IBJNews

Wall Street likes wobble on health reform

Back to TopCommentsE-mailPrintBookmark and Share

With the stunning victory of Republican Scott Brown in the Massachusetts election for U.S. Senate, Wall Street analysts expect to see a bump in health care stocks.

Health insurers, such as Indianapolis-based WellPoint Inc., and medical device companies, such as Warsaw-based Zimmer Holdings Inc., could benefit most, according to TradersHuddle.com.

That’s because the health care reform bills pending in Congress would lay $8.7 billion a year in taxes on those industries, as well as lay numerous regulations on insurers. Brown gives Republicans a 41st vote in the Senate, meaning the party could successfully filibuster Democratic proposals.

The stocks of WellPoint and Zimmer, along with their peers, rose Tuesday on expectations of Brown's victory. But analysts are expecting even more now that he has won.

Health insurance stocks rallied, Roy Blumberg, director of client portfolio management at The Philadelphia Group, told MarketWatch, because many traders think "less government in the health care area probably is better for all of us in the long run, and that's the vote you're seeing right now."

If health care reform does not pass, however, insurers would lose out on Congress’ requirement for all Americans to buy health insurance and a plan to spend $30 billion-$45 billion a year in taxpayer-funded subsidies to help low-income people do so.

Les Funtleyder, a health care stock analyst at Miller Tabak & Co. in New York, called Brown’s victory “Shakespearian” and predicted a “run” on health care stocks.

“The health care reform effort could be stymied if the House and Senate are unable to reach an agreement before the senator is seated,” Funtleyder wrote in a note to investors.

Even if Martha Coakley had won a narrow victory, Funtleyder foresaw a pullback by President Obama on his broad policy goals. He wrote, “The entire administration agenda including health care (which was quite broad to begin with) will be reduced in scope and that this will read through positively to health care stocks.”

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

ADVERTISEMENT