Health Care Sector no. 2

If USA moves towards a financial crisis it will bring down other sectors too and most likely spread over the world. Due to the increase in nervous behavior on the stock market it could be justified to increase exposure towards "stable" sectors such as Health Care.

The Health Care sector can be divided into three main categories:

1. Big pharmaceuptical companies such as AstraZeneca, Johnson&Johnson, Novartis, etc. They are profitable but with a modest-low growth. They have difficulties in taking projects to the market. Main focus are to cut costs.
2. Research & Development companies such as Genmab and Alk-Abello. The Nordic stock market have approx. 50 companies with an estimated market value of SEK50 billion. Losses in 2006 were SEK2 billion but will be reduced by half in 2007. Genmab and Alk-Abello accounts for approx. SEK35 billion. They are at the forefront and have announced agreements with Glaxo Smith Kline and Schering-Plough. This type of agreements will increase and create opportunities.
3. Medical Industry & Health Care are a third group. Have stronger growth but similar low risk profile. Nordic stocks can be divided into three subgroups: Medical Equipment (Elekta, Getinge), Medical Articles (Coloplast, Ambu), and Consumer products (Nobel Biocare, Q-Med, William Demant)

Patrik