Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of hospital operators Health Management Associates
So what: The overhaul law expands health care coverage to more than 30 million uninsured Americans and, in turn, allows hospitals to see a much higher volume of patients. And by having more customers paying with insurance, hospitals won't have to worry as much about being stuck with unpaid bills.
Now what: Don't let today's run-up keep you from looking into the space. While hospital stocks have held up relatively well despite all of the recent health care uncertainty, the industry still averages a P/E of roughly 12. When you couple the strong revenue and margin tailwinds that today's ruling brings with the already favorable demographic trend, I'd expect that multiple to expand going forward.