The latest Barron’s features an article headlined “Five Potential Winners from Obamacare.”
Even as the fight rages in Washington over the rollout of the Affordable Care Act, health-care investors are celebrating an epic run. Fueled by a slew of new drug launches and Obamacare’s promise of new patients, the pharmaceutical and biotechnology sectors have surged, with the Nasdaq Biotechnology index more than doubling in value in two years.
Health-insurance providers have also notched handsome returns, as moderating medical costs have boosted their margins and the expectation of new customers has improved their outlook. The Morgan Stanley Healthcare Payors Index has jumped 73% during the past two years. These index-beating returns pose the question, “Is there any good news not yet reflected in share prices?” The answer is yes, but you have to look in the right places.
In the case of drug makers, the key is to identify the companies selling therapies most needed by the currently uninsured. When considering insurers, investors should focus on those most likely to sign up new patients, even if Republicans succeed in slowing the health-exchanges rollout.
The article goes on to note two drug makers and three health insurers likely to benefit from implementation of the new health care law. Notably absent from the discussion of Obamacare “winners”? Consumers.
