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Healthcare Stocks


The worst performing stocks of 2016 to date are in the healthcare sector. The S&P 500 is up 2%. Health care is down 7.7%. While nobody knows for sure who will win Tuesday’s presidential election, many believe health care will suffer no matter the outcome.

Others suggest that it would take almost a one-party sweep of the presidency and Congress to cause any real pain. They suggest the doom and gloom has been overblown.

Related: MORE THAN HALF OF GLOBAL DEALMAKERS STILL BELIEVE TRUMP WOULD BE BAD FOR M&A

Areas Showing Positive Signs

With some saying now is the time to sell health care, others look for a silver lining and to the surprise of many, are finding it.

For example, defensive stocks such as Johnson & Johnson (NYSE:JNJC) and Merck & Co. (NYSE:MRKC) are up more than 11%. The life-and-health-insurance subsector of the S&P 500 is up 5% so far this year.

Large health care companies offer yield and are trading at 19.1 times earnings. This is in line with the overall index. This is also a reduction from the 22.5 PE ratio from a year ago.

Health Care Winners If Trump Is Triumphant 

While overall chances of a Trump victory Tuesday are still less than those of a Clinton win, it is not outside the realm of possibility that Donald Trump could be the next president of the United States.

If Trump does win, 3 stocks have been named as potential winners along with the Donald. They are Celgene Corp. (NASDAQ:CELGC), Ligand Pharmaceuticals Inc. (NASDAQ:LGNDC) and UnitedHealth Group Inc. (NYSE:UNHB).

Celegene is down 14% year to date but could fare well under Trump since he would likely not push to lower the exclusivity period for biologics as Clinton has threatened to do. Ligand, which licenses its technology to other companies – many in biotech – could come out ahead under Trump for the same reason as Celegene.

As for United, as the largest health insurer in the country, UNH stands to benefit greatly from Trump’s promise to allow health insurers to sell across state lines. Other Trump and Republican proposals, including allowing people to fully deduct health insurance premiums would also be helpful to United health care.

Related: FIVE FAV PHARMAS UNDER FIVE

Stocks To Snap Up If Clinton Clinches

Given Clinton’s stand on health care and biotech, it might seem reasonable to avoid health care all-together in the event she wins the U.S. presidential election. There are those who would beg to differ.

Zacks specifically names AngioDynamics Inc. (NASDAQ:ANGOC), WellCare Health Plans, Inc. (NYSE:WCGC) and Boston Scientific Corp. (NYSE:BSXC) as among potential picks in the event of a Clinton presidency.

Reasons are based primarily on expected earnings growth. For example, ANGO has expected earnings growth of 12.9% for the year and improved greatly in October. WCG has earnings growth of 46.2% and Boston Scientific has shown earnings growth of 18.3%.



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