When government gets deeply involved in industry, it helps some companies and hurts others. On the flipside, if government exits some aspect of the economy -- say, because of a Supreme Court ruling -- there will also be winners and losers.
Barrons breaks down the winners and losers of the different outcomes of the ObamaCare ruling due next week or the following week from SCOTUS.
For instance, some insurers like Aetna need the law to be upheld, as do Medicaid providers like Centene, and hospital companies like HCA, and, of course, drug companies like Merck. If the court strikes down the law, Barron's argues, you want to hold managed care stocks like WellPoint and United Health.
On the insurers:
Because the outcome is priced into the sector, at companies that stand to benefit from the law we see only modest rises in their stock prices. The stocks of commercial insurers like Aetna (ticker: AET) and Medicaid providers like Centene (CNC) might climb 2% or 3%, says Sarah James, a health-care analyst for Los Angeles-based Wedbush Securities. The law would funnel new, paying patients to both types of companies, including an estimated 18 million a year to Medicaid outfits.
I've written on how the drug industry benefitted from Obamacare, which it largely wrote, and how the hospital lobby and a major health insurer are siding with the administration in the Supreme Court case.
My prediction: if the law is upheld, many in the media will be surprised that health-care stocks aren't tanking.