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In case you haven't heard, a general election is coming up. There are many UK stocks that could be affected in one way or another.
The television in my house has been taken over by Euro 2024, so news coverage of elections and partisan politics hasn't been trending for the month as much as I'd like. However, the usual promises and challenges emerge each time, and I've picked three stocks from three sectors that could see a rise.
<h2 class="wp-block-heading" id="h-the-sectors-and-stocks-i-m-watching”>The Sectors and stocks I'm Watching
- Accommodation. It is fairly well known that there is a housing crisis in the UK and that demand is outstripping supply. All major political parties are trying to address this shortfall, and this could be good news for the UK's largest residential developer, Barratt Developments (LSE: BDEV). It has the profile and brand power to take advantage of this and generate greater profits and rewards for investors.
- Defending. Protecting our borders is always a priority, especially in the current era, as technology advances and the geopolitical landscape is more complex than ever. Rolls-Royce (LSE: RR.) is the stock to watch here, in my opinion. It appears to have done a 180 degree turn from a couple of years ago under new leadership and now has a large order book, a healthy balance sheet and bright future prospects. Additionally, defense spending is at all-time highs and the company can continue to capitalize on this to boost profits.
- Health care. You may have heard people complain about waiting times for doctor and GP appointments. Well, the state provider is under intense pressure to ease waiting lists and provide new facilities and upgrade others. Real Estate Investment Trust (REIT) Primary health properties (LSE: PHP) could benefit from any policy that supports this. He makes money from the NHS by renting out his properties for GP surgeries and other healthcare benefits.
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No promises!
Let me break down some risks that could affect the stocks mentioned if promises are not kept or even addressed.
Firstly, from Barratt's point of view, he has two issues to deal with. Higher interest rates and inflation are a concern. The former is making it difficult for buyers to get onto the property ladder, hurting sales and performance. The latter is driving costs through the roof, meaning margins are tighter than ever.
Next, Rolls-Royce stock has been rising in recent months and shows no signs of slowing down. From his point of view, competition in the sector from actors such as BAE, as well as the resolution of geopolitical conflicts, could slow down its rise, as well as its returns.
Finally, Primary Care is also at the mercy of economic conditions. The growth of REITs is usually done through loans to invest in new assets. When interest rates are high, debt can be more expensive and margins and performance could suffer. Furthermore, working conditions in the NHS have recently come under scrutiny. With many healthcare professionals leaving the industry or moving abroad, increased demand for healthcare facilities is all well and good, but if there are inadequate levels of staff to run them, this could hurt business and profits.
