Hopefully, our weeklong feature of the Cramerican Marine Field Guideto Recession helped yesterday, with the beating the market took. And speaking of beating, here's one dead horse that deserves it: healthcare, healthcare, healthcare. We can't stress it enough: it's the one bit of hope in this crazy market. There's less fear and uncertainty with healthcare stocks, causing the "volleyball rotation" being played out by money managers who are dropping out of other sectors and flowing into more stable and consistent one of healthcare.
Today's play from the Field Guide is Hospira , a firm that's opening up in many new markets, transforming itself from merely a (yawn) drug delivery/med management company to one with a quickly growing oncology business, yielding higher profit margins. But no one's paying attention! Maybe it did get a rough start after being spun off from Abbot in 2004, but it has since been a winner, with seven consecutive quarters of meeting or exceeding earnings forecasts.
Hospira's the number one maker of SIPs -- specialty injectable pharmaceuticals. Traditionally, it's focused on generics, and recently moved into oncology. Hospira is 17% of the SIPs market , which is worth $5.8B in the U.S. -- and it's about to take on the Japanese market as well. There, the government covers 85% of healthcare costs, so it's making a move towards more generics usage. Currently, only about 16% of meds sold in Japan are generics, compared to over 50% in the U.S. Japan's goal is to get to at least 30% generics. A company like Hospira is looking ready for an all-out invasion of Japan.