Profiting from Obamacare: pain or gain for investors?

Profiting from Obamacare: pain or gain for investors?

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For the ire its inspired from corporate America, there are lots of people profiting from Obamacare.

Today the exchanges set up by President Obama’s new Affordable Care Act officially surpassed 6 million new enrolees — but there are still plenty of people trying to prevent its implementation. 

While these red-blue political squabbles have grabbed headlines, less visible conflicts are occuring behind the scenes in the boardrooms of big business.

Specific industries stand to suffer marginal losses, while others are projected to make gains due to having access to a much larger customer base.

More Pain Than Gain for Medical Devices

Because the ACA requires a new excise tax on medical equiptment that affects manufacturers and cuts into profits. Though the tax won't affect individual consumers, the medical device industry estimates that 33,000 jobs could be lost in the industry.

Companies like Covidien (COV) and Medtronic (MDT) reportedly paid millions of dollars in tax in 2013. Forbes said that the industry’s “primary lobbying goal” of that year was to repeal this tax, which will depress industry profits — before potentially lifting them in the long run.

Health Care Plans and New Tech: Winning

On the other hand, many industries have seen growth because of the law. Specifically, healthcare insurance companies like Aetna (AET) and Healthnet (HNT) have championed ACA because it’s created a veritable monsoon of new demand. 

Certain pharmaceuticals that were previously too expensive for most consumers may become more affordable, after which we may see an upsurge in both production and supply. Eric Dutram from Zacks reports that "the pharma sector could be a huge beneficiary."

That same report argues that other peripheral industries could benefit as well, for instance human resource consulting. Employers will need help as they seek to connect and assist consumers with their plans

Biotechnology, which usually grows along with the pharma industry has performed incredibly well this year.    

All in all, while the Affordable Care Act may still have a lot of unexpected effects on market forces, it’s likely that it will spawn a lot of growth and diversity as well.  

Here’s a list of several care companies that all seem to be in good health. We suggest you check them out –and then maybe get yourself checked out too: the deadline to enroll without a penalty is coming up.

Click on the interactive chart to view data over time. 

 Will health insurance companies continue to see big gains in 2014? Use the list below to begin your analysis.

1. Aetna Inc. (AET, Earnings, Analysts, Financials): Operates as a diversified health care benefits company in the United States. Market cap at $26.27B, most recent closing price at $71.80.

 

2. Unitedhealth Group, Inc. (UNH, Earnings, Analysts, Financials): Provides healthcare services in the United States. Market cap at $75.78B, most recent closing price at $76.01.

 

3. Magellan Health Services Inc. (MGLN, Earnings, Analysts, Financials): Provides managed behavioral healthcare, radiology benefits management, specialty pharmaceutical management, and Medicaid administration products and services in the United States. Market cap at $1.64B, most recent closing price at $60.62.

 

4. Humana Inc. (HUM, Earnings, Analysts, Financials): Humana Inc. offers various health and supplemental benefit plans in the United States. Market cap at $17.73B, most recent closing price at $113.69.

 

5. Health Net, Inc. (HNT, Earnings, Analysts, Financials): Provides managed health care services through its health plans and government-sponsored managed care plans. Market cap at $2.65B, most recent closing price at $33.33.

 

6. WellPoint Inc. (WLP, Earnings, Analysts, Financials): Operates as a health benefits company in the United States. Market cap at $27.5B, most recent closing price at $90.93.

 

 

(Written by Lucas Ropek. Monthly returns sourced from Zacks Investment Research, all other data sourced from Finviz.)

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