Stocks That Could Rise As Cases Of The Swine Flu Increase (RAD, GENZ, GILD, UTHR, XRAY)

September 3, 2009 4:00 PM EDT
Barclays came out a with a note today on which swine flu stocks to buy and sell based on what happened back in April when the pandemic first broke out

Barclays thought this would be a good time to come out with the note as health officials are preparing for another swine flu break out this fall and winter.

Barclays said "...the broad US markets were not impacted by the outbreak in April with the S&P 500 down about 1% between April 24th and 27th, some subsegments within the U.S. market did see substantial moves."

People cancelled trips and didn't visit affected areas like Mexico. The airlines sector fell 10%, hotels, resorts and cruise lines fell 11%, and airport services slumped 14%. On the positive side, a jump in demand for healthcare services saw that sector gain 2%, while healthcare supplies rose 3%, along with health care facilities.

Using the April moves as their launching point, the Barclays team removed from the pool stocks which might have moved due to other factors such as earnings, company-specific news, or external events such as commodity prices.

Barclays recommends buying drug retailers, such as Rite Aid (NYSE: RAD), Walgreens (NYSE: WAG), and CVS Caremark (NYSE: CVS).

Barclay's said if the pandemic spreads like health officials are predicting "then retailers selling over the counter and prescription medications are likely to gain with the degree of gain being determined by the timing and severity of the epidemic."

Barclays did say one risk for drug retailers is if the outbreak spreads faster than expected, the government could potentially bypass pharmacies and provide medication directly from government reserves.

In the biotech sector, Barclays recommended: Gilead Sciences (Nasdaq: GILD), Amgen Inc. (Nasdaq: AMGN), Genzyme (Nasdaq: GENZ), Biogen (Nasdaq: BIIB), United Therapeutics (Nasdaq: UTHR), Amylin Pharmaceuticals (Nasdaq: AMLN) and Seattle Genetics (Nasdaq: SGEN).

Barclays' also said health care supplies could get a boost from the swine flu. The stocks include: Dentsply International (Nasdaq: XRAY), Inverness Medical Innovations (NYSE: IMA) and Haemonetics Corp. (NYSE: HAE).

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