sales were up 38 percent.”
The analyst adds that if Romney were to do what he has threatened, the “nationalist” Chinese will shun Apple products in favor of Samsung. In addition, since most of Apple’s manufacturing is done in China, its supplies will be hurt.
And while GM and Ford are currently benefiting in China at the expense of Japanese manufacturers such as Toyota Motors (NYSE:TM), if “Romney wins and carries through with his threat, European car makers will benefit at the expense” of the American auto companies.
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