A lot of people thought health-care stocks were in trouble because of attacks on Obamacare, or The Patient Protection and Affordable Care Act, but the battle wages on.
The law would be, or will be, one of Obama's crowning achievements of his presidency, his legacy, if you will. But critics claim, among other things, the health-care overhaul would infringe upon basic constitutional rights and interfere with individual liberties.
Health-care industry weighs in
The new law, proposed by President Obama, focuses on a requirement that Americans obtain health insurance or pay a penalty. "The new provision is key to insurance reforms, which would require insurers to accept every possible customers regardless if they arrive with pre-existing medical conditions," explains Debbie Baratz of Value Walk.
Despite this, big health-care companies actually like Obamacare since it guarantees a gigantic new pool of customers. This is why health-care firms, and stock holders, were glued to Tuesday's epic Supreme Court battle.
During the court proceedings, questions asked by the Supreme Court justices over the constitutionality of the individual mandate were met by surprisingly weak answers by the lead lawyer of the Obama Administration. Legal analysts were prepared to consider the battle for Obamacare lost.
Shares of health-care stocks fell sharply in response.
Business section: Investing ideas
But the provision for Obamacare is not dead yet.
"The Supreme Court is not expected to make a decision on the case until June, and any predictions about the outcome are, for the moment, pure speculation," concludes Business Insider's Grace Wyler.
If it does succeed, all the previously dashed and newly renewed hopes will be priced in -- making current pricing seem undervalued.
So, which way do you think this ruling will go? Are you willing to trade on the uncertainty? If so, many analysts suggest looking into managed care. Here are some starting points:
1. Aetna: Operates as a diversified health-care benefits company in the United States.
2. Coventry Health Care (NYSE: CVH): Operates as a managed health care company in the United States.
3. Humana (NYSE: HUM): Offers various health and supplemental benefit plans in the United States.
4. Intuitive Surgical (Nasdaq: ISRG): Designs, manufactures, and markets da Vinci surgical systems for various surgical procedures, including urologic, gynecologic, cardiothoracic, general, and head and neck surgeries.
5. Unitedhealth Group (NYSE: UNH): Provides health care services in the United States.
6. WellPoint (NYSE: WLP): Operates as a health benefits company in the United States.
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 Rebecca Lipman does not own any of the shares mentioned above.
