Want something to short? Check out this healthcare player
Today's Financial News - Posted January 8, 2009
All sorts of investors are look towards Obama to boost their portfolio. Unfortunately, the folks that have not done their homework will get burned.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): Investors across nearly every industry are looking towards President-elect Obama’s trillion-dollar stimulus for a near-immediate boost to their portfolio. Many of them are going to be severely disappointed in the next few months.
Obama’s stimulus proposal is filled with tax credits, accounting modifications and continuations of current tax laws set to expire. It has little in the way of direct financial stimulus to any industry, especially the healthcare industry.
The President-elect’s goal is to create jobs and reduce taxes in an effort to quickly revise consumer spending. In the short-term, his plan will boost infrastructure-related profits and create revenues for the nation’s “green” industries. But the money will not immediately flow through all sectors of the economy.
In fact, one of Obama’s favorite stomping points during his seemingly endless campaign was healthcare industry reform. It is widely know the Democrat wants to work towards a nationalized healthcare system.
Promises? What promises?
But now that revitalizing (or is it reviving?) the American economy has become top priority, the healthcare industry will be put on the back burner. The nation simply cannot afford the shockwaves of manipulating the financially vibrant sector. Unfortunately, many investors have not realized this point.
Take a look at Allscripts-Misys Healthcare Solutions (NASDAQ:MDRX), for instance. Profit-hungry investors are jumping all over this stock in hopes of getting in on Obama’s stimulus action. Unfortunately, they are making the plunge at a time when the stock is extremely vulnerable.
For investors willing to take on some speculation, this is a great opportunity to short sell shares of the stock. They could see strong profits as share price drops on any bad news.
If you are not willing to take on any unnecessary risk right now (I cannot blame you), keep a close eye on the stock’s action and be prepared to buy on any strong dips. Allscripts is a strong company with good products, but with its current share price of close to $9, is overvalued. Look to pick up shares in the $6 range.
Obama may be creating profit potential, but it is certainly not working out how he intends it to.
Next Article: Horrid unemployment and sweet, sweet gains
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January 9th, 2009 at 2:00 pm
A nationwide electronic health record initiative may very well create more jobs, and people seem to agree that the old paper-based system should be replaced by an electronic system that can get our doctors, nurses, therapists, and others working collaboratively.
The caveat? If these EHR initiatives layer technology on the current, broken healthcare system, the fundamental benefits will be wasted. Only with an interoperable, portable system that reaches all healthcare players will the new EHR deliver needed healthcare change.
More possibilities: http://www.healthcaretownhall.com