# Healthcare stock carnage



## CPA Candidate (Dec 15, 2013)

Shares of Concordia Health and Valeant are getting creamed today, along with small names like CRH and Knight Therapeutics. Not entirely sure of the reason but something to watch for opportunities.


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## bgc_fan (Apr 5, 2009)

CPA Candidate said:


> Shares of Concordia Health and Valeant are getting creamed today, along with small names like CRH and Knight Therapeutics. Not entirely sure of the reason but something to watch for opportunities.


You must have missed the whole Turin company that announced that they would increase their drug price by 5000%.

http://www.washingtonpost.com/news/...-think-martin-shkreli-is-a-rogue-ceo-he-isnt/

Because of that, Clinton announced some possible review of drug policy to control drug costs. Basically all the niche type drug companies are going to be caught as collateral damage.


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## humble_pie (Jun 7, 2009)

bgc_fan said:


> You must have missed the whole Turin company that announced that they would increase their drug price by 5000%.
> 
> http://www.washingtonpost.com/news/...-think-martin-shkreli-is-a-rogue-ceo-he-isnt/
> 
> Because of that, Clinton announced some possible review of drug policy to control drug costs. Basically all the niche type drug companies are going to be caught as collateral damage.




right now it's the black knights riding on orphan drug ponies that are getting slaughtered.

for this reason, valeant looks somewhat better off to my eyes. Its bigger bet is on penetration of middle eastern markets, not so much on orphan drug manufacture. Concordia looks more at risk.

but HC says clinton doesn't have a snowball's chance. At this point in time, HC is calling a trump presidency. Predatory orphan drug strategies should flourish in that scenario.


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## fatcat (Nov 11, 2009)

hilary is calling for a maximum of $250 per month in drug costs and that has set off a bunch of selling of healthcare stocks


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## Eder (Feb 16, 2011)

Hillary's idea won't fly in the States. Congress is more likely to support arming pharmacists than regulate drug prices.


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## GoldStone (Mar 6, 2011)

IMO, Hillary is just an excuse.

Healthcare is the best performing S&P 500 sector on most time frames:

http://news.morningstar.com/stockReturns/CapWtdSectorReturns.html

The sector enjoyed a very strong momentum before the correction. Many stocks got expensive. Short sellers love to target expensive momentum names when the strong momentum wanes.


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## humble_pie (Jun 7, 2009)

you don't think pharmacists in the US of A are armed?


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## fatcat (Nov 11, 2009)

pharmacies are often targets of robberies for drugs as much as cash so you can bet many of the small individually owned places in the south and midwest are going to be packing

not that there are many individually owned pharmacies left


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## GoldStone (Mar 6, 2011)

Another possible explanation for the sell-off:

Many healthcare stocks are hedge fund hotels. Valeant is a typical example. Hedge funds are selling to

(a) Bring down the leverage of their portfolios.
or/and
(b) Protect good YTD records, aka "protect the year" in the fund jargon.


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## Spudd (Oct 11, 2011)

humble_pie said:


> but HC says clinton doesn't have a snowball's chance. At this point in time, HC is calling a trump presidency. Predatory orphan drug strategies should flourish in that scenario.


What does HC stand for? I was thinking Hillary Clinton, but that can't be right based on the context.


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## londoncalling (Sep 17, 2011)

It's either Healthcare or Happy campers. :biggrin: You choose.


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## humble_pie (Jun 7, 2009)

Spudd said:


> What does HC stand for? I was thinking Hillary Clinton, but that can't be right based on the context.




it's haroldCrump of course. Keep in mind that HC is seldom wrong re the US of A.

for canadians, predictions of trump as pres south of the border should be terrifying, shocking, mind-boggling. Reagan had alzheimers during the last years of his reign, american voters keep fooling around with sarah palin & her likes, what would it matter whether we up here in canada elect a nice sober middle-of-the-roader like a PC or even an NDP? washington would rule.

trump is a nightmare. After such an election it will be 100% up to king Vlad whether peace will be kept in the world or not.

clinton or joe biden mean the west will keep its fighting chance, imho.


