THQ: Watch Out For Declining NAV
Summary
- THQ's high distribution yield masks poor NAV performance; the fund is now reliant on return of capital, eroding long-term value.
- Shares trade at a premium due to yield-chasing, but underlying returns lag both the healthcare sector and broader market.
- Trump's new healthcare policies, including Medicaid cuts and drug price controls, pose significant headwinds for healthcare profitability.
- Given these structural and macro risks, I continue to rate THQ as an avoid/hold for long-term investors.
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