Post-Bill Healthcare Checkup: One Month Later (HMA, THC, CYH, MRK, SNY, ABT, GSK, AZN, RAD, CVS, UNH, HUM, HNT)

Tickerspy’s Hospital Index

HOSPITAL INVESTING IDEAS

• Popular long ideas: THC, HMA, UHS
• Popular short ideas: THC, HMA
• Top dividend plays: SEM, UHS
• Pro favorites: HCA, THC, CYH

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HOSPITAL COVERAGE

Hospitals provide patient treatment with specialised staff and equipment

• Healthcare Stocks in Focus as Judge Scrutinizes Obamacare (HMA, CYH, THC, UNH, WLP, AET, CI)
• Hospital Stocks Soaring On M&A Activity (CYH, THC, HMA, LPNT)
• Hospital Shares Rally On Sparse News (CYH, THC, HMA)

HOSPITAL CHART

HOSPITAL METRICS

Avg. Market Cap:	$4.5B
Avg. P/E Ratio:	15.8
Avg. Div Yield:	0.6%

A month ago we covered the broad-based healthcare rally that ensued following the passing of President Obama’s healthcare reform bill, and while stocks have largely hung on to gains ever since, many sub-sectors have fallen short of the S&P 500 for the period. The knee-jerk rally upon the bill’s passing was at least partially credited to the end of political uncertainty after months of debates in Washington and related speculation on Wall Street. However, it was the potential impact of coverage for the 32 million uninsured Americans that sent Health Management Associates (HMA), Tenet Healthcare (THC), Community Health Systems (CYH), and the rest of the Hospital Stocks Index higher.

The Hospital Stocks Index and 12 more of tickerspy’s 32 healthcare sub-sector stock Indexes have outperformed the S&P 500 in the month since the bill was passed. Meanwhile, some major players are among laggards.

Recent slides by Merck (MRK), Sanofi-Aventis (SNY), and Abbott Laboratories (ABT) have weighed on the pharmaceutical sector over the last month. All three have lost more than -3% for the period amid a broad market rally. Peers GlaxoSmithKline (GSK) and AstraZeneca (AZN) are among the sector’s winners over the past month, but the Big Pharmaceutical Stocks Index has lagged the S&P 500 by -4.5% for the period.

Meanwhile, Rite Aid (RAD) has weighed on the drug store and pharmacy sector over the last month, and CVS Caremark (CVS) is the only component to outperform the S&P. Insurers UnitedHealth (UNH), Humana (HUM), and Health Net (HNT) have all slipped by double-digits since the reform bill was passed, though much of the sector is in positive territory for the period.

It will be interesting to see how the various healthcare sectors perform as the impact of the Obama bill starts to set in. Investors can track 32 proprietary healthcare Indexes for performance trends and a suite of other metrics at tickerspy.com.

Tags: ABT, AZN, CVS, CYH, GSK, HMA, HNT, HUM, MRK, RAD, SNY, THC, UNH