Health care rally is just beginning, two businessmen say

The health care sector is getting its strength back.

This according to Quint Tatro, president of Joule Financial, who said that the sector is addressing concerns of the past that are weighing down the group.

“There has been a lot of general uncertainty in that overall health care parameter and a stretch over the entire region,” said CNBC’s “Trading Nation” on Thursday. “We are now seeing that relief and seeing a particularly strong surge within that area again because the blue wave is not coming.”

While the counting of votes still continues in many battlegrounds, shares rose on Thursday as Wall Street, which seemed to warm up to the idea of ​​Democratic candidate Joe Biden in the White House, retained control of the Republican Senate Were.

“The whole group … worried a lot about this kind of blue wave, much like the general market and if Democrats were able to move through ‘Medicare for All’, what it would do for the entire industry.”

The XLV, the ETF that tracks health care stocks, closed in the green on Thursday, climbing less than half a percent after hitting a new all-time high the day before, and when Tetro said it would immediately take his Won’t follow, there are still some names he is adding to his portfolio.

“Our favorites are two of the two big pharma plays, and that’s Pfizer and Merck. Primarily, these are the names that have the best balance sheets in the industry,” he said. “They are still very highly leveraged, so you should pay attention to whether, and when, we ever see a high interest rate. I doubt that happens anytime soon, but Pfizer earns 12 times ahead. And doing business around Merck. 13 times. Good value. “

Jesse O’Hara, MKM Partners’ chief market technician, agrees with Tatro on the recapture of health care, and has few stock options of his own.

“Some of the most important breakouts we’re seeing today [Thursday] Coming from managed care shares. United Health, Cigna, Anthem. They are all growing, ”Ohm said on the same show before digging into Anthem’s technical levels.

“There was stiff resistance at $ 310, great support at $ 230, and the fact that we are able to move meaningfully through the resistance, speaks further upside down, and I say that because historically when we When looking at powerful rallies, they usually come after major consolidations, “O’Hara said. “We believe there is at least 20% upside from current levels, so we can set a $ 400 technical target for the anthem here.”

The anthem dropped 2.5% on Thursday.

Disclosure: Joule Financial and its shares of Tatro Pfizer and Merck



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