Entries filed under 'Health Care'

    Taking the Pulse of Life Sciences and Diagnostics

    April 8, 2015 9:15 AM by Heidi Lawrence

    Next-generation genomic sequencing should not only permit the use of new clinical applications that were not previously feasible but also save the healthcare system money.

    Although speculation about mergers and acquisitions (M&A) has generally supported valuations in the life sciences tools and diagnostics sector, I have advised my colleagues to consider such companies based on select capital deployment and secular growth stories.

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    Research in Action: Adapting to "Reimburse-itis"

    April 7, 2015 9:15 AM by Devesh Karandikar

    How cost containment and efficiency initiatives have complicated investing in hospitals, managed care, and medical device companies.

    While decreased uncertainty about healthcare reform pushed price/earnings multiples of some companies in biotech and pharma universe close to peak valuations, the healthcare services and medical devices sector has been wrestling with cost containment and efficiency in the face of increasing pressure on reimbursement from insurers.

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    Research in Action: Big Pharma on Steroids

    March 27, 2015 12:20 PM by Lavina Talukdar

    Relentless innovation and ongoing mergers and acquisitions have created significant investment opportunities in the pharmaceuticals and biotechnology sectors. 

    Prescription drugs may be a relatively small significant chunk of national healthcare expenditures each year (see Chart 1), but ongoing innovation and consolidation in the sector has had a powerful effect on valuations. 

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    Was the Affordable Care Act a "Bond-Aid"?

    September 10, 2014 10:35 AM by Lord Abbett Editorial Staff

    While the ACA definitely helped stocks, its impact on bonds was actually a mixed bag. Tax-free bonds issued by hospitals have remained attractive.  

    When the U.S. Supreme Court upheld the ACA at the end of 2012, both the Merrill Lynch High-Yield Healthcare Indexand Merrill Lynch Investment-Grade Healthcare Index2 were already trading close to their overall asset class indexes, reflecting those sectors’ generally perceived defensive characteristics.

    According to Lord Abbett Research Analyst Bill Carpenter, both of those healthcare indexes have modestly underperformed the Merrill Lynch High Yield Master II Index3 and Merrill Lynch U.S. Corporate Master (A) Index4, respectively, ever since for that reason—and because of the combination of the low interest-rate environment and the availability of other better-yielding sectors within the respective corporate universes. Thus, most of the overall healthcare sector’s volatility (both positive and negative) has been reflected in stock prices rather than bond prices.

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    Taking Health Care of Your Investments

    September 4, 2014 10:53 AM by Lord Abbett Editorial Staff

    Long considered defensive, the healthcare sector has been one of the best performing sectors of late. How sustainable is this trend?

    In an article that might rile detractors of the Affordable Care Act (ACA), three business professors recently extolled the long-term benefits of investing in the healthcare industry, especially now that national healthcare spending since 2013 is expected to grow faster than the overall economy through 2020, regardless of legislative changes.

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