Money has been made ala ObamaCare stocks
By Dian Vujovich
When it comes down to money, it really doesn’t matter whether you are a fan of the Affordable Care Act (ACA) or not. Money is money and making it is what investing is all about.
Last week’s Supreme Court ruling in favor of ACA subsides added an extra layer of cement to the already reality of this health-care law that, btw, has been in existence for the past five years. But if politics has somehow clouded your money-making vision and you’ve haven’t been a fan of ObamaCare-related stocks you’ve missed some healthy gains.
Here’s a look at how a few healthcare stocks have performed over the past year, and then year-to-date through June 26, 2015.
First, 52-week performance:
• Here are three hospital/healthcare stocks that have enjoyed a positive bump in price after the Supreme Court ruling: At the close of business on Friday, June 25, 2015, HCA Corp., (HCA), closed at $ 92.84, near its 52-week high. During the past 52 weeks it has traded as low as $53.61 a share.
Tenet Healthcare Corp. (THC) closed at $57.80. Its high for the year was $63.81 and low over that same 52-week period was $ 41.47.
And, Community Health Systems Inc., (CYH), closed at a high of $64.04 per share, $22 higher than its 52-week low of $42.05
• Health insurers have also rallied. Three of them include
the biggest U.S. health insurer, UnitedHealth Group Inc., (UNH). It closed at $123.25 with a 52-week low of $78.74. Humana, (HUM), closed at $195.50 with a 52-week low of $78.74 and Aetna, (AET), closed at $130.05 with a 52-week per share range of $ 71.81 to $134.40.
• According to ZACKS: “The S&P 500 index has gone up 77% since the passing of the bill, United Health Group (UNH), Aetna (AET), Cigna (CI), Humana Inc. (HUM) and Anthem Inc. (ANTM) have outperformed with 292%, 277%, 321%, 332%, and 180% gains, respectively.”
Here are 2015 year-to-date results.
•Bespoke Investment Group reported that the P/E ratio of the S&P 500 has remained around the 18.5 level over the past few months while the Health Care sector now has the highest P/E ratio of any sectors and stands at 24.30.
•Also from Bespoke, five of the best performing health care stocks within the Russell 1000 include Seattle Genetics, (SGEN) up 48.43 percent; Cigna Corp. (CI), up 64.97 percent; Aetna, (AET), up 49.27 percent; Omnicare Inc. (OCR), up 29.66 percent; and Gilead Sciences, ahead 27.55 percent.
• In the mutual fund world, Lipper data year-to-date through June 25 show the top performing sector fund category is Health/Biotechnology Funds. The average fund of the 93 that make up that group was up 18.94 percent. Not far behind it are Global Health/Biotechnology funds up on average 16.11 percent for that group of 43 funds.
Who knows what the future will bring with respect to the performance of health care stocks and funds going forward. But, the long-term trend of improving health care—on any of its fronts— along with the aging of Baby Boomers make this a sector worth keeping your eye on.
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