As Jim Cramer digested the stunning victory of Donald Trump, he realized the stock market would suddenly become a very different place with different sectors leading the charge.
"The biggest impact of this shocking election is probably on the healthcare group," the "Mad Money" host said.
For over a year, the prospect of Hillary Clinton winning the White House has weighed on drug stocks, especially after she tweeted about cracking down on pharmaceutical price gouging in September of 2015.
But with a Trump regime entering Washington, those worries have pretty much been taken off the table. The Republicans are all about limited regulation and free markets. Thus, Cramer doesn't expect them to crack down on drug pricing because it would stifle innovation.
For the segments of the health care sector that don't have price wars, I think we need to get a lot more positive because these stocks have more room to run.Jim Cramer
Cramer also expects Republicans to attempt to repeal Obamacare, which could hurt many healthcare plays, but he thinks the Democrats in the Senate will filibuster.
A GOP Senate also means investors don't need to fear aggressive interventions from a Democratic committee chairman, such as Bernie Sanders running the Budget Committee or the Committee on Health, Education, Labor and Pensions, which are both relevant to health care.
Now, after being crushed for ages, health care companies have very cheap valuations. Cramer warned that not all companies are worth owning, as some are engaged in a price war with competitors, such as the wholesale drug distributors.
"For the segments of the health care sector that don't have price wars, I think we need to get a lot more positive because these stocks have more room to run," Cramer said.
Cramer warned to also stay away from Valeant's ugly balance sheet, and while CVS seemed to have headwinds after reporting a mixed quarter, he thinks most of the weakness is CVS-specific.
He recommended Merck as one of the best to own, followed by Pfizer, Celgene, Allergan and Walgreens Boots Alliance.
"I've been telling you that we can figure out how to make money, regardless of who wins the White House. And with last night's surprise Trump victory, things are looking a lot better for the healthcare cohort," Cramer said.
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