Hospital stocks have soared in the past year, as investors prepare for the coming implementation of the Affordable Care Act. But will Obamacare's actual arrival deliver the strong results that investors expect?
In the following video with Dan Caplinger, the Fool's director of investment planning and author of the special free report "Everything You Need to Know About Obamacare," Motley Fool health-care bureau chief Max Macaluso discusses hospital stocks and the potential impact the Affordable Care Act could have on them. As Dan notes, HCA Holdings (NYSE: HCA ) and other hospital stocks have posted impressive gains. Much of the optimism centers on expectations that a greater number of insured patients will lead to smaller bad-debt losses for hospitals, improving their bottom lines.
But as Dan and Max discuss, some other factors are helping as well. Tenet Healthcare (NYSE: THC ) announced in June that it will buy out Vanguard Health (UNKNOWN: VHS.DL ) in a $4.3 billion merger, as Tenet hopes to broaden its coverage area and take advantage of potential cost savings and other operating efficiency gains. Community Health Systems (NYSE: CYH ) followed up in July with its $3.9 billion offer for Health Management Associates (UNKNOWN: HMA.DL ) . At the same time, though, some threats loom for hospitals. Max and Dan discuss those potential downsides and give their views on whether hospital stocks have further to run.
Learn more about Obamacare
Hospital stocks are just one of the investing opportunities resulting from Obamacare. In this free report, Dan walks you through these opportunities and the companies that are positioned to exploit them. The informational edge contained in it is invaluable, but it can be exploited profitably only while the rest of the market remains in the dark. To access this free report instantly, simply click here now.
Editor's note: In the video, Dan refers to earlier rumors of a Community Health/HMA deal that preceded the actual buyout offer. He and the Motley Fool regret any misunderstanding.