Outperforming the broader market, healthcare stocks as group did well last year, but what is in store for the sector this year?
The healthcare sector is unique as it is both secular and cyclical; the sector is secular because it is comprised of companies like Pfizer (NYSE:PFE), which develop medicines that must be prescribed and taken regardless of the economy, and cyclical because the production of treatments depend on governmental regulation and policy.
In 2013, stocks in the 540-company strong sector will face pressures from the still-recovering economy, but as Dan Hunt, a co-portfolio manager for the Allianz RCM Wellness Fund told The Street in November, companies have primarily gone through the big patent cliffs that dragged down revenues for many companies last year, and earnings have been re-based at a reasonable rate. Furthermore, the industry will benefit from the huge influx of 30 million new customers that will receive health insurance as a result of ObamaCare.
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