Investors have had a rocky year. Stocks touched bear market territory within just a few weeks of hitting all-time highs back in February. While many names have been hit hard, a few sectors have been standouts in this market carnage.
One big performer here is the healthcare sector. These companies were generally laggards during the market’s big run over the past two years. Today, that’s reversing.
Health insurers also received notice that Medicare payment rates would increase. That’s providing a tailwind that could help these companies continue to outperform the overall market.
Among the health insurers, United Health (UNH). Shares trade at 17 times forward earnings, and the healthcare sector is an oligopoly with few players but high costs for new entrants.
Health insurers are slow-and-steady performers, which could take some of the sting out of current market volatility. United Health saw a 7% rise in revenues over the past year.
Action to take: Patient investors may like shares here. Shares are in an uptrend now, showing market leadership amid the current market chaos, and are likely to keep trending higher over time with less volatility than the overall market.
Today’s buyers can also nab a 1.6% dividend at today’s prices.
For traders, the June $600 calls, last trading for about $15.55, could see mid-double-digit returns from a further rally in the coming months. Traders may want to use any big pop in shares to take quick profits, given today’s volatile markets.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.