Health care industry update As of October 10 2007
There has been a lot of activity in the broad market for the healthcare industry. Many of the top stories have to do with international markets. Many analysts remain bullish on the industry has a whole, as they expect it to continue double digit growth in many areas.
Ruppe Appreciation on HealthCare costs
The appreciation of the rupee is hurting the exports for the Health Care sector in India causing many of their goods and services to become overpriced in relation to the dollar.
IPO
Highlands Acquisition Corp announced today that it has completed its initial public offering of 12,000,000 units. Each unit consists of one share of common stock and one warrant, which entitles the holder to purchase one share of common stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $120,000,000 to the Company.
Look who they are targeting…..
Highlands Acquisition Corp. is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, stock purchase, asset acquisition or other similar business combination with one or more operating businesses. The Company initially intends to focus its search for a target business in the healthcare industry.
Chinas role
Chinas pharmaceutical industry is expected to grow by 18% by 2010.
Recently Zhejiang Huahai Pharmaceutical Co., the Chinese drug maker that won FDA approval. Look for a trend of China having a larger role in the industry.
Pfizer As part of a broad effort to invigorate its pipeline and move more aggressively into biotechnology, Pfizer Inc. announced Thursday a new division dedicated to developing biotherapeutic drugs and research technologies.
Wal-Mart
Wal- Mart announces that they will expand their prescription drug program. They will include three fertility and prescription birth control medications, along with medicines for glaucoma, attention deficit disorder, fungal infections, acne, and more.
Wyeth Eyes Japan
Wyeth seeking approval to launch new pneumonia drug and osteoporosis drug in Japan, as part of its effort to raise sales in Japan to $1 billion by 2010, nearly double that of 2006.
Merck approved to test HIV products
FDA releases its review of Isentress ahead of a panel meeting and finds that any negative side effects from the HIV drug aren't enough to keep it off the market.
Health care plan costs
Employers' health-insurance premiums up 6.1% in 2007, the slowest annual growth rate since 1999 but still outstripping gains in workers' earnings and general inflation.
Wednesday, October 10, 2007
Tuesday, October 9, 2007
MMM Economic Outlook
MMM Economic Outlook 10/10/07
Seven weeks ago markets were down across the board because in times a high volatility (like now) markets become highly correlated. As of today markets are back on top after news that the credit crunch was soon to be behind us. The S&P 500 set a new high on Friday and the DOW is back above 14,000. Resources, Industrials and Technology have led since august lows. Gold hit a new 27 year high last week. All commodities are down beginning the week of 10/8; oil, copper, gold are down causing the shares to fall of several companies connected to these commodities. Year to date, commodities across the board are strong. According to RBC Capital markets, “Commodity strength is likely reflecting more than just US dollar weakness, and that it is consistent with the containment of credit market risks to global growth.” According to Allan Greenspan, if the dollar becomes weak (problematic) then there would be an acceleration in inflation. Recession is the word on everyone’s mind. According to Gene Epstein of Barron’s, “…A recession has less than a 20% chance of occurring… The weaknesses in housing and consumer expectations are both clearly voting thumbs-down. But the two employment indicators and the stock market are holding up pretty well. And more crucially, the real rate on federal funds is relatively accommodative in historical terms”
-The Commerce Department reported that orders to factories dropped 3.3%, lowest in 7 months. (Durable goods down 4.9%, non-durable goods down 1.6%, Autos down 8.5%)
-Jobs created in August originally reported a loss of 4000 but was revised to a gain of 89,000 and 110,000 in September. ( in line with estimates)
***The fed would more likely cut rates if job creation numbers fall short. Therefore, the stock market would react more favorably if the numbers fall short.
-The dollar has touched new lows against the Looney, Euro, Pound, and Yen in the past week.
