This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Health Care Stocks to Watch in 2010

Managed care stocks have experienced quite the run-up as a resolution in healthcare reform has become more visible.

There was no health care sub-sector in which the reform overhang was more damaging to stock performance than managed care. Even today, managed-care stocks are still trading at approximately two-thirds of the broad market p/e ratio, demonstrating the ongoing skepticism of how well managed-care stocks can perform post-reform.

Cigna (CI - Get Report) has led the way in the recovery of managed-care stocks. Is the run done?

The 2010 story for Cigna and the managed care universe is, first and foremost, that the reform overhang will be gone and it will be a year of transition. Curbs on business will be significant: excise taxes, lifetime caps on benefits, and the inability to exclude pre-existing conditions, among them. Costs associated with these changes may not be passed on to customers until after 2010.

The market perception is that Cigna's tilt to the commercial business (80% of which is self-insured and not subject to adverse impact from higher COBRA enrollment), and its 40% ex-U.S. business stream, will insulate it from many of the reform package cost targets. Still, some analysts point out that many of those Medicare cuts aren't going to kick in immediately in 2010 -- maybe not until 2014 -- making it hard to see much more room for movement up in Cigna shares in the short-term.

3 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CERN $71.81 -1.45%
BSX $18.40 1.32%
CI $131.13 -1.26%
MRK $56.88 -1.66%
PFE $35.04 -0.43%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs