Health Care Sector

1
Health Care Sector

• Zhuoying Wu
• Lin Yang
• Hai Zhang
• BUS-FIN 724/824
• Oct. 28, 2007

2
Agenda

• Overall view for the healthcare sector
• Healthcare in the past
• Healthcare in the future
• Recommendation

3
Health Care Sector

• The SP500 Health Care sector includes
• Healthcare Equipment and Services
• Healthcare Equipment and Supplies
• Healthcare Providers and Services
• Healthcare Technology
• Biotechnology, Pharmaceuticals, and Life Sciences
• Biotechnology
• Pharmaceuticals
• Life Sciences Tools and Sciences

4
Sector Overview
5
Healthcare Breakdown
6
Past

• Stock Performance
• Sector Performance

7
Healthcare Sector Performance

• 3 out of top 10
• 12 out of top 50

8
Top performing stocks SP500 for last 8 years

• COGNIZANT TECHNOLOGY SOLUTIONS 40 business
  software services
• CELGENE CORP /DE/ 40 biotechnology
• XTO ENERGY INC 39 independent oil gas
• GILEAD SCIENCES INC 36 biotechnology
• COVENTRY HEALTH CARE INC 36 health care plans
• PRECISION CASTPARTS CORP 33 metal fabrication
• CHESAPEAKE ENERGY CORP 33 independent oil gas
• FREEPORT MCMORAN COPPER GOLD 31 copper
• EXPRESS SCRIPTS INC 31 management services
• VALERO ENERGY CORP/TX 31 oil gas refining
• LABORATORY CORP OF AMERICA HOL 29 medical
  laboratories research
• UNITEDHEALTH GROUP INC 24 health care plans
• AETNA INC /PA/ 24 health care plans
• HUMANA INC 24 health care plans
• QUEST DIAGNOSTICS INC 24 medical
  laboratories research
• ST JUDE MEDICAL INC 23 medical appliances
  equipment
• VARIAN MEDICAL SYSTEMS INC 22 medical
  appliances equipment
• 49. STRYKER CORP 21 medical instruments
  supplies
• 50. BARR PHARMACEUTICALS INC 21 drugs generic

9
Healthcare Sector Performance

• Last 1 years
• Last 5 years
• Last 30 years
• Last 10 years vs. SP 500

10
Health Care Sector Performance
11
(No Transcript)
12
(No Transcript)
13
(No Transcript)
14
CPI health care
15
Future

• Interest rate
• Oil Price
• Government
• Future Expectation

16
Quick Survey

• How many of you think the Fed will cut interest
  rate?
• How many of you think the oil price will continue
  going up?

17
Interest rate
18
Oil Price
19
SP500 vs. Healthcare
20
More people retire
21
More total amount
22
If people are becoming poorer
23
Government

• http//www.whitehouse.gov/infocus/healthcare/
• SCHIP (State Childrens Health Insurance Program)
• Government will spend 35.5 B on that in 2007
• President Election

24
Healthcare Sector

• The sector performed well in the past.
• Currently the sector is at a low price level.
• The sector is less affected by uncertainty.
• We see the long term growth for Healthcare
  Sector.

25
SIM Current Holdings
26
Recommendations

• Maintain current SIM position
• (4.6 overweight)

27
Q A

• What question you have?