As our national research source says, “While the risk of recession increased during the August financial panic, our estimates suggest that it has declined noticeably in the wake of the Fed’s September interest rate reduction.” They further note that since 1950, the economy has been in a state of recession only 13% of the time; in the past 20 years, that figure drops to only 6% of the time. In the past 20 years, market crises clearly have greatly outnumbered the number of recessions predicted by them. Of the last 11 market crises, the market resumed an uptrend on all but two occasions. Recessions tend to share common traits we believe remain largely absent today: Unemployment rises (absent today); Stock prices fall (we’re back to old highs); Yield curve inverts (it’s resuming a more normal shape now); Consumer confidence declines (okay, we’ve got that one
present). This 12-month model, designed by our national research source, shows a 13% current chance of a recession, compared with a 25% chance in prior to September. And—this recent recession panic was not the year’s high point—that was reached in March (when it rose to a 36% chance of a recession) as jobless claims rose, energy prices surge, and the yield curve inversion deepened (RBC).
Seven weeks ago markets were down across the board because in times a high volatility (like now) markets become highly correlated. As of today markets are back on top after news that the credit crunch was soon to be behind us. The S&P 500 set a new high on Friday and the DOW is back above 14,000. Resources, Industrials and Technology have led since august lows. Gold hit a new 27 year high last week. All commodities are down beginning the week of 10/8; oil, copper, gold are down causing the shares to fall of several companies connected to these commodities. Year to date, commodities across the board are strong. According to RBC Capital markets, “Commodity strength is likely reflecting more than just US dollar weakness, and that it is consistent with the containment of credit market risks to global growth.” According to Allan Greenspan, if the dollar becomes weak (problematic) then there would be an acceleration in inflation. Recession is the word on everyone’s mind. According to Gene Epstein of Barron’s, “…A recession has less than a 20% chance of occurring… The weaknesses in housing and consumer expectations are both clearly voting thumbs-down. But the two employment indicators and the stock market are holding up pretty well. And more crucially, the real rate on federal funds is relatively accommodative in historical terms”
-The Commerce Department reported that orders to factories dropped 3.3%, lowest in 7 months. (Durable goods down 4.9%, non-durable goods down 1.6%, Autos down 8.5%)
-Jobs created in August originally reported a loss of 4000 but was revised to a gain of 89,000 and 110,000 in September. ( in line with estimates)
***The fed would more likely cut rates if job creation numbers fall short. Therefore, the stock market would react more favorably if the numbers fall short.
-The dollar has touched new lows against the Looney, Euro, Pound, and Yen in the past week.
As our national research source says, “While the risk of recession increased during the August financial panic, our estimates suggest that it has declined noticeably in the wake of the Fed’s September interest rate reduction.” They further note that since 1950, the economy has been in a state of recession only 13% of the time; in the past 20 years, that figure drops to only 6% of the time. In the past 20 years, market crises clearly have greatly outnumbered the number of recessions predicted by them. Of the last 11 market crises, the market resumed an uptrend on all but two occasions. Recessions tend to share common traits we believe remain largely absent today: Unemployment rises (absent today); Stock prices fall (we’re back to old highs); Yield curve inverts (it’s resuming a more normal shape now); Consumer confidence declines (okay, we’ve got that one
present). This 12-month model, designed by our national research source, shows a 13% current chance of a recession, compared with a 25% chance in prior to September. And—this recent recession panic was not the year’s high point—that was reached in March (when it rose to a 36% chance of a recession) as jobless claims rose, energy prices surge, and the yield curve inversion deepened (RBC).
Wednesday, September 12, 2007
Consumer Goods- Hansens
Hansens-HANS $48.30
Many institutions including G. Sachs upgraded the beverage sector to attractive.
Judy E. Hong (G.S.) “judging by current spot prices, most major commodities that are needed to make and bottle beverages -- aluminum, resin, oranges and corn -- will be flat or down into 2008.”
In an industry that will prosper HANS has exceptional leadership:
Management Effectiveness (TTM)
Return on Assets
29.74%
Return on Equity
42.97%
Return on Inves. Capital
39.48%
The Return on Equity for HANS shows that it is able to reinvest its earnings more efficiently than 100% of its competitors in the Beverages (Nonalcoholic) industry. Typically, companies that have higher return on equity values are more attractive to investors.
Hansens has direct store delivery and warehouse delivery of their products which include:
Natural alternative beverages catering to those who are looking for ‘functional’ refreshment beverages with a purpose. Their lines include energy drinks, vitamin drinks, sports drinks and other natural more consciencious drinks for the consumer.
Coca Cola is also a good buy but a little more expensive with < op. margins and ROE.
