Hedge Funds Are Buying 8 Rallying Healthcare Stocks Benefitting From Obamacare
Emily Smykal, Kapitall: The GOP may not be happy about it, but healthcare sure is – we found stocks benefitting from Obamacare.
So Congress is still dealing with the federal budget, the debt ceiling debate, even a few misplaced phone calls. But the Affordable Care Act, also known as Obamacare, is continuing to march steadily onward.
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Despite some glitches in the system, and overwhelming demand, President Obama's signature piece of legislation is bringing healthcare to millions of Americans across the country. And the healthcare sector is watching.
We already told you about some healthcare stocks that have been performing well despite the government shutdown, but now that Obamacare has had a few weeks to get on it's feet, how is the industry responding?
We decided to screen the healthcare sector for rallying stocks, which can trigger positive sentiments. Specifically we ran a screen for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages (MA), indicating that these stocks have strong upward momentum.
Next we limited our results to those healthcare stocks with 5-year projected earnings-per-share growth at 20% and above, a signal that investors see strong long-term growth potential.
For further confidence in our list, we turned to hedge funds (with a grain of salt of course). We screened these stocks for those experiencing significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these stocks to outperform in the future.
We were left with eight stocks on our list. For comparison, we included their individual performance over the last month and the last quarter, to see more specifically how these healthcare stocks may be responding to the Affordable Care Act.