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How to Succeed in Healthcare Investing

Over the last couple years, the fate of healthcare stocks have been in question. With ample political turmoil surrounding the topic to give investors cold feet and the healthcare sector stock index turning up negative in 2016, reasons to avoid healthcare investing have not been in short supply. And the list goes on. Many investors have been steering clear of healthcare, but that doesn’t necessarily mean that that’s the only winning move in this economic climate.

 

Investing in healthcare can be a profitable exercise, if the investor knows what to do. Just as a physician assesses the state of a patient in order to determine the most appropriate treatment plan, an investor must know how to assess the state of a market in order to choose wisely in healthcare investment. In light of this analogy, let’s take a look at some considerations to make when approaching healthcare investing.

 

Check the vital signs

The first thing any doctor does when a patient comes through their door is check check their breathing, blood pressure, pulse and temperature. This exercise is a prerequisite to proceeding toward any kind of diagnosis. This will alert medical professionals of any previously undetected issues that may be more pressing than what was originally suspected. Once this simple but critical step is successfully cleared, the physician will proceed.

 

Similarly, when an investor is considering a healthcare stock to invest in, there are certain “vital signs” they should explore as prerequisites to see if the stock is a viable options, or if there are greater risks involved than anticipated. One investor, Brian Hennessey of Alpine Woods Capital Investors in Purchase, New York, reported that among the vitals he looks for are a solid balance sheets, reliable earnings drivers and healthy cash-flow. Good management and rights to intellectual property in the case of biotech and pharmaceutical companies are also big pluses, Hennessey says.

 

Pay attention to medical records

Doctors review medical records prior to even seeing the patient. They do this to gain an overall understanding of the patient’s medical history and current state. Doctors are able to compare the reports of medical issues with past problems. In some cases, they are able to identify correlations between the two and they can accordingly. A patient’s medical information is like to factor into the processes of diagnosis and treatment.

 

Similarly, investors should consider the “medical histories” of the companies they are considering for investment. Are they a big company with an extensive history of success or a start-up with not much history to go off of? This greatly influences the level of risk involved in investment. Even looking at records of the interaction between the company and their clients can be an indicator of the investment value of the company. Have they had longstanding contracts with clients or were contracts terminated quickly? Again, this can help to inform investment decisions before even getting into the minutia of crunching the numbers.

Select the treat with the most upside

Medical professionals have to make some difficult decisions. In some cases they have to make decisions that reconcile risk with upside. In other words, they may have to choose between a treatment option that is high risk/high reward and low risk/low reward. In the case of doctors, this sensitive decision will vary based on the circumstance. Ultimately, they are looking for the treatment that will secure the best quality of life for the patient.

 

While circumstances in investing will also vary, looking for investment options with an attractive upside is also a good rule of thumb. This decision may be the result of weighing several different factors including company track record and market position. Ultimately, the point is to look for companies that will be able to pay dividends in the foreseeable future. This will fall somewhere within the spectrum of high and low risk/reward scenarios. But as long as investors are on the lookout for promising upside, they should be on the right track.

 

There is no online training or book that can ensure success in resuscitating a stock portfolio through healthcare investing (although there is ACLS online training in the medical field). Still, there are some guidelines that can steer investors in the right general direction. And with the right information and a little luck, investors may find great success in the healthcare sector.

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3 Unique Industries to Invest In

The new year is often seen as a time of change or renewal. It is an opportunity to take a look at things in people’s lives or businesses and reevaluate them. One of the things you may take the time to look at and consider is your investments. There are new opportunities appearing all the time. Companies continue to release new products, government policies are enacted or updated, and industries evolve to match popular trends.

There are several industries with new developments on the horizon, and now might be the right time to invest in them. Here, we’ve gathered three industries to keep an eye on in the upcoming year:

Artificial Intelligence

Just a few years ago, “artificial intelligence” seemed like something that was only possible in science fiction series like Star Trek, Doctor Who, or maybe The Twilight Zone. Recently, however, several tech giants have started their own initiatives or formed partnerships in a serious effort to develop software that can think and make complex decisions on its own.

When investing in artificial intelligence, there are actually so many different initiatives in development that it’s necessary to narrow it down even further. For example, companies have already begun implementing in medical devices, mobile devices, and even cars as the race to create a self-driving vehicle continues. Two of the most popular devices sold this past Christmas were the Google Home and Amazon Echo smart speakers, both of which listen to user requests and attempt to interpret them in context. Meanwhile, the healthcare industry is predicted to grow faster than any other market in the field of AI in the near future, with AI being developed to help care for patients, enterprise imaging, and even discover new drugs.

Vaping/E-Cigarettes

Cigarettes and other traditional forms of tobacco have grown more and more unpopular over the years, and many smokers have been looking for an alternative. Many people have been turning to e-cigarettes and “vaping” as a different option, whether it is part of a lifestyle change or simply to avoid the stigma that traditional cigarettes bring with them. E-cigarettes and vape mods are battery-powered devices that hold cartridges of liquid nicotine, or “vape juice,” which the devices heat.

The industry has grown rapidly in recent years, with the number of retail outlets for these devices increasing to about 8,500 in April of 2016. According to an analysis from Wells Fargo, sales of the devices and supplies related to them got as high as $3.5 billion.

ESports

ESports, also known as competitive gaming, is a booming industry already, but in the next few years, it’s set to explode. According to research firm NewZoo, the eSports arena could surpass $1 billion dollars as soon as next year. Meanwhile, ESPN reported that there were 205 million people watching and playing eSports in 2014—enough that the eSports population would form the fifth largest country in the world, right behind Indonesia. Since then, the number has increased dramatically each year.

Streaming services like Twitch (owned by Amazon), YouTube, and Facebook Live have dedicated considerable resources to build up the eSports industry. Meanwhile, game developers like Blizzard, Valve, and Riot Games have promoted the competitive gaming scene by partnering with companies to hold world championship tournaments and even form complete leagues around their various products.

Traditional sports franchises have even begun investing in eSports. In September of 2016, the Philadelphia 76ers purchased a majority share in Team Dignitas. Meanwhile, that same week, Apex, a group which includes several NBA team owners as well as former NBA star Magic Johnson, purchased Team Liquid, a leading team across many different eSports.

Brands will also occasionally sponsor individual players, rather than teams. At the moment, professional gamers will seem to switch teams at the drop of a hat, and individual players carry more weight behind them than the teams they have joined. With upcoming initiatives like Blizzard Entertainment’s Overwatch League, an attempt to make the competitive scene of their popular Overwatch first-person shooter more like traditional sports leagues, that may change. In the system Blizzard has proposed, players would sign more formal contracts and receive a steady salary and benefits rather than depending on the winnings from each event to pay the bills.

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