Health Care
Health care facilities equities may become the odd man out in the overall health care sector bull market. While we are not concerned that hospitals will see a drop off in activity levels, slowing revenue growth may constrain incremental valuation expansion. Hospital procedures are labor-…
A gap has opened between the Nasdaq and S&P biotech indices, suggesting broad-based selling has reached a stage where discrimination is occurring. The former is infused with concept stage companies with no revenue or earnings, while the latter comprises more mature, pharmaceutical-type firms…
The health care sector is poised to resume its bull market, but the character of the rally will change. Sell hospitals and buy biotech.
The health care sector is slowly reclaiming ground lost on the back of the dip in the U.S. dollar and temporary rebound in inflation expectations (second panel). We expect this rebound to gather pace. Now that both the currency and inflation expectations are headed in a direction that suggests…
The previous Insight showed that broad macro conditions point to a reduction in managed care risk premiums. This outlook brightens further when considering recent cost inflation trends. The latest inflation reports showed that the cost of physician services is growing at a slower rate, and the…
Health insurance equities are on the cusp of breaking out to new all-time highs relative to the broad market, despite the headwinds facing any net creditor, namely low running yields. The macro tide is turning decisively in favor of this non-cyclical group. The S&P managed care index…
The latest conclusions from the sector-based (right) way to pick stock markets. Plus some important conclusions for credit markets.
Stocks whipsawed violently last week. Volatility could intensify if recent whiffs of a domestic economic slowdown proliferate and the Fed still adopts a more hawkish tone.
Pharmaceutical stocks are trading at historically cheap relative valuations on the back of political pressure on a few high-profile specialty pharma companies. We see this as an opportunity to add to positions in the more traditional pharma space. Our concerns about excessive drug pricing will…
A spate of mergers in the medical equipment space has helped propel relative performance to new cyclical highs. In our latest update, we noted our expectation for another upleg, but some niggling concerns about the future revenue outlook caused us to put the group on downgrade alert. However,…