Investing in Health Care

First, it is important to note that the health care sector has been on a tear this year. Most of the stocks listed here are near their 52- week highs. Sales and income growth are rising. The surge is due to the increased number of “Baby Boomers” who are retiring now and for the next 20 years. Here are some startling numbers:
· 35% of Americans are already over age 65.
· The Baby Boom Generation definition includes those born from January 1st 1946 to December 31st 1964.
· January 1st 2011 saw the first wave of boomers retiring.
· According to the Pew Research Center 10,000 persons will retire EVERY DAY for the NEXT 19 YEARS!

Often, we confuse health care with the leading drug companies such as Johnson & Johnson, Pfizer, Roche, Glaxo Smith Kline or Novartis. It is important that we distinguish between drug manufacturers and health care providers. In the health care sector we find the companies that support health care, that make organizations such as hospitals, acute care facilities, research laboratories, suppliers and medical equipment makers function effectively and efficiently. These companies have been organized in several sub groups to help investors quickly identify exactly what a given company provides. Some names are found under the radar. Most face stiff competition from their peers. The ones chosen here are the leaders in a given specialty.

Pharmaceuticals
Amgen Inc. (AMGN) is a well -known leader. It discovers, develops innovative therapeutics for cancer, kidney disease, rheumatoid arthritis, bone disease and other illnesses. Recent stock price is $108.94. 52 week high/low is $116.25/$80.00. Market cap is $82.07 billion. Net Profit margin is 25.98%
Endo Health Solutions (ENDP) It provides specialty pharmaceuticals through research, development, sales and marketing of branded and generic prescription drugs. Stock price is $46.09. 52- week high/low is $41.74/$25.01. Market cap is $4.69 billion. Net Profit margin is –20.22.
Depomed (DEPO) Key drugs are for central nervous system disorders. Income is also derived from license agreements, license fees, milestones, royalties and collaborative agreements. Recent price is $7.17. The 52 week high/low is $7.38/$4.99. Market cap is $406.98 million. Net Profit margin is –8.79.
Opko (OPK) produces proprietary pharmaceutical diagnostic and imaging systems and instrumentation products. Recent price is $9.24. 52- week high/low is $10.00/$4.05. Market cap is $2.98 billion Net Profit margin is –59.27
China Cord Blood Corp. (CO). It maintains the largest cord blood bank in China. It stores cord blood from patients for 18 years, at which time they can either give it up or continue storage. Recent stock price is $3.83. 52- week high/low is $4.60/$2.54. Market cap is $279.92 million Net Profit margin is 21.18%

Acute Care Facilities
Health South (HLS). It provides inpatient rehabilitation services and operates facilities in 27 states and Puerto Rico. Most patients are age 65 and older. Recent stock price is $31.46. 52- week high/low is $33.73/$19.85. Market cap is $2.75 billion Net Profit margin is 3.08%
Universal Health Services (UHS) It owns and operates 23 acute care facilities and 197 behavioral health centers in 27 states, Washington, DC and Puerto Rico. Recent stock price is $67.75. 52- week low/high is $72.74/$39.64. Market cap is $6.65 billion Net Profit margin is 6.73%

Medical Equipment and Technology
Thoratec (THOR) It manufacturers heart replacement device mechanisms and circulatory products. Recent stock price is $35.73. 52- week high/low is $39.86/$29.91 Market cap is $2.06 billion Net Profit margin is 10.36%.
Masimo Corp (MASI) It develops and markets non-invasive patient monitoring products. Recent stock price is $24.74. 52- week high/low is $25.94/$19.03. Market cap is $1.40 billion Net Profit margin is 11.87%

Health Care Technology
CorVal (CRVL) It specializes in solutions for workman’s compensation cases. It works with employers, third party administrators, insurance companies and government agencies. Recent stock price is $32.94. 52- week high/low is $37.29/$20.16 Market cap is $697.63 million. Net Profit margin is 6.49%
Cerner Corp. (CERN) Its proprietary software provides solutions, services and devices aimed at eliminating waste, errors and variances for pharmaceutical and medical service companies. Recent stock price is $46.06. 52-week high/low is $50.85/$33.82. Market cap is $15.8 billion. Net Profit margin is 15.63%.

Hospital Supplies
Span-America Medical System (SPAN) It manufactures hospital supplies such as foam mattress overlays, patient positioners, seating and full protection equipment. Recent stock price is $21.08. 52-week high/low is $23.73/$16.40. Market cap is $62.24 million Net Profit Margin is 7.15%.

The above discussion is neither a recommendation to buy nor to sell these securities. You must always do your own diligent research.

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