Uncertainty is rarely healthy for investors' portfolios. The fear that accompanies that uncertainty usually weighs on stock prices until it's dispelled by greater clarity.
For health care investors, with the exception of a few biotech stocks with upcoming binary events -- drug approvals and the like -- there may be no greater unknown today than the final shape of health-care reform legislation.
Many companies will eventually be affected by health care reform, but health insurers seem to be taking the brunt of the pain. These usually staid stocks have turned into roller coasters along the lines of Citigroup
|
Company |
Low price in 2009 |
High price in 2009 |
Gap Between Low and High |
|---|---|---|---|
|
UnitedHealth Group |
$16.18 |
$ 30.25 |
87% |
|
WellPoint |
$29.32 |
$55.73 |
90% |
|
Aetna |
$18.66 |
$34.87 |
87% |
|
Cigna |
$12.68 |
$30.63 |
142% |
|
Humana |
$18.57 |
$46.01 |
148% |
Source: Yahoo! Finance.
Okay, maybe those swings aren't as big as Citigroup's 682% low-to-high gap this year, but they're certainly a lot bigger than the S&P 500's 56% gap.
The extreme highs and lows for these companies are likely only to continue until Washington has made up its mind on what the healthcare reform bill will look like.
When will that happen? That's what we'd all like to know. Take our poll and let us know what you think of health reform in the comment box below.
