Thursday, August 28, 2008

Goldman's Obama Play

Goldman has just issued a report advising that hospital stocks could rally before the election, especially if it appears that Obama is going to be the winner. Goldman argues:

With hospitals trading at a modest discount to historical medians we believe the hospital stocks could rally if the prospects for health reform and expanded coverage are seen as increasing

The run-up to former President Clinton’s proposed health reform initiative saw hospital stocks outperform the market by 35% from 1993-94 supporting our view
Since Obama wants to provide universal health acre, the thinking goes that the 116 million uninsured will start flocking to medical facilities for every pain. And, it is more likely that the government will expand insurance coverage if Barrack Obama wins the election. As a result, an Obama presidency will be bullish for hospital stocks.

No comments:

Post a Comment