Author: Robert Freedland
Covestor model: Healthcare
Disclosure: Long ISRG, BAX
During the month of February, 2011, the Healthcare model had a decent month, but slightly underperformed the S&P 500. I continued to fine tune the holdings of the Healthcare model and made a few changes into what I believed to be more promising stocks.
Laboratory Corporation of America (LH) was sold after decent earnings were reported on February 10, 2011 which came in ahead of Zacks estimates but earnings guidance came in below expectations. Both Patterson (PDCO) and ResMed (RMD) were sold after these holdings exceeded an 8% loss for me. Teva (TEVA) the pharmaceutical company was sold after unexplained weakness in this otherwise fundamentally strong company that has been attributed to middle east instability in this Israel-based generic drug company.
New positions for this model included Intuitive Surgical (ISRG) the maker of the DaVinci machines that perform robotic surgery, and Baxter (BAX) the medical supplies and product company.
While Health Care reform remains an ongoing issue facing the American Congress, I expect that with an aging population domestically and a growing middle class population worldwide, that demand for medical goods and services may well grow into the future. I plan on continuing to try to position this portfolio in areas of long-term opportunity and growth.
Sources:
LH: “LabCorp Beats, EPS Guidance Misses,“ Zacks Equity Research, 2/10/11 https://www.zacks.com/stock/news/47433/LabCorp+Beats,+EPS+Guidance+Misses+
TEVA: “Israel’s Tech ADRs Suffer Some Rough Times” Donald Gold, Investor’s Business Daily, 2/24/11. http://www.investors.com/NewsAndAnalysis/Article/564123/201102241841/Israels-Tech-ADRs-Regain-Some-Ground-.aspx
ISRG: “da Vinci® Surgical System “ Biomed.Brown.Edu http://biomed.brown.edu/Courses/BI108/BI108_2005_Groups/04/davinci.html
Healthcare reform:
“Reforming healthcare reform” Los Angeles Times, Editorial, 3/2/11 http://articles.latimes.com/2011/mar/02/opinion/la-ed-health-20110302
“As aging population grows, health care adapts” Leigh Wilkins, For Healthy Connections, 2/25/11 http://www.daytondailynews.com/lifestyle/ohio-health-news/as-aging-population-grows-health-care-adapts-1091152.html?cxtype=rss_health