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## OhGreatGuru (May 24, 2009)

Concordia, Valeant and Knight Therapeutics are mainly pharmaceutical companies. Valeant precipitated the stock slide when their hedge-fund owners made obscene price increases in previously-cheap legacy drugs, prompting a lot of public, media, and political reaction. Concordia's business focuses a lot on manufacturing legacy pharmaceuticals and orphan drugs, so presumably the market thought "Gee, they could try the same trick and create the same political nightmare." Knight Pharmaceuticals probably just got caught in the same backwash. It's not clear to me why CRH should have been similarly affected, as their focus is on services and products for gastroenterolgy. They are slightly closer to being a real "Health Care" business as opposed to mainly pharmaceuticals. But the market is often irrational.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> for canadians, predictions of trump as pres south of the border should be terrifying, shocking, mind-boggling.


Trump is courting the bigot vote.
I highly doubt he will actually be able to do any of the things he's promising to the *truck drivers from Pigeon Forge
*
He's promising to kill NAFTA as well.
Regarding the drug pricing, both Trump & Mrs. Whitewater came out strongly against it.
Of course, the price increase was wrong.

But do Americans trust either Mrs. Whitewater or Trump to "fix" it?
Americans already rejected Mrs. Whitewater's health care plan way back in 1991.
She was told by her own caucus to shut up about health care and just focus on being pretty.
As for the latter, he is a vulture capitalist who will try and profit from everything.



> clinton or joe biden mean the west will keep its fighting chance, imho.


IMHO, the Democrat nomination is Biden's for the taking, if he wants it.
The banking lobby will back Biden over Mrs. Whitewater any day.
So far, their money has been on Mrs. Whitewater, but if/when Biden enters the race, they will switch loyalties.
Question is - whether Biden feels up to running for President after 8 yrs. as VP.
It'll mean a grueling campaign, followed by at least 4 years as President in a highly volatile world.
Does he feel up to it?


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## CPA Candidate (Dec 15, 2013)

CXR shares down hard again today and have now lost about 40% in the past 3 weeks or so. The only performing stocks in the TSX this year are getting hammered down.


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## CPA Candidate (Dec 15, 2013)

The largest market cap in Canada, VRX, is down 10% on the day as of this post. Wow.

Concordia down 20% today, CRH down 12%.

Edit: Apparently US Congress sent a subpoena to VRX to explain it's drug price increases this year on a couple products.


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## HaroldCrump (Jun 10, 2009)

Keep in mind that Concordia & VRX have been awesome performing stocks on the TSX last 2 - 3 years.
VRX has pretty much increased nearly 500% in last 5 yrs.
Anyone that bought any time in last 5 yrs has no reason to complain.


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## CPA Candidate (Dec 15, 2013)

HaroldCrump said:


> Keep in mind that Concordia & VRX have been awesome performing stocks on the TSX last 2 - 3 years.
> VRX has pretty much increased nearly 500% in last 5 yrs.
> Anyone that bought any time in last 5 yrs has no reason to complain.


Agree, but you are seeing the only leader on the TSX being destroyed. If you remove the effect of VRX on the TSX in the past couple of years, it has done much worse that it appears. I saw an article a month back saying without VRX, the TSX would be 12,500.

Right now the TSX is down over 2% while the dividend indexs are down about 1.2%. That's VRX weighing the entire market down.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> trump is a nightmare. After such an election it will be 100% up to king Vlad whether peace will be kept in the world or not.


Actually...on second thoughts, I think it's a lot greyer than that.
Trump is pragmatic.
He might establish a better relationship with Putin than Obama ever has.
*He has certainly indicated so publicly*....perhaps he is preparing the initial groundwork for a more amicable relationship with Russia, if he does get elected President of the US.

On the other hand, it is Mrs. Whitewater who is going around shooting herself in the foot & putting the foot in her mouth.
She has openly criticized Putin & Russia.
How dumb can she be to realize that any lasting solution in the Middle East *has* to involve Russia/Putin.

Now she has gone further & started dumping on China's President Xi Jinping, calling him "*shameless*"

This is not the way to go.

It is very clear which vote banks Trump is playing to, but what is Mrs. Whitewater playing to?

This is getting too far from healthcare stocks now...I will post the rest of my thoughts over on the Donald Trump thread.


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