Our life expectancy is a sensitive piece of guesswork, and an important factor for the future sustainability of health care. Our economy depends on it.
In 1840, the record life expectancy went to Swedish women, who averaged a whopping 45 years. (Women, by the way, have a greater life expectancy than men by 5-7 years.) Compare that statistic with the prediction that, "by 2070 female life expectancy in the U.S. will be between 92.5 and 101.5 years, which substantially exceeds the forecast of 83.9 years made by the Social Security Administration in 1999."
What's led to this great change in expectation? There are several factors at play, but we can accept that a lesser prevalence of chronic diseases and disabilities is a large contributor. And with increasing breakthroughs in medicine and genetic engineering, we have to ask ourselves if the current life expectancy is still too low.
While the thought of living well into our 100s may be interesting, it may also be very expensive. "The principal factor driving growth in expenditures on health care is demand. As people get richer, they want to spend a larger share of their income on improving their health," says Bloomberg.
Yet "expensive" may mean "profits" for many large health-care service companies.
To help you analyze how the increase in life expectancy and future trends in health care may translate to the market, we list a few of the biggest health-care sector stocks below. Additionally, the stocks below have been experiencing significant increases in institutional buying-a bullish signal that Big Money believes there is more upside to these names.
What do you think? Will a generation of centenarians boost the profits of these companies? Use this list as a starting point for your own analysis.
List sorted by institutional buying as a percentage of shares float. (Click here for free, interactive tools to analyze this list of stocks.)
3. Quidel Corp.
6. Quest Diagnostics
7. Ironwood Pharmaceuticals
8. Questcor Pharmaceuticals
9. Opko Health
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Becca Lipman does not own any of the shares mentioned above.
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