Tax reform could come before 2018, and here are the two names you want to buy: Strategist

With the U.S. House of Representatives and Senate taking a few steps forward on tax reform this week, one strategist told CNBC he has identified the biggest winners from a GOP tax plan.

According to Bill Stone, chief investment strategist at PNC Asset Management Group, not only will tax reform pass before 2018, but the repatriation clause of the bill, in particular, could be a huge boon for certain companies. The current tax plan would cut the tax rate on U.S. companies' overseas income.

Stone believes that given the terms of repatriation as it currently stands in the tax bill, health care names like Pfizer would be a big beneficiary.

"I mention Pfizer because they recently beat on earnings and raised guidance, and they're also looking at perhaps spinning off their consumer health division," he told CNBC's "Trading Nation" on Friday. "Not to mention [the stock has a] pretty high dividend yield of over 3 percent."

In Pfizer's case, Stone believes the 'Big Pharma' name could use the cuts from repatriation to acquire the rights to more drugs.

Along with health care names, Stone believes tech names would be a strong bet given the amount of foreign cash they acquire. In this case, the strategist is picking Cisco for a rally, should the tax bill pass.

The company "finally had a nice beat on earnings and raised guidance," he said. "[We also] think you're going to see a bigger picture in the economy in capital expenditures. Usually capital expenditures is technology spending, so I think Cisco's in that spot."

"You would definitely see [Cisco] do a lot of stock buybacks and raise the dividend, which is already over 3 percent," he added.

On Thursday, House Republicans passed the $1.5 trillion tax cut seemingly without trouble, although 13 GOP representatives did vote against the bill. The Senate's version of the plan, however, has been met with more opposition.

The Senate is planning to vote on the full resolution after Thanksgiving.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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