Profitability (TTM)
Gross Margin
52.19%
Operating Margin
23.13%
EBITDA Margin
23.38%
Profit Margin
14.47%
HANS's Gross Margin is more than 83% of other companies in the Beverages (Nonalcoholic) industry, which means it has more cash to spend on business operations as compared to its peers. As indicated by the Operating Margin, HANS controls its costs and expenses better than 97% of its peers.
HANS boasts approval by Warren Buffet today, with a 97% 5 year EPS growth.
- which explains the P/E of 44.
- Highest ROIC in the sector
- International presence including Asia
- Quarterly revenue growth is 42% above the industry!!!
- Jones Soda is closest competitor but behind by a long shot.
- Alpha = 0.21
- Beta = 1.15
- Short interest = 8.49% as a % of float
DIRECT COMPETITOR COMPARISON
HANS
JSDA
PEP
Pvt1
Industry
Market Cap:
4.42B
232.26M
113.02B
N/A
2.15B
Qtrly Rev Growth (yoy):
56.90%
29.80%
10.20%
N/A
14.30%
Revenue (ttm):
740.61M
42.45M
36.66B
N/A
1.77B
Gross Margin (ttm):
52.19%
38.50%
54.82%
N/A
43.70%
EBITDA (ttm):
182.05M
2.32M
8.16B
N/A
253.01M
Oper Margins (ttm):
23.13%
2.23%
18.44%
N/A
6.10%
Net Income (ttm):
107.17M
2.36M
5.96B
N/A
2.36M
EPS (ttm):
1.089
0.090
3.565
N/A
0.09
P/E (ttm):
44.55
98.77
19.62
N/A
21.97
PEG (5 yr expected):
0.89
3.51
1.88
N/A
2.27
P/S (ttm):
5.80
5.42
3.08
N/A
1.51
-
Overall analyst consensus is buy-strong buy with a high target of $62.00.
Many institutions including G. Sachs upgraded the beverage sector to attractive.
Judy E. Hong (G.S.) “judging by current spot prices, most major commodities that are needed to make and bottle beverages -- aluminum, resin, oranges and corn -- will be flat or down into 2008.”
In an industry that will prosper HANS has exceptional leadership:
Management Effectiveness (TTM)
Return on Assets
29.74%
Return on Equity
42.97%
Return on Inves. Capital
39.48%
The Return on Equity for HANS shows that it is able to reinvest its earnings more efficiently than 100% of its competitors in the Beverages (Nonalcoholic) industry. Typically, companies that have higher return on equity values are more attractive to investors.
Hansens has direct store delivery and warehouse delivery of their products which include:
Natural alternative beverages catering to those who are looking for ‘functional’ refreshment beverages with a purpose. Their lines include energy drinks, vitamin drinks, sports drinks and other natural more consciencious drinks for the consumer.
Coca Cola is also a good buy but a little more expensive with < op. margins and ROE.
Profitability (TTM)
Gross Margin
52.19%
Operating Margin
23.13%
EBITDA Margin
23.38%
Profit Margin
14.47%
HANS's Gross Margin is more than 83% of other companies in the Beverages (Nonalcoholic) industry, which means it has more cash to spend on business operations as compared to its peers. As indicated by the Operating Margin, HANS controls its costs and expenses better than 97% of its peers.
HANS boasts approval by Warren Buffet today, with a 97% 5 year EPS growth.
- which explains the P/E of 44.
- Highest ROIC in the sector
- International presence including Asia
- Quarterly revenue growth is 42% above the industry!!!
- Jones Soda is closest competitor but behind by a long shot.
