Hospital Stocks Continue to See Profit as Obamacare Expands Coverage
As the number of individuals covered by Obamacare continues to rise, so does the stock value of hospitals operating within the United States, according to Investor’s Business Daily.
The Medical-Hospitals industry group (a William O’Neil + Company Inc. proprietary classification of stocks into 197 groups) has reached the No. 10 spot out of 197, up from No. 32 three weeks ago, seeing a 28 percent gain this year.
Conflicting court rulings on the legality of subsidies that make health care more affordable for Obamacare patients so far seems to have had no negative effect on the stock group.
On Tuesday, July 22, two appeals courts split on the decision of whether the law’s premium subsidies are legal in 36 states. The D.C. Circuit Court of Appeals said the Affordable Care Act does not permit the IRS to distribute premium subsidies while the 4th Circuit Court of Appeals ruled that the IRS in fact does have the authority to issue the subsidies on federally run exchanges because of ambiguity in the law.
If the contradictory rulings persist, the case may be taken to the Supreme Court in 2016, if not earlier. But for now, several hospital stocks are being driven higher up amid a pickup of earnings growth.
Here are the top four hospital stocks with the highest earnings growth, according to IBD.
Universal Health Services (NYSE:UHS) announced a Q2 profit growth of 29 percent to $1.55 a share this week. The group has seen profit growth accelerated for two straight quarters and revenue has climbed 10 percent to reach $2.02 billion.
Universal rose further on Tuesday, July 29, climbing nearly 4 percent to a new high in the number of shares traded.
LifePoint Hospitals (NASDAQ:LPNT) reported a Q2 profit increase of 29 percent to 84 cents a share. Revenue additionally rose 17 percent to $1.05 billion.
Tenet Healthcare (NYSE:THC) has cleared a 50.35 optimal buy point and is 7 percent past the entry. The group’s Q2 results will be released after Aug. 4, once the market closes, with revenue expected to jump 63 percent to $3.94 billion.
HCA Holdings’ (NYSE:HCA) profit for the period is almost up 1 percent to 92 cents a share. Its revenue is expected to rise 6 percent to reach nearly $9 billion.
Bachem turns 50 - a timeline
Bachem, a supplier to pharmaceutical and biotechnology companies worldwide, is celebrating its 50th anniversary this month. We take a look at the Swiss company's history.
1971 - beginnings
Bachem is founded by entrepreneur Peter Grogg in Liestal, a small town near Basel in Switzerland. Grogg started the firm with just two employees, and with a focus on peptide synthesis - peptides are composed of amino acids that have a variety of functions treating health conditions such as cancer and diabetes.
1977 - 1981 - early growth
Bachem moves its headquarters to the Swiss town of Bubendorf, with eight employees. In 1978 the company produces peptides for use in medicines for the first time. In 1981 production capacity triples and the workforce grows to 150.
1987 - 1996 - worldwide expansion
The company expands into the US with Bachem Bioscience, Inc. in Philadelphia. To strengthen its presence in Europe, Bachem opens sales and marketing centres in Germany in 1988.
Further sales centres open in France in 1993. By 1995 the company employs 190 people. In 1996 it acquires the second largest manufacturer of peptides in the world and forms Bachem California with a site in Torrance.
1998 - 2003 - Bachem goes public
Bachem company goes public and lists shares on the Swiss Stock Exchange. Further acquisitions include Peninsula Laboratories, Inc, based in California, and Sochinaz SA, a Swiss-based manufacturer of active pharmaceutical ingredients. By 2001, the company has 500 employees and sales reach 141 million CHF.
In 2003 the organisation is given a new legal holding structure to support its continued growth, which remains in place to this day.
2007 - 2013 - acquisitions
Bachem acquires a brand by Merck Biosciences for ready-to-use clinical trial materials and related services.
In 2013, together with GlyTech, Inc. Bachem announces the development of a new amino acid that can help to treat multiple sclerosis, with a world market of more than $4 billion.
In 2015 it acquires the American Peptide Company (APC), which becomes integrated into Bachem Americas.
2016 - 2019 - a global leader
In 2016 the group opens a new building dedicated to R&D projects and small series production in Bubendorf. With a total of 1,022 employees, the workforce exceeds the 1,000 mark for the first time in the company’s history. Sales are over the 200 million mark for the first time at 236.5 million CHF.
Bachem expands into Asia with the establishment of a new company in Tokyo called Bachem Japan K.K.
By 2019 Bachem has a growing oligonucleotide portfolio - these are DNA molecules used in genetic testing, research, and forensics. It is hoped this will become a significant product range in the future.
2020 - COVID-19
Despite the COVID-19 pandemic, Bachem secures its supply of active ingredients, and even increases it in critical areas. Sales exceed the 400 million Swiss franc mark for the first time, and 272 new employees are hired.
2021 - a milestone anniversary
Bachem celebrates its 50th anniversary and position as a global leader in the manufacture of peptides. While it remains headquartered in Bubendorf, the company employs 1,500 people at six locations worldwide. In the next five years there are plans to continue expanding.
Commemorating the company's anniversary, Kuno Sommer, Chairman of the Board of Directors, said: "Bachem's exceptional success story from a small laboratory to a global market leader is closely linked to Peter Grogg's values, and has been shaped by innovation, consistent quality and cost awareness, as well as by entrepreneurial vision."