Stupid Stock Move of the Day! Hospital stocks up?
June 11, 2012: 1:56 PM ET#StupidStock Move of the Day! $CYH up 6% on $C analyst upgrade. $HCA up too. But bet on hospitals BEFORE Supreme Court decision is risky.—
Paul R. La Monica (@LaMonicaBuzz) June 11, 2012
Sometimes there is no shame in waiting for an event to happen and then making an investment decision based on that. The looming Supreme Court decision on health care reform seems like one of those times. It's impossible to know just what the nine justices will do. The whole bill could be overturned. Parts of it could be upheld while others are struck down or neutered. It's a bit dizzying to think of all the permutations for investors.
With that in mind, I think investors would be wise to ignore the Citigroup upgrade of Community Health Systems (CYH), HCA (HCA) and several other hospital stocks. Hospitals, along with insurers like UnitedHealth (UNH), WellPoint (WLP) and Humana (HUM) could have the most to gain (or lose) depending on the outcome of the case.
Buying hospital stocks and other health care companies this week could turn out to be a prescient, lucrative move. Or it could be a disaster. Unless you want to worry yourself stick (hope you have good insurance!) about it, just sit back and wait for the decision.
