Healthcare and Drug Stocks Jump Amid Expected Senate Stalemate

Shares of healthcare and drug stocks jump as investors calculate a Senate stalemate will mean to dramatic changes for either sector.

Shares of healthcare stocks jumped on Wednesday as investors calculated that regardless of whether Donald Trump or Joe Biden ends up in the White House over the next four years a Senate stalemate will mean no dramatic changes for either sector.

Shares of Anthem  (ANTM) - Get Report, Cigna  (CI) - Get Report, UnitedHealth  (UNH) - Get Report and others were all trading higher on Wednesday as investors took solace in general healthcare providers that that they expect will continue to provide health services for Americans irrespective of who is in the Oval Office.

While psychological red vs. blue battle lines may have been drawn by healthcare- and pharma-focused investors, many healthcare companies as well as drugmakers will continue to perform well regardless of an ultimate Trump or Biden win, Jim Cramer told his Mad Money viewers on Tuesday.

The same holds true for drugmakers and pharmaceutical companies focused on therapeutics, cancer treatment and prevention and general health maintenance such as Abbott  (ABT) - Get Report, Bristol-Myers Squibb  (BMY) - Get Report, Centene  (CNC) - Get Report, DexCom  (DXCM) - Get Report, Regeneron  (REGN) - Get Report and Thermo Fisher  (TMO) - Get Report, Cramer said.

“Merck  (MRK) - Get Report reported an excellent quarter. I liked Lilly  (LLY) - Get Report with a stock that was clobbered because of a drug it made that didn't have the needed efficacy against Covid in the hospital. UnitedHealth reported an incredible quarter and it's now down big,” Cramer said. 

Indeed, shares of Bristol-Myers, Centene, Regeneron and Thermo Fisher were also higher on Wednesday on expectations that demand for drugs and other treatments will remain constant.

“Consider DexCom," said Cramer. "Its got the best glucose monitor. But if you follow the thinking laid out here, you will believe that Medicare will only pay for the cheaper Abbott offering. The decline in the stock of DexCom has been severe, the work of longs trying, and failing, to beat shorts out of the stock.”

Anthem, too, is in good form, adding to its Medicare and Medicaid membership rolls and expanding into areas such as behavioral health and pharmacy benefits, the company said recently. Anthem also said it sees earnings rising at least 12% in 2021 amid price increases and new revenue streams.

Bristol-Myers and Abbott are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.