- Alpha = 0.21
- Beta = 1.15
- Short interest = 8.49% as a % of float
DIRECT COMPETITOR COMPARISON
HANS
JSDA
PEP
Pvt1
Industry
Market Cap:
4.42B
232.26M
113.02B
N/A
2.15B
Qtrly Rev Growth (yoy):
56.90%
29.80%
10.20%
N/A
14.30%
Revenue (ttm):
740.61M
42.45M
36.66B
N/A
1.77B
Gross Margin (ttm):
52.19%
38.50%
54.82%
N/A
43.70%
EBITDA (ttm):
182.05M
2.32M
8.16B
N/A
253.01M
Oper Margins (ttm):
23.13%
2.23%
18.44%
N/A
6.10%
Net Income (ttm):
107.17M
2.36M
5.96B
N/A
2.36M
EPS (ttm):
1.089
0.090
3.565
N/A
0.09
P/E (ttm):
44.55
98.77
19.62
N/A
21.97
PEG (5 yr expected):
0.89
3.51
1.88
N/A
2.27
P/S (ttm):
5.80
5.42
3.08
N/A
1.51
-
Overall analyst consensus is buy-strong buy with a high target of $62.00.
Saturday, August 4, 2007
UNH
Update on UNH:
Since purchasing UNH a couple months back the stock has not done to much for our portfolio, however, now may be a good time to add to it rather than divesting our ownership. It has been well over ayear since the revelation of the stock options scandal forced UNH to restate 13 years worth of earnings, and make many management changes at crucial high level positions.
The stock is up over 25% since May of 2006, but still well below its record high of 65 in late 2005. It is currently trading at 16 times next years expected earnings, which is well below the majority of their competitors. Compounding the low forward P/E ratio is the fact that its long term earns growth rate is estimated at 16% a year, much higher than many if their competitors.
UNH has been successful by focusing on three distinct business segments: Selling health insurance, offering private Medicare plans, and providing technology to companies to help control costs.
This technology aspect will continue to grow in importance over time. Just recently UNH played a huge role in highlighting the risks of the arthritis drug vioxx. UNH was able to track client data and show a correlation between the increased health risks of taking the drug.
While there still may be some side effects from the options back dating scandals which occurred, with pending litigation still awaiting trial. Some analysts, such as Thomas Caroll, say that the fallout will not make a significant impact on future earnings.
While the stock has not done much for us, this is a solid stock, in a solid industry, with good long term growth prospects.
Dave Seaton
Since purchasing UNH a couple months back the stock has not done to much for our portfolio, however, now may be a good time to add to it rather than divesting our ownership. It has been well over ayear since the revelation of the stock options scandal forced UNH to restate 13 years worth of earnings, and make many management changes at crucial high level positions.
The stock is up over 25% since May of 2006, but still well below its record high of 65 in late 2005. It is currently trading at 16 times next years expected earnings, which is well below the majority of their competitors. Compounding the low forward P/E ratio is the fact that its long term earns growth rate is estimated at 16% a year, much higher than many if their competitors.
UNH has been successful by focusing on three distinct business segments: Selling health insurance, offering private Medicare plans, and providing technology to companies to help control costs.
This technology aspect will continue to grow in importance over time. Just recently UNH played a huge role in highlighting the risks of the arthritis drug vioxx. UNH was able to track client data and show a correlation between the increased health risks of taking the drug.
While there still may be some side effects from the options back dating scandals which occurred, with pending litigation still awaiting trial. Some analysts, such as Thomas Caroll, say that the fallout will not make a significant impact on future earnings.
While the stock has not done much for us, this is a solid stock, in a solid industry, with good long term growth prospects.
Dave Seaton
Analyst General Guide Line
For Analysts the following is a general guide line in which you can follow.
What major companies are in your sector and what have they recently done?
What are the average Market Caps? Average P/E? Recent stock price performance?
What are some major events which have taken place in your sector?
What has the sector index done over the past couple of weeks?
What are other analysts and people saying about the sector or the companies in the sector?
In your opinion is there a catalyst that could drive money into or out of the sector?
All of this information could be easily found on YAHOO. It should not take long and there really is no right answer. It is the process of researching the sector and the information which you will get the most out of.
What major companies are in your sector and what have they recently done?
What are the average Market Caps? Average P/E? Recent stock price performance?
What are some major events which have taken place in your sector?
What has the sector index done over the past couple of weeks?
What are other analysts and people saying about the sector or the companies in the sector?
In your opinion is there a catalyst that could drive money into or out of the sector?
All of this information could be easily found on YAHOO. It should not take long and there really is no right answer. It is the process of researching the sector and the information which you will get the most out of.
I-Phone Hype
Some plays on the I-Phone:
Apple has seen a tremendous run up in their share price, a majority of which has been factored in from the great expectations that the I-Phone should bring them.
