Five Highly Rated Healthcare Cost Containment Stocks

The accompanying table (click to enlarge) includes statistics along with the top five rated companies in the ETF Innovators (ETFI) Global Healthcare Cost Containment Index. The index includes generic drug companies such as Teva Pharma (TEVA) and Perrigo (PRGO) as well as pharmacy benefit managers such as Express Scripts (ESRX), which share the common theme of promoting the use of generics to lower healthcare costs.

The Top 40 Rated companies outpaced the overall market and benchmark healthcare ETFs over the past year with a loss of 11.5%, compared to losses of 27% for the Healthcare Sector SPDR (XLV), 26% for iShares S&P Global Healthcare (IXJ), 15% for PowerShares Dynamic Pharma (PJP), 24.5% for Pharma HOLDRs, 20.7% for iShares Dow Jones U.S. Pharma (IHE), and 41% for the S&P 500 SPDR (SPY).

The global distribution of companies in the index includes the following top five regions or nations: 27% from the United States, 24% from India, 18% from China, 16% from Europe, and 6% from Japan. The top five rated companies include Swiss generic drug maker Acino, pharmacy benefit managers SXC Health Solutions (SXCI) + MedcoHealth Solutions (MHS), retail drugstore + pharmacy benefit manager CVS Caremark (CVS), and TEVA.

Favorable growth trends for the generic drug industry include (1) nearly $70B in brand name drug sales with patent expirations through 2012, (2) a push to increase generic substitution rates from 65% of all prescriptions dispensed to over 70%, (3) continued industry consolidation of small and mid-caps by industry leaders such as TEVA and Mylan Labs (MYL), and (4) the potential for legislation next year regarding generic versions of high-cost biological agents, with Merck (MRK) recently announcing plans for a bio-generic division which will initially target Amgen's (AMGN) anemia drug Aranesp.

Comments

[Exchange:]

I believe these ETF's are closed to new investors. I tried calling the company that issues them, and the site said closed to new investors.

2008 Dec 30 07:24 AM

[TrophyDude:]

ETFs by their nature cannot be "closed to new investors". ETFs are traded just like stocks, indeed they are stocks. If you want to buy an ETF you can buy it as long as it is listed on an exchange. An ETF has to be listed on an exchange to be an ETF. Therefore no ETF can be "closed" unless it ceases to exist (ie. is delisted).



On Dec 30 07:24 AM Exchange wrote:

> I believe these ETF's are closed to new investors. I tried calling
> the company that issues them, and the site said closed to new investors.

2008 Dec 31 03:59 AM