There are rumbling right now in the healthcare industry. Everyone knows the liberals are out to get them. They also know that conservatives will have to go along with some kind of reform, even if it’s not necessarily what liberals want.
That means changes are coming for this industry one way or another. That also means there will be good stocks to buy and ones to sell in this sector. Keep abreast with the latest so you have an idea of who the winners and losers will be in this race.
At the moment, the rest of the healthcare industry is ganging up the pharmaceuticals. The Super Committee in Congress is deciding where to make cuts. I guess in this game, the drug makers are easy targets for the other parties like hospitals and doctor’s associations. Watch for the name brand drug stocks like Merck and Glaxo to take hits on this rumor.
It might also be a good time to keep an eye on generic drug makers. These stocks have the potential of being good buys if Congress passes legislation that allows these companies to make generic versions of popular drugs sooner than they are allowed to now. I think this will eventually happen in an effort to bring down healthcare costs.
Best Stocks to Buy – Healthcare Sector
The healthcare sector will be one of the best growth plays. It always has been. Personal health is something that is important to anyone. The only restriction on growth is if economic conditions remain tough. Otherwise, it will offer consistent growth.
Even when the stock market as a whole declines, healthcare stocks continue to rise. Take today for example. While the broader market lost around 1% today, healthcare stocks rose 1%. That is a two point spread.
The stocks to buy in this sector are those that develop groundbreaking technologies. Pharmaceuticals can be tough because they have to have a breakthrough drug to make money. And even then, patents run out after 50 years, greatly diminishing long term cash flows.
Medical software is a good place to start. Most clinics, even in developing countries, do not have great electronic record keeping systems. The software companies that can come up with an integrated solution for this will be the winners.
I would also invest in stocks of medical software companies that do tablet applications. Things like iPads are increasingly being used by doctors and nurses in lieu of paper records.
Sector Categories for Stocks to Buy
Here is a basic description of each sector and how it affects stock market investing. The lines between certain sectors are sometimes blurred, but they are categorized in this manner. It’s important to get a sense of what each mean for your investing strategies.
Some investors focus on individual sectors to find stocks to buy. They do this because they have a background in a certain area that gives them special insight on how the business works. Other times, they have contacts in those industries that can give him an indication of what is happening in their field.
Companies that deal with basic materials find raw materials and process them for production. These would be mining and oil companies. It would also include companies that produce chemicals and materials for building.
Then you have the consumer goods sector. These companies produce and/or distribute end products for consumption. These would be companies like Hormel or Wal-mart.
The other sectors where you can find stocks to buy are the financial, healthcare, industrial goods, services, and technology and utilities sectors. Each has their own unique place in the business cycle. They also tend to affect one another.
Illumina Stock Jumps 39% on Roche Takeover Bid
Illumina (ILMN) stock gained almost 40 points 1 hour into trading on Wednesday morning. This happened on news that Roche was trying to take it over and buy it for $5.7 billion. Illumina is a diagnostic healthcare technology company that does gene sequencing.
If you want to learn how to invest in stocks based on major news, you should definitely watch this stock. The takeover has not happened yet, but just the bid alone sent shares into the sky.
If this takeover does happen, Roche could create a lot of synergy with Illumina that might boost both bottom lines. That would be good for investors in either stock.
Illumina is already doing well on its own. Their sales have been rising for the past few year at least. There are at $1 billion in yearly sales. Their net income is positive $124 million as of 1/2/2011 reporting year.
Many times, when there are major news breaks like this, stock traders will push the price up only to take profit at the end of the day or week. So watch out for the traders who are looking for a short term binge.
Natural Healthcare Stocks – Reliv International
Reliv is a company that makes vitamins and other nutritional supplements. They also have a line of skin care products and other foods. There is rising interest in natural management of healthcare. People are starting to veer away from westernized medicine to solve all of their ailments and health issues. They are looking to a more natural and holistic approach to being healthy. These are one of the companies that stand to benefit from this trend.
Remember that the good stocks in this market will have a history of performance and financial strength. In light of that, we should look at the fundamentals of this stock and see if it is worth pursuing as an investment.
Looking at their financials, they are making money. There are many companies that trade on the US stock exchanges that don’t make money. Yet, investors still want to buy those stocks. Unless I see a megatrend coming, I generally like to see some profitability before even considering a stock to buy. My stock investment strategies are usually built around companies that are fundamentally strong.
At first glance, this company is making money. Their net income was $2.5 million in 2009 and 1.7 million in 2010. That is a good sign. They are profitable.
But one major thing to note is that both sales and net income went down over that period. That is a concern. That means they are losing market share in an otherwise healthy and growing market. My initial guess is that they are facing tougher competition. It’s a very competitive and saturated market.
Sales declined by almost 8 percent. Net profit declined almost 30 percent. You really have to watch these figures if you are going to invest in this stock.
Their debt position is relatively strong. Their debt to equity ratio is at .78, while the rest of the industry is at 1.88. In addition, they have enough cash flow to pay their current bills. That is important for a company to stay afloat in the short term.
Life Insurance Settlement for Seniors
If you are a senior and don’t need your life policy, for goodness sakes, don’t turn it into your insurance carrier for the cash value. Instead sell your policy to an investor in what is called life insurance settlement. This is where you sell your policy for greater than the cash value but less than the face value.
So the investor will give you a lump sum of $500K on a $1 million policy. He keeps paying the small premiums every month. Then when you die, he get’s the $1 million and has just doubled his money. But on the other had, you get $500K right away to spend on your retirement how you would like. Don’t worry, you won’t miss the other $500K when you’re in the ground.
It’s been a solution that has enabled many to have a better retirement. In many cases, it has saved lives as medical and healthcare costs go up.
About the Author
David Jones
Marketing Associate
Claire Dental Centre
625 B Belmont St, New Westminster, BC
V3M 5Z8
604-777-8880