Rather than focusing on the I-Phone it may be a better idea to take a look at some of the other companies that could benefit from I-Phone success.
ATT (T) is the exclusive phone operator for the I-Phone in the U.S. In one article it said that they may have the most to gain since consumers will be crowding their stores for the phone and will most likely end up making additional purchases. I like this stock also because of the changes they are making to their CEO and their aggressiveness in breaking into the Internet and digital cable business.
Broadcom (BRCM) This chipmaker makes the technology for the phones touch screen controller. Beyond their success with apple this opportunity might open up the flood gates for future business with other phone providers. Another interesting spin is to look at a company like
NOKIA (nok). They have been in the high end phone market for a while, and may gain market share thanks to APPPLE opening people’s eyes and wallets to
Apple has seen a tremendous run up in their share price, a majority of which has been factored in from the great expectations that the I-Phone should bring them.
Rather than focusing on the I-Phone it may be a better idea to take a look at some of the other companies that could benefit from I-Phone success.
ATT (T) is the exclusive phone operator for the I-Phone in the U.S. In one article it said that they may have the most to gain since consumers will be crowding their stores for the phone and will most likely end up making additional purchases. I like this stock also because of the changes they are making to their CEO and their aggressiveness in breaking into the Internet and digital cable business.
Broadcom (BRCM) This chipmaker makes the technology for the phones touch screen controller. Beyond their success with apple this opportunity might open up the flood gates for future business with other phone providers. Another interesting spin is to look at a company like
NOKIA (nok). They have been in the high end phone market for a while, and may gain market share thanks to APPPLE opening people’s eyes and wallets to
Healthcare Industry Update Dave Seaton
The Healthcare care industry is a dynamic industry made up of many different individual segments such as:
Biotechnology
Diagnostic Substances
Drug Delivery
Drug Manufacturers - Major
Drug Manufacturers - Other
Drug Related Products
Drugs - Generic
Health Care Plans
Home Health Care
Hospitals
Long-Term Care Facilities
Medical Appliances & Equipment
Medical Instruments & Supplies
Medical Laboratories & Research
Medical Practitioners
Specialized Health Services
One of the areas that I would like to focus on is Long-Term Care facilities. This is a segment of the healthcare industry that will inevitably be a direct play on baby boomers. The top players in long term care on Market Cap alone are Manor Cadre New (HCR), Brookdale Senior Living (BKD), Sunrise Senior Living (Srz), and Kindred Healthcare (KND).
Just this past week Kindred Healthcare, Inc announced the opening of Kindred Hospital in Pittsburgh, Pennsylvania, and the acquisition of a skilled nursing center and assisted living residence formerly operated by The Greens Communities. I believe that we will see much more consolidation in the coming years when it comes to long term care providers.
Beyond long-term care there was other news which occurred this past week in other areas of the Health Care Industry.
On July 17, 2007 -- Working together with Chatsworth, CA-based Competition, Inc. and San Diego, CA-based Skylight Healthcare Systems, Scottsdale Healthcare is piloting the healthcare industry's first clinically validated digital room service meal ordering. This first-in-class application delivers a valid clinical dietary menu to patients who may then self-order meals directly from the bedside. This will be a service that will surely be desired by patients and may ultimately catch on if it can reduce long term costs, and increase efficiency.
On July 19, 2007 -- Strategic Initiatives In Healthcare®, LLC (SIH), a New Jersey based research consulting firm, announced today that it will begin marketing its portfolio of concepts effective August 1, 2007.
After devoting more than 36,000 hours of research and development toward the creation of innovative solutions to reconfigure and realign operating mechanisms of the nation's 4,000+ not-for-profit hospitals. Many of these initiatives involve overhauling many of the previous outdated efficiencies which have been common in the healthcare industry.
McKesson, the world’s largest healthcare services, automation and information technology company, t announced the successful implementation of its Horizon Prenatal Care™ solution at St. Luke’s Hospital-Allentown, Campus, part of St. Luke’s Hospital & Health Network, in northeastern Pennsylvania. The solution is the first obstetrics (OB)/prenatal information system designed to support continuity of care between the labor and delivery (L&D) department and other hospital departments and units. The system enables interaction with enterprise clinical systems to provide ready access to historical patient information and eliminate redundant charting in support of providing safer, more efficient care to baby and mother.
