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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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