Earlier in the year the healthcare sector experienced some selling pressure, and chatter of drug-price reform during the presidential primaries picked up. In recent months we have seen strength return to the sector, and there are still some good buys to be found.
The first Presidential debate is in the books, and while healthcare was not a major talking point, you can be sure that it will be in one of the next two debates. Both candidates will likely discuss high drug costs, and state their intent to do something about rising healthcare costs, which could bring some weakness back into the sector.
While I believe we will see at least some short-term selling pressure, I see more reasons to be bullish on the overall sector moving forward.
The first reason is that the Baby Boomer generation is aging, and with an estimated 10,000 people hitting retirement age every day, demand for healthcare services is likely to rise. People are living longer, but they still have health needs that will need to be met, and the next couple of decades could witness a huge increase in health care needs for the generation.
Another reason to have a bullish outlook is that more Americans have found insurance coverage under Obamacare. A higher number of insured Americans will lead to increased visits to doctors and hospitals.
Health care costs will always be a major talking point around election time, and it would not be surprising in the least to see healthcare take center stage in the weeks leading up to the election in November. This could have a short term impact on healthcare stocks, but I would expect to see any sell off be short-lived, and if you are ready for the short term weakness there will be some good buys to be found.
Each of the following stocks will be vulnerable to weakness in the overall sector, but are also solid players that offer fantastic long-term potential for investors that want to jump into the sector in the near term.