Buckle-Up Ahead of Elections as Health Care Stocks Take a Ride
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Price: $92.33 --0%
Rating Summary:
6 Buy, 20 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 20
Rating Summary:
6 Buy, 20 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 20
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Analysts are expecting heightened volatility in Health Care stocks over the next three weeks as investors adjust positions to reflect expectations for an Obama or Romney win in the presidential election.
"Given the general view that the Presidential elections will determine the fate of the Affordable Care Act (ACA) -- a key driver of healthcare sector valuations in the last year -- we expect healthcare stocks to trade more on shifting election expectations than fundamentals in the next 3 weeks," said analyst David Windley.
Given that an Obama win will guarantee the survival of the Affordable Care Act, Windley expects Health Care provider stocks to rise 10 percent and Medicaid Managed Care Organization (MCO) to rise 5 percent. A Romney win, on the other hand, may push up diversified MCOs and pressure providers and Medicaid MCOs.
“While we expect an Obama win to boost provider and Medicaid MCO stocks, such a move will fizzle as soon as Congress tackles the "fiscal cliff". A Romney win should drive diversified MCOs higher but this bias will taper off as soon as investors realize that a repeal of the ACA is unlikely,” said analyst David Windley.
The firm is recommending long positions in regulatory safehavens such as the PBMs Express Scripts Holding Company (NASDAQ: ESRX) and Catamaran Corporation (NASDAQ: CTRX) and physician service providers MEDNAX, Inc. (NYSE: MD), IPC The Hospitalist (NASDAQ: IPCM)), US Physical Therapy Inc. (NASDAQ: USPH) at least for the near-term.
"Given the general view that the Presidential elections will determine the fate of the Affordable Care Act (ACA) -- a key driver of healthcare sector valuations in the last year -- we expect healthcare stocks to trade more on shifting election expectations than fundamentals in the next 3 weeks," said analyst David Windley.
Given that an Obama win will guarantee the survival of the Affordable Care Act, Windley expects Health Care provider stocks to rise 10 percent and Medicaid Managed Care Organization (MCO) to rise 5 percent. A Romney win, on the other hand, may push up diversified MCOs and pressure providers and Medicaid MCOs.
“While we expect an Obama win to boost provider and Medicaid MCO stocks, such a move will fizzle as soon as Congress tackles the "fiscal cliff". A Romney win should drive diversified MCOs higher but this bias will taper off as soon as investors realize that a repeal of the ACA is unlikely,” said analyst David Windley.
The firm is recommending long positions in regulatory safehavens such as the PBMs Express Scripts Holding Company (NASDAQ: ESRX) and Catamaran Corporation (NASDAQ: CTRX) and physician service providers MEDNAX, Inc. (NYSE: MD), IPC The Hospitalist (NASDAQ: IPCM)), US Physical Therapy Inc. (NASDAQ: USPH) at least for the near-term.
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