The much anticipated Supreme Court Affordable Care Act ruling was announced today, and verdict was 6-3 in favor of ACA subsidies. While this left many opponents disappointed, investors cheered the news as healthcare stocks soared following the decision.
Since the passage of the Affordable Care Act, or Obamacare, the healthcare industry has experienced a boom and the nation is in the midst of a major healthcare buying spree. According to the non-partisan Centers for Medicare & Medicaid Services (CMS), spending on health care in America under current law will increase from $2.9 trillion or 17.3% of gross domestic product (GDP) in 2013 to $4.6 trillion in 2020. That means that healthcare spending will account for nearly a fifth of the nation’s GDP.
And like many on Wall Street, I’m all about taking advantage of this trend. In fact, one of my top hospital stocks, HCA Holdings, Inc. (HCA) greatly benefitted from today’s announcement and was up 9%.
HCA was one of the nation’s first hospital companies, with nearly 50 years in the business. The company currently owns 165 hospitals and 115 freestanding surgery centers in 20 states and the U.K. Today, nearly 5% of all U.S. inpatient care is provided by HCA facilities. With nearly 40 million inpatient stays in the United States each year, costing nearly $400 billion, that’s significant.
Right now, the aging American population is creating a surge in demand for healthcare services. And HCA has been staying at the top of its game by investing $1.5 billion each year to make its facilities as modern and cutting edge as possible. Last quarter alone, revenues climbed up 9.5% to $9.68 billion, and net income jumped 70% to $591 million.
HCA is currently rated a Strong Buy in Portfolio Grader, and now is a great time to buy in. And if you’re currently looking to diversify your portfolio with healthcare stocks here are some additional buying opportunities:
Just as a friendly reminder, Portfolio Grader is designed to supplement any investing strategy by providing you with the data to make informed investing decisions. If you’re really looking to kick healthcare investing into high gear, my Blue Chip Growth newsletter is chock full of premium healthcare plays.
If you’re interested in seeing a snapshot of my top stocks, you can try it out risk free by clicking here.