6 Executive Insiders Expecting a Health-Care Rally

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Until recently, health care was considered to be a relatively safe investing bet. But with the economy continuing to struggle, not to mention the passage of the health-care bill, the sector's expecting a lot of near-term volatility.

Health-care companies will soon have to grapple with the consequences of the legislation; and according to FAF Advisors analyst Tim Nelson, "Increased regulatory requirements mean less innovation, less differentiation and more pricing pressure for the foreseeable future." And while reform will almost certainly bring with it an enormous wave of new customers, the influx won't actually happen for another couple of years.

In the meantime, consumers looking to cut costs are scaling back on products and services heretofore considered essential. And the effects are palpable -- the health care index has lagged the S&P 500 index over recent months.

And with a record-breaking wave of major pharmaceutical patents set to expire in 2011 and 2012, companies are going to face a ton of tough competition from cheaper generic competitors -- meaning that the potential effect on sales could be devastating.

Then again, given the Republican sweep of Congress, there may very well be enough gridlock to stall any major regulatory moves. So health-care companies may have at least a brief reprieve. But eventually, they're going to have to adapt if they want to match the earnings and revenues they're seen in the past.

But are things really as dire for the sector as analysts predict? To find out, we looked at the trades of insider executives, to see what they thought of the current business climate for the health-care industry.

Because if they think their own companies are up for the challenge, it's an indication that their hopes are high for the sector -- and since they know more about the industry than anyone else, we're inclined to use their bullishness as a starting point for some analysis ...

Here is a list of six health care companies that are being snapped up by insiders. (Click here to analyze the health-care stocks mentioned in this article.)

Data sourced from AOL Money. The list has been sorted alphabetically.



Insider Transactions

Boston Scientific (NYSE: BSX  )

Medical Instruments & Supplies

Ernest Mario (Director) bought $64,393 worth of stock on 11/4

Covidien   (NYSE: COV  )

Medical Instruments & Supplies

Insiders like Richard Meelia (CEO), Richard Brown (Officer), and Charles Dockendorff (CFO) collectively bought $739,425 between 8/4-8/19

Covance (NYSE: CVD  )

Medical Laboratories & Research

Insiders like William Klitgaard (Officer) and Joseph Herring (CEO) collectively bought $875,405 worth of stock on 8/2

Intuitive Surgical (Nasdaq: ISRG  )

Medical Appliances & Equipment

Amal Johnson (Director) bought $281,054 worth of stock on 9/13

Tenet Healthcare (NYSE: THC  )


Ronald Rittenmeyer (Director) bought $224,644 worth of stock on 8/10

Thermo Fisher Scientific (NYSE: TMO  )

Medical Instruments & Supplies

Insiders like Gregory Herrema (Officer) and Marc Casper (CEO) collectively bought $325,658 worth of stock between 8/5-8/19

Interactive Chart: Press Play to see how market caps have changed for all the stocks mentioned above.

Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

Covidien and Thermo Fisher Scientific are Motley Fool Inside Value selections. Intuitive Surgical is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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10/28/2016 12:11 PM
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