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Town Hall Tirades

Friday, 21 Aug 2009 | 5:37 PM ET

You can’t turn on the news without seeing footage of angry town hall meetings on healthcare. But should you bet on a rebound in HMO shares?

Opponents of reform have drowned out supporters at town halls around the country this month.

They contend a public option to create a government-run insurance plan to compete with those offered by the health insurance industry, would eventually lead to a single-payer, federal health care system. And that, they say, is un-American.

Town Hall Tirades Trade
Town halls are confronting Congress on health care reform, with the Fast Money crew.

The public ire has lawmakers such as Sen. Ben Nelson of Nebraska, a Democrat and potential swing vote, proceeding very carefully when approaching the issue.

However all the outcry may be more theater than anything else. And the performances may not be moving the audience that matters most.

House Speaker Nancy Pelosi declared yesterday that a government-run insurance option was essential, and she knocked down speculation that the House health-care bill might be watered down before it is brought to a vote, presumably in September.

"I don't know how you would scale it down," Pelosi (D., Calif.) said at a news conference in San Francisco. "There's no way I can pass a bill in the House of Representatives without a public option." The bill has passed out of three House committees, in each case including a public option.

And President Obama said on Friday, "we are willing to make compromises," but we’re not willing to give up on "core principles."

With all the rhetoric coming to a head, how should you trade health care?

I’d look beyond the HMOs, counsels Steve Grasso, there’s a lot of uncertainty in the space and who knows how events will play out. Instead, I’d look at Stryker , a medical technology company which makes equipment for joint surgery such as hip replacements and knee replacements. As baby boomers age Stryker should profit.

I like Stryker too, says Karen Finerman. The valuation is very cheap.

I think rival Zimmer is the better play, counters Guy Adami, but I like both.

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Trader disclosure: On Aug 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (BAC) Preferred Shares, Finerman Owns (BAC) Preferred Shares And (BAC); Finerman's Firm Owns (MSFT), (ARO), (WMT), (TGT); Finerman's Firm Is Short (USO); Finerman's Firm Owns (WFC) Preferred Shares And Is Short (WFC), Finerman Owns (WFC) Preferred Shares; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Grasso Owns (ASTM), (BAC), (C), (COST), (PRST), (V), (WMT), (FAZ), (AAPL); Terranova Owns (FCX), (BTU), (SU), (WFT), (AMZN), (MSFT); Terranova Is Short (CCL), (ESS)

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