Health insurers score after Sanders falters on Super Tuesday
Biden’s Super Tuesday performance is a “clear incremental positive' for health insurers
Health care stocks surged Wednesday as former Vice President Joe Biden cemented his frontrunner status following a surprisingly strong showing on Super Tuesday.
UnitedHealth Group gained 10 percent, boosting the Dow Jones Industrial Average by about 200 points, while rivals Centene Corp., Cigna Corp., Anthem Inc. and Humana gained as much as 15 percent.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UNH | UNITEDHEALTH GROUP INC. | 590.78 | -6.49 | -1.09% |
| CNC | CENTENE CORP. | 60.37 | +0.02 | +0.03% |
| CI | THE CIGNA GROUP | 328.45 | -1.62 | -0.49% |
| ANTM | NO DATA AVAILABLE | - | - | - |
| HUM | HUMANA INC. | 298.48 | +2.63 | +0.89% |
Biden’s string of victories is a “clear incremental positive for the managed care sector, which we still believe will trade in inverse correlation to Sanders’s nomination odds,” wrote J.P. Morgan analyst Gary Taylor. Sanders’s odds of winning the nomination dropped to 19 percent on Wednesday from 57 percent just two days prior, according to the online betting site PredictIt.
With votes still being counted, Biden had secured 453 delegates in the single-day marathon of primaries, topping the 382 delegates won by Sen. Bernie Sanders, I-Vt., the self-declared democratic socialist who has run on a platform that includes Medicare-for-all.
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His proposal would create a government-subsidized national healthcare system that eliminates networks, premiums and deductibles while capping what Americans pay for prescription drugs.
Sanders' ascent in the polls had hammered managed-care providers before Super Tuesday, with the iShares U.S. Healthcare Providers exchange-traded fund falling 9.1 percent this year, underperforming the S&P 500.
On Wednesday, the S&P's healthcare sector climbed 3.9 percent.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| IHF | ISHARES TRUST U.S. HEALTHCARE PROV ETF | 53.30 | -0.12 | -0.22% |
“We believe a Trump re-election, any other Democrat winning the White House or Republicans retaining control of the Senate would all prove to be a positive catalyst for the sector,” Taylor wrote.
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His top picks for the sector include Humana and UnitedHealth. Centene is his favorite value pick.