{"id":6429,"date":"2016-11-08T21:16:13","date_gmt":"2016-11-08T21:16:13","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=6429"},"modified":"2016-11-08T21:16:13","modified_gmt":"2016-11-08T21:16:13","slug":"health-care-sector-investors-need-to-pick-your-spots","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=6429","title":{"rendered":"Health Care Sector: Investors Need to Pick Your Spots"},"content":{"rendered":"

Thomson Reuter’s quick peek at Health Care earnings as of 11\/7\/16:<\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n# of<\/td>\n#<\/td>\nEarnings<\/strong><\/td>\nRevenue<\/strong><\/td>\n<\/tr>\n
Health Care<\/strong><\/td>\nCos<\/strong><\/td>\nRep<\/strong><\/td>\nSurprise<\/strong><\/td>\nAbove<\/strong><\/td>\nMatch<\/strong><\/td>\nBelow<\/strong><\/td>\nGrowth<\/strong><\/td>\nSurprise<\/strong><\/td>\nAbove<\/strong><\/td>\nMatch<\/strong><\/td>\nBelow<\/strong><\/td>\nGrowth<\/strong><\/td>\n<\/tr>\n
Biotechnology<\/td>\n8<\/td>\n8<\/td>\n2.1%<\/td>\n75%<\/td>\n0%<\/td>\n25%<\/td>\n2.1%<\/td>\n0.5%<\/td>\n63%<\/td>\n0%<\/td>\n38%<\/td>\n3.2%<\/td>\n<\/tr>\n
Health Care\u00a0 Services<\/td>\n4<\/td>\n4<\/td>\n0.2%<\/td>\n50%<\/td>\n25%<\/td>\n25%<\/td>\n13.9%<\/td>\n-0.3%<\/td>\n25%<\/td>\n0%<\/td>\n75%<\/td>\n1.4%<\/td>\n<\/tr>\n
Health Care Distributors<\/td>\n5<\/td>\n4<\/td>\n0.0%<\/td>\n75%<\/td>\n0%<\/td>\n25%<\/td>\n-5.8%<\/td>\n-0.4%<\/td>\n25%<\/td>\n0%<\/td>\n75%<\/td>\n6.5%<\/td>\n<\/tr>\n
Health Care Equipment<\/td>\n14<\/td>\n13<\/td>\n3.8%<\/td>\n69%<\/td>\n23%<\/td>\n8%<\/td>\n8.4%<\/td>\n0.6%<\/td>\n85%<\/td>\n0%<\/td>\n15%<\/td>\n3.7%<\/td>\n<\/tr>\n
Health Care Facilities<\/td>\n2<\/td>\n2<\/td>\n8.4%<\/td>\n50%<\/td>\n0%<\/td>\n50%<\/td>\n28.2%<\/td>\n-0.9%<\/td>\n50%<\/td>\n0%<\/td>\n50%<\/td>\n5.0%<\/td>\n<\/tr>\n
Health Care Supplies<\/td>\n2<\/td>\n1<\/td>\n5.3%<\/td>\n100%<\/td>\n0%<\/td>\n0%<\/td>\n4.8%<\/td>\n-1.4%<\/td>\n0%<\/td>\n0%<\/td>\n100%<\/td>\n32.1%<\/td>\n<\/tr>\n
Health Care Technology<\/td>\n1<\/td>\n1<\/td>\n-1.9%<\/td>\n0%<\/td>\n0%<\/td>\n100%<\/td>\n9.3%<\/td>\n-4.9%<\/td>\n0%<\/td>\n0%<\/td>\n100%<\/td>\n5.0%<\/td>\n<\/tr>\n
Life Sciences Tools & Services<\/td>\n6<\/td>\n4<\/td>\n3.8%<\/td>\n75%<\/td>\n25%<\/td>\n0%<\/td>\n12.6%<\/td>\n1.7%<\/td>\n50%<\/td>\n0%<\/td>\n50%<\/td>\n7.3%<\/td>\n<\/tr>\n
Managed Health Care<\/td>\n6<\/td>\n6<\/td>\n2.3%<\/td>\n67%<\/td>\n0%<\/td>\n33%<\/td>\n11.6%<\/td>\n0.6%<\/td>\n67%<\/td>\n0%<\/td>\n33%<\/td>\n12.1%<\/td>\n<\/tr>\n
Pharmaceuticals<\/td>\n11<\/td>\n7<\/td>\n2.1%<\/td>\n57%<\/td>\n0%<\/td>\n43%<\/td>\n9.7%<\/td>\n0.8%<\/td>\n57%<\/td>\n0%<\/td>\n43%<\/td>\n5.5%<\/td>\n<\/tr>\n
TOTAL<\/strong><\/td>\n59<\/strong><\/td>\n50<\/strong><\/td>\n2.3%<\/strong><\/td>\n66%<\/strong><\/td>\n10%<\/strong><\/td>\n24%<\/strong><\/td>\n7.5%<\/strong><\/td>\n0.2%<\/strong><\/td>\n58%<\/strong><\/td>\n0%<\/strong><\/td>\n42%<\/strong><\/td>\n7.0%<\/strong><\/td>\n<\/tr>\n
Source: Thomson Reuters I\/B\/E\/S<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

As of yesterday in terms of Q3 ’16, Health Care is still growing revenue at 7% driving earnings growth of 7.5%.<\/p>\n

If readers look at the above chart, “Health Care Distributors” looks to be the trouble spot, with companies in that category reporting just 25% of those company’s reporting better-than-consensus revenue. 75% of thise companies missed their revenue estimates.<\/p>\n

The real issue is what happens to Health Care in 2017: here is a quick table of the Health Care sectors “expected” 2017 earnings growth:<\/p>\n

    \n
  • 11\/4\/16: +8.8%<\/li>\n
  • 10\/28\/16: +9.5%<\/li>\n
  • 10\/21\/16: +10%<\/li>\n
  • 10\/14\/16: +10.1%<\/li>\n
  • 10\/7\/16: +10.2%<\/li>\n
  • 9\/30\/16: +10.2%<\/li>\n
  • 9\/23\/16: +10.3%<\/li>\n<\/ul>\n

    While there is some downward pressure as long as the numbers stay above “mid-single-digits” HealthCare should be ok.<\/p>\n

    CVS’s guide-down this morning was a shocker. Although the stock is found in Consumer Staples, CVS is tied to the Health Care sector, and the warning around the retail drug segment for 2017 wasn’t good. I expected the PBM to be under pressure, not the retail drug segment,<\/p>\n

    Clients are currently “underweight” Health care with the largest position being Pfizer (PFE). Clients do own a little IBB, and some IHE, and PPH, but the positions are small right now.<\/p>\n

    How Prop 61 does tonight in California and the composition of the Senate, will matter. It is price controls that is the biggest risk over the next year.<\/p>\n

    Bristol-Meyers (BMY) has gotten crushed, Pfizer is down from $38 to $31, and testing its uptrend line, Merck is acting very well, I do think there is value in the old-school large-cap pharma stocks.<\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Thomson Reuter’s quick peek at Health Care earnings as of 11\/7\/16:   # of # Earnings Revenue Health Care Cos…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[164,32,33],"tags":[],"class_list":["post-6429","post","type-post","status-publish","format-standard","hentry","category-health-care-sector","category-mrk","category-pfe"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6429","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6429"}],"version-history":[{"count":3,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6429\/revisions"}],"predecessor-version":[{"id":6432,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6429\/revisions\/6432"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}