Health Care
Health care equipment stocks are pulling back, but this is a correction from overbought levels rather than a trend change. Profit margin prospects remain upbeat. The surge in consumer spending at hospitals has encouraged an expansionist mindset, as highlighted by the surge in health care…
The budding recovery in the S&P biotech index is likely to gather steam. Big pharma is desperate to replenish its drug pipeline, putting biotech equities back into play following a drawn out de-rating phase. This phenomenon is not limited to U.S. pharmaceutical companies, as European and…
Health care equipment stocks are overbought relative to the broad market, and a corrective pullback is inevitable. We had been concerned that the latest leg up might represent the final outperformance phase for this group, given rising wage inflation and a cooling in revenue growth indicators,…
Shift to a small vs. large cap bias as a stealth way to play the overall equity market overshoot. The oversold bounce in banks is not worth chasing, and buy dips in medical equipment stocks.
The odds of an inflation "mini-scare" are rising, although deflationary tail risks from abroad cannot be dismissed.
With the broad market breaking out to new highs courtesy of flush liquidity conditions and rising risk appetite, the momentum-driven biotech group stands an excellent change of reclaiming previous relative performance highs. We upgraded the S&P biotech index to overweight a month ago because…
In successful investment analysis "less is more, and usually much more effective."
The S&P health care sector's diagnosis is encouraging, as there has been improvement on a number of fronts. Recent profit reports signal that top line growth is recovering smartly at a time when industry selling prices remain resilient. Bellwether JNJ's robust guidance may foretell of a…
Our <i>Cyclical Indicator Update</i> reveals that a defensive portfolio strategy remains the best bet to navigate the crosscurrents of stagnant profit/economic growth yet abundant global liquidity.
The combination of biotech stabilization and a health care facilities plateau argues for profit taking in our long/short trade between the two groups. We had exploited the valuation mismatch because hospital profit prospects were far superior to those of the biotech group, especially within the…