Healthcare REITS
Another interesting segment has been Healthcare RIETS (Real Estate Investment Trusts). These are companies primarily focused on investing in medical office buildings and other real estate related assets that have a direct relation to the healthcare industry.
While the whole healthcare REIT group has taken a beating his year It may be a good time to reconsider taking a look at healthcare REITS again. Towards the end of last year they got hot really shot too high. It was the new, big asset class and expectations exceed their fundamentals. However, with the beating in which they have taken over the previous couple of months, now may be a good time to reconsider.
One which may be of interest is Healthcare Realty Trust (HR) , a real estate investment trust that focuses on medical office buildings. The company began last year to divest its interests in other markets such as skilled nursing and senior housing.
Private Equity
On the private equity side Water Street Healthcare Partners, a Chicago private-equity firm focused exclusively on the healthcare industry, announced last week that it has completed a two-part investment, in which it has acquired majority ownership in Alpine Biomed to support the company's purchase of the neurology diagnostic product line from Medtronic, Inc. The transaction creates a global leader in specialty diagnostic devices and marks Water Street's fifth investment in the past year.
Alpine Biomed will now be the market leader in producing diagnostic products used for gastro esophageal reflux disease (GERD), commonly referred to as acid reflux disease, a condition afflicting more than 60 million Americans, as well as neurology diagnostic products used for conditions such as carpal tunnel syndrome and sleep disorders. Headquartered in Fountain Valley, California, Alpine Biomed has manufacturing facilities in Denmark, the United States and Vietnam.
International
Taking a more international perspective, healthcare in emerging countries will inevitably become incredibly valuable as countries begin to get other priorities in line.
One country is South Korea. The country overhauled its healthcare industry with the introduction of healthcare insurance and other such reforms after the Asian economic downturn of 1997 in order to cut costs and increase competition. The Government has actively supported and participated in the industry by declaring investor-friendly policies and tax incentives to attract foreign investors. It also encourages health promotion activities and provision of healthcare services to the poor and vulnerable sections of the rural population. This industry could witness tremendous growth in the next five to ten years, as the Government's promise to increase its healthcare as well as drug and pharmaceuticals R&D expenditure will bring in new drug development projects to the country. The Government's decision to reduce the reimbursement of branded drugs by 20.0 percent upon patent expiration will further drive drug development.
Biotechnology
Diagnostic Substances
Drug Delivery
Drug Manufacturers - Major
Drug Manufacturers - Other
Drug Related Products
Drugs - Generic
Health Care Plans
Home Health Care
Hospitals
Long-Term Care Facilities
Medical Appliances & Equipment
Medical Instruments & Supplies
Medical Laboratories & Research
Medical Practitioners
Specialized Health Services
One of the areas that I would like to focus on is Long-Term Care facilities. This is a segment of the healthcare industry that will inevitably be a direct play on baby boomers. The top players in long term care on Market Cap alone are Manor Cadre New (HCR), Brookdale Senior Living (BKD), Sunrise Senior Living (Srz), and Kindred Healthcare (KND).
Just this past week Kindred Healthcare, Inc announced the opening of Kindred Hospital in Pittsburgh, Pennsylvania, and the acquisition of a skilled nursing center and assisted living residence formerly operated by The Greens Communities. I believe that we will see much more consolidation in the coming years when it comes to long term care providers.
Beyond long-term care there was other news which occurred this past week in other areas of the Health Care Industry.
On July 17, 2007 -- Working together with Chatsworth, CA-based Competition, Inc. and San Diego, CA-based Skylight Healthcare Systems, Scottsdale Healthcare is piloting the healthcare industry's first clinically validated digital room service meal ordering. This first-in-class application delivers a valid clinical dietary menu to patients who may then self-order meals directly from the bedside. This will be a service that will surely be desired by patients and may ultimately catch on if it can reduce long term costs, and increase efficiency.
On July 19, 2007 -- Strategic Initiatives In Healthcare®, LLC (SIH), a New Jersey based research consulting firm, announced today that it will begin marketing its portfolio of concepts effective August 1, 2007.
