Morningstar Advisor - October/November 2012 - (Page 30)

Sector Rap Health Care’s Outlook Clarifies By Philip Guziec Obamacare will benefit some sectors more than others, but poor economy and pricing pressures are the biggest challenges most health-care firms must face. When the U.S. Supreme Court upheld the individual mandate in a narrow ruling on June 28, a main hurdle for health-care reform was cleared, and with it, an uncertainty that hung over the sector. Now, health-care companies can focus on adapting to reform and overcoming their other challenges, such as pricing pressures, government cost-cutting, and the poor economy. To learn more about the outlook of the health-care sector, I sat down with Alex Morozov, director of the health-care analyst team at Morningstar, and Damien Conover, Morningstar’s director of pharmaceutical research. Our discussion took place Aug. 22. Philip Guziec: The big news over the summer in the health-care sector was the U.S. Supreme Court ruling on the Affordable Care Act, otherwise known as Obamacare. We also have an election coming up in November. What do these events mean for the health-care sector? Alex Morozov: The Supreme Court reaffirmed that the cornerstone of Obamacare—the individual mandate—is constitutional. We think that the ruling is the final chapter of the Obamacare debate. The November election could throw a wrinkle into the whole thing, but a perfect storm would have to occur for the Republicans to gain enough political advantage to repeal the act. In addition to winning the election for president, Republicans have to get filibuster-proof 30 Morningstar Advisor October/November 2012

Table of Contents for the Digital Edition of Morningstar Advisor - October/November 2012

Morningstar Advisor - October/November 2012
Letter From the Editor
Ill Communication
Do You Use Factor-Investing Strategies?
Practicing What She Preaches
How to Determine the True Price of ETFs
The Quant Factor
Managers Dispute the Death of Equities
Investments á la Carte
Investment Briefs
Five Inconvenient Truths of Manager Research
Health Care’s Outlook Clarifies
Exploring the World of Factors
Uncloaking the Alpha Machine
Factor Strategies Gain Footholds in Practices
Big Mo
Fitting Factors Into the Formula
Clients Have a Friend in Luther King
Less-Liquid Holdings Mean More-Solid Results
Retirement-Withdrawal Strategies Quantified
Amid Turmoil, Don’t Discount Foreign Equities
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
Should I Stay or Should I Go?

Morningstar Advisor - October/November 2012