5 Best Healthcare Sector Investments Tips

Jane Miller |

Health care is a growing industry that doesn't show any signs of slowing down. If you haven't considered investing yet, now is a great time to start. Here are some important things to watch out for when investing in different health care companies.

Biotech

The market for biotech stock has been on the rise since about 2012 and just now has started to show signs of leveling off pretty soon. However, this is still a great opportunity to invest in carefully selected biotech companies that are creative and inventive when it comes to serving the aging population and people with chronic illnesses. Some examples of biotech companies that could be revolutionary include Sangamo BioSciences Inc. ($SGMO), Inovio Pharmaceuticals Inc. ($INO), and Argos Therapeutics Inc. ($ARGS).

Health Insurance

Compared to biotech stock, stock in health insurance companies remains more stable and is often a more reliable investment. However, since the US government is the number-one purchaser of health care services, politics affects health insurance stock. When Republicans are in power, health insurance stocks tend to do better, so the ideal time to invest would be just before a party change.

Health Care Facilities

Because of the national policy of the United States to accept any patient to an emergency room whether they can pay or not, hospitals with emergency rooms often suffer from debts and don't make for very reliable investments. However, competitive facilities for specialized health care that don't include emergency rooms are cropping up and could be worth investing in. Make sure to research the facility's cost control measures. Many health care facilities have yet to upgrade to a computer filing system, and this makes them less profitable.

Management

A health care facility's management is a major contributor to its profitability. For example, if a health care facility has an enterprising management team, they're more likely to upgrade their paper filing system to digital to increase efficiency. Some of the best-managed health care companies are ones you may have heard of: Cigna Corp ($CI), UnitedHealth Group Inc. ($UNH), and Aetna Inc. ($AET). These are big corporations, many of which have diversified to include insurance as well as health care services.

Nurse Practitioners

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https://farm4.staticflickr.com/3583/3373106750_2ddd4772d9.jpg

Image via Flickr by Walt Stoneburner

With the market for health care workers rapidly expanding, many states are passing legislation allowing nurse practitioners to work independently of physicians. After obtaining an online masters in nursing, nurse practitioners study even more to become advanced nurses. Hospitals that hire nurse practitioners save money while providing a level of care comparable to that of a physician. Nurse practitioners could be the future of medicine, especially when it comes to general practice, so it's worth investing in hospitals that take advantage of nurse practitioners.

The health care environment in the United States is changing, slowly but surely and for the better. Invest in companies that are keeping up with these changes and are ready to embrace the future of medicine. Look for companies with specialized facilities, forward-thinking management, and nurse practitioners on staff. They shouldn't be afraid to upgrade their technology, either, if they want your investment.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CI Cigna Corporation 136.20 -1.05 -0.77 296,893
UNH UnitedHealth Group Incorporated (DE) 157.22 -0.10 -0.06 1,117,605
INO Inovio Pharmaceuticals Inc. 7.04 -0.27 -3.69 294,907
AET Aetna Inc. 127.02 -1.53 -1.19 1,335,539
SGMO Sangamo BioSciences Inc. 2.83 -0.18 -5.83 390,356
ARGS Argos Therapeutics Inc. 4.89 0.14 2.95 30,236

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