Healthy Picks in Health Care
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One sure sign that health care is a stock sector to watch these days: Health-care stocks make up 20% of the issues on Standard & Poor’s “strong buy” list at the moment. Robert M. Gold, director of health-care and consumer-staples research for S&P, points out that S&P recommends overweighting your portfolio with health care. Along with consumer staples and energy, S&P sees this sector as defensive and less economically cyclical. But it also has strong growth potential. Gold does expect corporate earnings to turn up — and buoy the stock market — later this year. Meantime, he especially likes health-care issues such as HealthSouth, Oxford Health Plans, Tenet Health Care, and biotech company ImClone, among others. He is less sanguine about large-cap pharmaceuticals because of competitive pressures and the drying-up of product pipelines. However, S&P does gives strong buy ranking to Pfizer and Bristol-Myers Squibb. These comments on health-care stocks came in a chat presented on Feb. 13 on America Online by BusinessWeek Online and Standard & Poor’s. Gold was replying to questions from the audience and from BW Online’s Jack Dierdorff. Edited excerpts from the chat follow. A complete transcript of this chat is available from BW Online on AOL, keyword: BW Talk. Q: Robert, Mr. Greenspan sounded dour about the economy again in testimony today. Is he affecting your market outlook? A: In fact, it’s no surprise to us that the economy is going through a corrective phase. His comments largely mirror those of CEOs across a wide range of industry groups — most notably technology, consumer cyclicals, communications services, and capital goods. It’s for that reason that S&P recommends underweighting in those areas, and we continue to emphasize the more defensive and less economically cyclical areas, including consumer staples, energy, and health care. More : businessweek.com |