8 Healthcare Stocks to Sell


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There's a lot of talk this week about the healthcare sector and how these stocks could see a change in fortunes depending on Tuesday's midterm elections. The theory on Wall Street is that a shift towards the Republicans in the house or possibly even the Senate could erect serious roadblocks before previously passed healthcare legislation. Though the GOP may not have the votes to repeal the law, they can certainly cause trouble by denying funding and starving key elements of the legislation.

I'll leave the political analysis to Washington insiders, and I'll leave the election results to the voters on November 2. All that I can say with any certainty as a Wall Street expert is that many health care companies are hurting right now and no amount of change in the laws can add dollars to their bottom line fast enough to make them good short-term buys. Their operations, sales and profits are just not good enough to make them a part of a healthy portfolio - no matter what Election Day 2010 brings.

To keep you from getting into the wrong healthcare companies or sticking with some sickly stocks, here's my list of 8 big-name medical companies to sell immediately.

Sanofi-Aventis ( SNY )

Pharmaceutical group Sanofi-Aventis (NYSE: SNY ) develops, researches, manufactures and markets healthcare products.  Sanofi-Aventis offers a wide range of products dealing with diabetes, oncology, thrombosis, cardiovascular diseases and central nervous system diseases.  SNY has had an unimpressive 2010 thus far.  Year-to-date the stock is down -11.1% compared to gains of +6.5% and +6.1% for the Dow Jones and S&P 500.  SNY has also missed two of its last three earnings estimates.  At $35.02, SNY is a healthcare stock worth selling.

Medco Health Solutions Inc. ( MHS )

Medco Health Solutions (NYSE: MHS ) provides clinically-driven pharmacy services made to improve the quality of care and lower health care costs for private and public employers.  Medco also works with government agencies and labor unions.  Since January, MHS stock has slid -18.1%.  Trading at $52.42, MHS is far removed from its 52-week high of $66.94.  Sell this healthcare stock before it does any more damage to your portfolio.

Medtronic ( MDT )

Medical technology company Medtronic Inc. (NYSE: MDT ) researches, designs, develops and sell products to alleviate pain, restore health and extend life.  Year-to-date, MDT stock has lost -$8.49, or -19.3%.  Additionally, Medtronic reported a quarterly revenue growth of -4.1% year-over-year in its last income statement.  With a stock price of $35.48, MDT has a 52-week range of $30.80 to $46.66.

Baxter ( BAX )

Baxter International Inc. (NYSE: BAX ) is a developer, manufacturer, and marketer of products that deal with hemophilia, immune disorders, infectious diseases, kidney disease and trauma.  Since January, this health care stock is down -13.6%, compared to small gains by the broader markets.  The biggest drop in 2010 occurred in late April, when BAX stock plummeted -30% in one month.  Baxter International currently trades at $50.68, down from a 52-week high of $61.88.

Covidien ( COV )

Covidien PLC (NYSE: COV ) develops and manufactures healthcare products for clinical and home settings.  The company operates in three sections: medical devices, pharmaceuticals and medical supplies.  Year-to-date, COV stock has dropped -16.8%.  Even worse, the healthcare stock is down -22.5% since late April.  Analysts are bearish on Covidien, as they have dropped earnings estimates to $0.74, after a reported EPS of $0.85 last quarter.  Sell Covidien stock now, as it trades at $39.90.

Intuitive Surgical (ISRG)

Intuitive Surgical (NASDAQ: ISRG ) designs manufactures and markets surgical products and accessories, including endoscopes, dissectors, scalpels, forceps and other instruments.  Since the start of 2010, ISRG stock has slid -13.4%, compared to gains by the broader markets. ISRG is a very expensive stock, trading at $263.06, and is not far removed from its 52-week low of $243.10.  It should be noted that ISRG traded at nearly $400 in April.  Clearly, Intuitive is an expensive stock worth selling.

Zimmer Holdings (ZMH)

Zimmer Holdins Inc. (NYSE: ZMH ) is involved with the design, development, and marketing of orthopaedic reconstructive implants, dental implants, spinal implants and trauma products, among other products.  Zimmer markets its products in over 100 countries.  Year-to-date, this healthcare stock is down -19.5%.  Zimmer currently trades at $47.56, which is very close to its 52-week low of $46.27.

Gilead Sciences (GILD)

Biopharmaceutical company Gilead Sciences Inc. (NASDAQ: GILD ) discovers, develops and commercializes therapeutics in North America, Europe and Australia.  This healthcare stock has fallen -7.8% since January, and is down -18% since mid-February.  While GLD has rebounded slightly since September, it is still almost $10 removed from its 52-week high, with a stock price of $39.88.  Gilead is still a healthcare stock worthy of selling.

As of this writing, Louis Navellier did not own a position in any of the stocks named here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
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Louis Navellier

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