After devoting more than 36,000 hours of research and development toward the creation of innovative solutions to reconfigure and realign operating mechanisms of the nation's 4,000+ not-for-profit hospitals. Many of these initiatives involve overhauling many of the previous outdated efficiencies which have been common in the healthcare industry.
McKesson, the world’s largest healthcare services, automation and information technology company, t announced the successful implementation of its Horizon Prenatal Care™ solution at St. Luke’s Hospital-Allentown, Campus, part of St. Luke’s Hospital & Health Network, in northeastern Pennsylvania. The solution is the first obstetrics (OB)/prenatal information system designed to support continuity of care between the labor and delivery (L&D) department and other hospital departments and units. The system enables interaction with enterprise clinical systems to provide ready access to historical patient information and eliminate redundant charting in support of providing safer, more efficient care to baby and mother.
Healthcare REITS
Another interesting segment has been Healthcare RIETS (Real Estate Investment Trusts). These are companies primarily focused on investing in medical office buildings and other real estate related assets that have a direct relation to the healthcare industry.
While the whole healthcare REIT group has taken a beating his year It may be a good time to reconsider taking a look at healthcare REITS again. Towards the end of last year they got hot really shot too high. It was the new, big asset class and expectations exceed their fundamentals. However, with the beating in which they have taken over the previous couple of months, now may be a good time to reconsider.
One which may be of interest is Healthcare Realty Trust (HR) , a real estate investment trust that focuses on medical office buildings. The company began last year to divest its interests in other markets such as skilled nursing and senior housing.
Private Equity
On the private equity side Water Street Healthcare Partners, a Chicago private-equity firm focused exclusively on the healthcare industry, announced last week that it has completed a two-part investment, in which it has acquired majority ownership in Alpine Biomed to support the company's purchase of the neurology diagnostic product line from Medtronic, Inc. The transaction creates a global leader in specialty diagnostic devices and marks Water Street's fifth investment in the past year.
Alpine Biomed will now be the market leader in producing diagnostic products used for gastro esophageal reflux disease (GERD), commonly referred to as acid reflux disease, a condition afflicting more than 60 million Americans, as well as neurology diagnostic products used for conditions such as carpal tunnel syndrome and sleep disorders. Headquartered in Fountain Valley, California, Alpine Biomed has manufacturing facilities in Denmark, the United States and Vietnam.
International
Taking a more international perspective, healthcare in emerging countries will inevitably become incredibly valuable as countries begin to get other priorities in line.
One country is South Korea. The country overhauled its healthcare industry with the introduction of healthcare insurance and other such reforms after the Asian economic downturn of 1997 in order to cut costs and increase competition. The Government has actively supported and participated in the industry by declaring investor-friendly policies and tax incentives to attract foreign investors. It also encourages health promotion activities and provision of healthcare services to the poor and vulnerable sections of the rural population. This industry could witness tremendous growth in the next five to ten years, as the Government's promise to increase its healthcare as well as drug and pharmaceuticals R&D expenditure will bring in new drug development projects to the country. The Government's decision to reduce the reimbursement of branded drugs by 20.0 percent upon patent expiration will further drive drug development.
Tuesday, June 19, 2007
The Apple
The Apple (AAPL) has been one of the best performing stocks in the US in recent years. Today I'm stepping out on a limb and claiming that the recent action looks like a classic example of "buy on the rumor, sell on the news."
The innovation of the ipod has propelled Apples earnings, creating the story stock it has been over the last 5 years. In 2003, the stock was trading below $10. Today, June 19, 2007, the stock closed out at $123.66. That's a greater than 1100% gain, yeah 1100%, that is what investing is all about!
Recently there has been a lot of hype regarding AAPL and the release of their new iphone ("rumor") - scheduled for June 29 ("news"). AAPL has been all of the recent talk in chat rooms and airways. One lesson I've learned in my short tenure in markets is that when everybody is talking about an investment like it will never go down, you're too late or it's time to think about selling.
