|
Medical continues to be the leading sector in terms of positive earnings estimate revisions. The comparatively low level of economic sensitivity is a big factor for why the sector ranks so well.
Multiple companies within the sector have reported good third-quarter earnings and raised guidance. These bullish events have led to positive earnings estimate revisions by brokerage analysts. They have also allowed Medical-Biomedical/Genetics and Medical-Generic Drugs to be among the best ranked industry groups.
Investors who are interested in both groups should note that company stories matter more than in other groups. The reason is that drug approval and drug safety issues are factors that can significantly influence a stock's price. Therefore, a greater focus on company selection is required than in other industry groups.
President Obama intends to allow the federal government to negotiate on drug prices, he also wants universal coverage. It is possible that drug companies could end up seeing a greater amount of business, albeit at lower margins.
Last edited Tue Apr 07, 2009 01:41 AM
by ShaliniSinghal (Zacks Investment Research)
|
