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Famed hedge fund manager Jim Chanos has added more names the list of health care companies he is short-selling.
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cnbc.com |
Changes coming to the industry, primarily through the possibility of a national health insurance plan but also because of maximized profit margins, will pressure a variety of companies, he said.
"Our view on the health care sector is that it's facing headwinds whether there's a legislative answer or not," Chanos, president and founder of Kynikos Associates, said in a live interview with CNBC. "We think from a regulatory point of view as well as a competitive point of view, profit margins are going down."
Among the companies on Chanos' short list is AstraZeneca [AZN
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], the London-based pharmaceutical company that Chanos says faces stiff competition from generic drugs.
Also on his list are capital equipment and staffing companies as well as Siemens [SI
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], the Munich-based engineering company.
Staffing companies, he said, face pressure because of regulatory problems.
Chanos has said previously that he was down on some of the health care names, but expanded the list on a belief that profit margins in the sector, which he said is at as much as three-times that of the Standard & Poor's 500, are due to shrink.
He spoke just hours before President Obama is set to deliver what could be his final address on health care reform.
Chanos said the president has yet to put a concrete plan forward, adding that containing costs should be the top priority.
"Health care valuations are already there and we can't get much bigger," he said. "This system is ... so bloated it's going to start bankrupting all kinds of entities, not just business but the government. So we've got to get costs under control."
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