Diagnose and Choose a Strong Health Care Stock

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Physician's Money Digest, March 2006, Volume 13, Issue 3

Over the past few years, health carestocks have been flatlining, due largely topublic mistrust of the health care industry.But Morningstar.com states that there'sstill money to be made in this highly profitableindustry, if you know what to lookfor. First, a successful firm will possess theability to churn out new innovative productsrepeatedly. Companies that can providethese products for unmet needs, passthrough clinical trials, and quickly receiveregulatory approval will consistently outperform.Second, a health care companythat diversifies itself successfully throughseveral product streams—including pharmaceuticals,medical devices, and biotechnology—proves that it can sustain itself inthe long run. Finally, a health care firm thathas established a strong sales and marketingforce will always outshine an upstartcompany that isn't able to get its messageout as quickly or as widespread.