3 stocks to buy before the US election

The US election could be the single-largest cause of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) sinking more than 4.5% in the past month.

Much of that has to do with the uncertainty of the outcome, and the prospect of Donald Trump becoming president. Markets don’t like uncertainty and a Hillary Clinton win could be huge news for the world’s stock markets including ours.

Among the stocks falling in the month on little or no news, REA Group Ltd (ASX: REA) is down 13%, as is Sirtex Medical Limited (ASX: SRX) and Technology One Limited (ASX: TNE). Webjet Limited (ASX: WEB) has lost 23% of its share value, OFX Group Ltd (ASX: OFX) is down 21% and BWX Ltd (ASX: BWX) has dropped 16%.

Among the big banks, Australia and New Zealand Banking Group (ASX: ANZ) has fallen 4%, Commonwealth Bank of Australia (ASX: CBA) is down 3%, National Australia Bank Ltd (ASX: NAB) is the biggest loser, falling 7% and Westpac Banking Corp (ASX: WBC) share price is flat.

The following three stocks could be the best stocks to buy before the US election (Wednesday Australian time) if the markets rally hard.

Cochlear Limited (ASX: COH)

Cochlear has seen its share price sink 12% in the past month, and from a high of $144.12, the share price is now $125.34. The hearing aid manufacturer produced a 30% increase in net profit in fiscal 2016 but appears unlikely to produce that growth again in FY2017. Forecasts are for growth of between 10% and 20% over FY2016, which may be the company being conservative. The current price weakness may be viewed as a bargain 5-10 years from now.

CSL Limited (ASX: CSL)

At under $100, biopharmaceutical company CSL could be the bargain of the century. Shares are currently trading at around $99.13 and at a P/E of ~27 times last year’s earnings. Shares in CSL are very rarely cheap, due to the company’s high quality and consistent earnings growth. The share price reached $120 in July before falling away, and like Cochlear, this could be the time to jump in or top up your holding.

Flight Centre Travel Group Ltd (ASX: FLT)

Hammered by a profit downgrade last week, the travel agent has seen its share price plunge below $30. At the current price of $29.93, the shares trade at a trailing P/E of 12.2x earnings and are paying a dividend yield of 5.1%. With a growing, global business, Flight Centre has repeatedly illustrated that its business is not threatened by pure online players, and this time is not different.

Discover the 'new breed' of blue chips that could take your portfolio higher

Forget the banks like ANZ and NAB. These 3 "new breed" top blue chips to buy now pay fully franked dividends and offer the very real prospect of significant capital appreciation. Click here to learn more.

The report is free! No credit card required.

Motley Fool contributor Mike King owns shares of Cochlear Ltd., CSL Ltd., and Flight Centre Travel Group Limited. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.