There's tumult in the health-care industry, with many companies poised to profit from new regulations and others on the verge of collapse. This climate makes the industry among the most-watched by investors, and now we're able to determine the individual companies that are garnering the most attention.
People watch stocks for different reasons -- they're waiting for a dip in price, watching for a specific catalyst, gathering all the news and information that might affect stocks they already own, or considering a sell. Regardless, we can take several steps toward understanding market sentiment by seeing who's watching what. With the Fool's free My Watchlist service now 3 months old, we have tens of thousands of people telling us the businesses that have, for whatever reason, piqued their interest.
Looking at the aggregate data, here are the five health-care companies that have earned the most attention in an arena that encompasses providers and services, technology, and equipment and supplies. The third column shows the sentiment (out of five possible stars) in Motley Fool CAPS, our free investing community, and the fourth shows the percentage of people with an eye on the health-care industry in general that are watching each company.
|
Company |
Market Cap |
CAPS Rating |
Percent Watching |
|---|---|---|---|
|
Medco Health Solutions |
$26.3 billion |
**** |
13.9% |
|
UnitedHealth Group |
$39.4 billion |
**** |
13.8% |
|
LabCorp |
$8.93 billion |
***** |
6.3% |
|
Becton, Dickinson |
$19.5 billion |
***** |
5.7% |
|
Ensign Group |
$497.5 million |
**** |
5.4% |
Pharmacy benefit manager Medco and insurance giant UnitedHealth are the clear interest leaders here, and they've also attracted the attention of at least one of our in-house analysts. The Fool's Bryan White feels that those companies are ready to shake off the stagnancy of the health-care arena and reward patience with profits. As he told me, there's been no momentum in the health-care industry for a while, and significant headline risk comes with the territory, but he feels the market will turn bullish within the next couple of years as the effects of health-care reform play out.
UnitedHealth is cheap, and Bryan feels it will handsomely reward investors as the company picks up a healthy share of the roughly 32 million uninsured Americans who will be insured by 2014. Medco earns a much higher margin on each pill it sells when that pill happens to be generic, and a whole bunch of blockbuster drugs are losing their patent protection in 2012. Before then, says Bryan, expect a bit of a sell-off before people pile back in for the big prescription-based gold rush, as he calculates that $90 billion in annual sales will go off-patent over the course of the next seven years.
Whether you're hoping for a lower price, biding your time, or watching to see how health-care legislation plays out, it pays to watch. You can make smarter investing decisions with your own version of My Watchlist, new and free from the Fool. Click below to start following one of the stocks mentioned above:
