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Barron's: 2 Drug Stocks to Fight Medicare for All Fever

Barron's: 2 Drug Stocks to Fight Medicare for All Fever
(Tero Vesalainen/Dreamstime)

By    |   Wednesday, 15 May 2019 09:43 AM

JPMorgan argues there are still stocks worth buying in the health-care and drug-making industry despite calls for "Medicare for All" ahead of the coming 2020 presidential election.

Health and drug stocks have been rattled by fears that the cost of treatment and drugs could take center stage. Health-care stocks have had a rough ride in 2019, with the Health Care Select Sector SPDR ETF (XLV) up less than 1% year to date, Barron’s reported.

However, JPMorgan analyst Chris Schott looked at the backdrop for drugmakers on Monday, writing that with most companies’ first-quarter results already out, the reports largely highlight a “still volatile specialty pharma environment.”

The industry as a whole is still under pressure as companies deal with legacy headwinds and high debt levels, Schott writes. But investors don’t have to abandon the sector entirely.

“As we begin to move beyond this multiyear period of contraction for the space, we are increasingly focused on names able to generate organic growth (and others than will continue to struggle),” Schott says.

Schott suggests investors should stock up on Coherus BioSciences (CHRS) and Mylan (MYL).

Coherus is “increasingly well positioned as a pure play biosimilar story and the [neutrophils-related infection drug] Udenyca launch off to a great start,” Barron’s quoted him as writing.

As for Mylan, Schott said he was “frustrated” with the company’s first-quarter update last week, but thinks the selloff is overblown. Mylan shares are worth buying as they remain trading near historic lows, he said.

More health-care analysts are defending managed-care companies after Democrats’ new Medicare for all bill spooked investors in February.

Most agree that the bill has almost no chance of passing in the current Congress, with Veda Partners’ Spencer Perlman calling it “an impossible dream.” Analysts said the market’s response was an overreaction and recommended that investors to buy shares on weakness, Bloomberg reported.

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JPMorgan argues there are still stocks worth buying in the health-care and drug-making industry despite calls for Medicare for All ahead of the coming 2020 presidential election.
drug, stocks, health, care, barrons, jpmorgan
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2019-43-15
Wednesday, 15 May 2019 09:43 AM
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