AAPL is up over 40% this year. With recent quarters showing slowed demand for the ipod, investors are looking for growth in other places (the iphone). It seems fitting that the ipod has possibly saturated its market since everybody and their mom has one or even two. Other players are starting to enter the portable music space as well. AAPL and investors have turned to the hyped iphone for growth, but how much is the iphone actually going to add to the top and bottom line, it's all speculation now, we'll know the truth in coming quarters. Don't get me wrong, Apple is a tremendously healthy company, run by one of the most successful business men of the 20th century - Steve Jobs - and with over $12 billion cash in the bank, they have a lot going for them in the future.
What I'm trying to say is with the recent run up in price and "lunch room hype" I've been hearing all over the place, as an investor I'd keep my eyes peeled for an unfolding of the old Wall Street adage "buy on the rumor and sell on the news." I could always be wrong, as you can see from the chart above the stock is in a strong pattern and I don't like to bet against the grain, but if you're looking to add AAPL to your portfolio I think it's a time to be very hesitant. If you're not already enjoying the ride, I believe it would be smarter to wait until the news passes. If you own the stock don't get caught up in all the hype, think about taking a little off the table. It's okay to take profits - you're making money! And in the short term, look for signs of increasing selling volume and decreasing buying volume as a possible top in the stock.
The innovation of the ipod has propelled Apples earnings, creating the story stock it has been over the last 5 years. In 2003, the stock was trading below $10. Today, June 19, 2007, the stock closed out at $123.66. That's a greater than 1100% gain, yeah 1100%, that is what investing is all about!
Recently there has been a lot of hype regarding AAPL and the release of their new iphone ("rumor") - scheduled for June 29 ("news"). AAPL has been all of the recent talk in chat rooms and airways. One lesson I've learned in my short tenure in markets is that when everybody is talking about an investment like it will never go down, you're too late or it's time to think about selling.
AAPL is up over 40% this year. With recent quarters showing slowed demand for the ipod, investors are looking for growth in other places (the iphone). It seems fitting that the ipod has possibly saturated its market since everybody and their mom has one or even two. Other players are starting to enter the portable music space as well. AAPL and investors have turned to the hyped iphone for growth, but how much is the iphone actually going to add to the top and bottom line, it's all speculation now, we'll know the truth in coming quarters. Don't get me wrong, Apple is a tremendously healthy company, run by one of the most successful business men of the 20th century - Steve Jobs - and with over $12 billion cash in the bank, they have a lot going for them in the future.
What I'm trying to say is with the recent run up in price and "lunch room hype" I've been hearing all over the place, as an investor I'd keep my eyes peeled for an unfolding of the old Wall Street adage "buy on the rumor and sell on the news." I could always be wrong, as you can see from the chart above the stock is in a strong pattern and I don't like to bet against the grain, but if you're looking to add AAPL to your portfolio I think it's a time to be very hesitant. If you're not already enjoying the ride, I believe it would be smarter to wait until the news passes. If you own the stock don't get caught up in all the hype, think about taking a little off the table. It's okay to take profits - you're making money! And in the short term, look for signs of increasing selling volume and decreasing buying volume as a possible top in the stock.
Friday, June 8, 2007
Out of Hibernation
Friday June 8, closed out one of the worst weeks seen since the dubbed "Shanghai Surprise" experienced in late February. The S&P closed down just about 2.5% for the week. Thursday saw the most blood, closing at the low, with a 1.8% decline. An important factor on the day was increased volume, the NYSE trading a whopping 1.9 billion shares which is significantly higher than the 1 month average of 1.53 billion. Amazingly, 1.9 billion shares equals a dollar volume amount of $82.6 billion traded in just one day - I'll take just a little bit of that, please!
An almighty test is looming next week. The 50 day moving average (dma) is one of the most followed technical indicators on the globe. As you can see from the chart below the major averages are hovering right at the 50 dma. This should act as some sort of support, but for how long nobody knows. If prices were to break the 50 dma, we could only assume a possible next target would be the 200 dma (the other most followed technical indicator on the globe).
Don't forget that the trends of these averages are upward sloping which should lead us to believe that short-term lower prices is an opportunity to pick up good stocks on "sale". There are good reasons to be bullish in the current time including global economic growth and massive M&A action. Always, economic conditions can change, but if it gets real bloody on the street and everybody is running for the hills we should be looking to back up the truck.
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