The healthcare sector has been a strong performer in the stock market. The Healthcare portfolio also represents the strongest of the three models that I have been managing on the Covestor Platform.
With the gradual implementation of the Affordable Care Act (ACA) also known as “Obamacare,” it is expected that 31 million additional Americans will be able to access improved healthcare and shall thus add to the importance of this sector in our economy.
Since February 1, 2013, I have parted company with several positions in this model and have added several new and previously held positions into the portfolio.
The stocks that have been cut from the model include the pharmaceutical distributor McKesson (MCK), Medtronic (MDT), Novo Nordisk (NVO), and most recently Walgreen (WAG). These stocks have shown technical weakness although McKesson, after some volatility, has resumed its upward trend in price.
Additions to the model include the biotech firm Biogen Idec (BIIB), CareFusion (CFN), Covidien (COV), Eli Lilly (LLY), Celegene (CELG) and Stericycle (SRCL). Their continued presence in the portfolio will depend on their own performance or lack thereof.
With an aging population, the growth in healthcare spending is inevitable. However, there will also be continued pressure on margins with alternative treatments and more efficient delivery of healthcare offering investors additional opportunities. My own holding of Mylan (MYL), a generic drug producer fills that particular niche, in my opinion.
Like my Buy and Hold, Value portfolio, I continue to work this model, parting company with holdings that fail to meet my own expectations, looking for new positions to include and revisiting old positions that deserve re-inclusion in the model.
I would like to revisit the Veterinary investments that I have previously held including MWI Veterinary Supply (MWIV) that continues to outperform the market (without me) or IDEXX Laboratories (IDXX) that also provides veterinary services. However, like every investor, I have learned that I cannot own every single stock I see!
I would like to extend my appreciation to Covestor for providing me this opportunity to manage the Healthcare Portfolio on this Platform. And I certainly would like to thank those of you who have chosen to mirror my holdings as well.
The healthcare business will continue to be a major factor in our economy and in our lives as well. I hope to continue to identify those companies that offer the greatest promise and be just as quick to part company with those investments that fail to do so.
The investments discussed are held in client accounts as of March 8, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
