There are few industries that are experiencing the enormous changes that are overtaking healthcare in the U.S. and around the world.
New technologies across the globe are changing the way we treat patients. New equipment means less invasive procedures and decreasing hospital recuperation. Also, new drugs and generics are transforming how we treat chronic conditions and rare diseases.
In the U.S., the Affordable Care Act is uprooting the bloated, convoluted healthcare system, for good or ill. How consumers pay for care, medicine and doctors visits is under total construction. How insurers, hospitals and doctors’ offices get paid is also undergoing a sea of change.
Change means opportunity, and the bigger the change, the bigger the opportunities — if you know where to look and what to look for.
The following three stocks are well-positioned to thrive in the new healthcare landscape with Obamacare.
Almost Family Inc (NASDAQ:AFAM)
Almost Family Inc (NASDAQ:AFAM) is a perfect example that is filling the growing gap between institutional care and home care.
Technology now allows people to have procedures done without the major trauma it took years ago. Recuperation now largely takes place at home, instead of a hospital, and home care is growing in demand.
AFAM is a leading provider of home health nursing, rehabilitation and personal care services, with over 250 locations in 15 states. AFAM works with Medicare in offering homecare, including almost any after care a patient may need including specialties like: Cardiocare, Orthopedics, Optimum Balance, B.R.E.A.T.H.E, Urology, Frail Elderly Care Management and Telehealth Monitoring.
AFAM’s earnings growth is impressive and should continue to surprise to the upside for some time to come. AFAM stock is up more than 70% in the past year, but its best years lie ahead.
McKesson Corporation (NYSE:MCK)
McKesson Corporation (NYSE:MCK) is in another fascinating niche, at least from an investing perspective. McKesson is kind of an infrastructure play in the healthcare/pharmaceutical sector.
Basically, MCK distributes pharmaceuticals at a retail level and provides health information technology, medical supplies and care management tools to professionals and retail outlets.
McKesson has been in the business in one form or the other since 1833. So, MCK has found a way to not only survive but build a business with a $52 billion market cap and more than $180 billion in annual sales, which is almost double sales three years ago.
MCK broadly diversified in the bowels of the healthcare sector few healthcare customers ever think about but are essential to the entire system. MCK is especially hooked into working with pharmacies, and pharmacies are major players in the new U.S. healthcare system whether Obamacare stands or falls.
McKesson stock is up 30% in the past year, but there’s plenty of room to run. MCK is now expanding into Europe as well, which should add to its sector dominating size.
Molina Healthcare, Inc. (NYSE:MOH)
Molina Healthcare, Inc. (NYSE:MOH) is another tightly focused company and the only one of this trio that is actually a healthcare insurer.
Molina is unique among insurers because it solely focuses on financially vulnerable clients that depend upon government healthcare systems like Medicaid and Medicare.
MOH contracts with state governments and serves as a health plan, providing healthcare services to families and individuals who qualify. MOH offers Medicaid plans in California, Florida, Illinois, Michigan, Ohio, New Mexico, Texas, Utah, Washington and Wisconsin and has five million members, and growing.
Obamacare has begun to enroll millions of uninsured and underinsured in recent years, and that trend will continue, even if Obamacare as we know it is scrapped. You can’t get the toothpaste back in the tube. These new healthcare subscribers will be on the rolls moving forward.
And MOH will be a prime beneficiary of this irreversible trend. Molina stock is up almost 70% in the past year. MOH stock hit a new 52-week high this week and Barclays just upgraded its short-term price to $70 a share from $66. Molina’s price-to-earnings ratio, but most analysts are still bullish, which means there’s plenty of room for MOH to grow.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.