Senate Democrats came to an agreement on Tuesday to replace the controversial government-run public insurance option with a scaled-back non-profit plan. So which companies in the health care sector are worth investing in? John Sullivan, director of research and health care investment strategist at Leerink Swann, shared his insight.
“The landscape is becoming clearer,” Sullivan told CNBC.
“Health care reform is within a few months of being resolved and, as it is, investors are coming back to the health care sector. At the current valuations of the health care sector, you can definitely pick winners and losers, even as health care reform is not completely reformed.”
Sullivan said health care stocks have been underowned, and investors will likely return to the larger companies with a lot of liquidity.
“Both Pfizer and Merck, coming off of big acquisitions, are very much in charge of their own earnings over the next couple of years as they implement cross-control initiatives. Investors will be very comfortable with what they see in U.S. drug company earnings over the next several quarters,” he said.
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In the past 12 months, Sullivan’s firm has received compensation for providing non-securities services to Pfizer.