Health care stocks, which have been volatile in the run-up to the 2020 elections, are worth consideration even in light of uncertainty about a single-payer system, an investor told Yahoo Finance.
Ben Phillips, chief investment officer at EventShares, sees value in health care — along with other government policy-sensitive sectors like gaming and energy — despite growing political pressures. While investors have been nervous about parking money in health stocks, Phillips said there’s still value in some pockets of the market.
“There’s skittishness around the institutional investors, so the money doesn’t want to be in health care right now” given growing political and regulatory risks, Phillips told “The Ticker” this week.
With Democratic contenders, such as Massachusetts Senator Elizabeth Warren and Vermont’s Bernie Sanders, pushing for a single-payer solution to soaring health care costs, Phillips called the health sector “oversold.”
He added: “That creates an opportunity, especially when people are just saying, ‘I want to be underweight in health care,’ Well, they sell the whole sector and so there are sub-sectors of health care that see really strong growth.”
Potential value include insurers and health tech — which recently saw a boost from the federal government’s willingness to reimburse for services provided through digital platforms, and managed care providers, Phillips said.
Insurance stocks saw steep declines after Warren pushed for doing away with the market and replacing it with a single-payer government system. Phillips suggested that might be a red herring.
“So if you see a Bernie Sanders or an Elizabeth Warren surge, that can create some opportunity for some health care companies, because we don’t think Obamacare is going away, we don’t think Medicare-for-All is a real likelihood either,” he told Yahoo Finance.
He also predicted “the return of earnings growth” to the broader market in 2020, after a year of investors chasing value stocks.
Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem