14 Ways to Play the Flu Outbreak
If you've ever lived in Los Angeles like I have, every storm that comes ashore is the "worst storm ever." Every half inch of rain creates panic among drivers, and news stations with nothing better to do than spend almost their entire hour reporting on random flooded intersections and the inevitable person who somehow fell into the L.A. River.
Why am I bothering to hash up these memories? Because it seems every year the flu season begins sooner and sooner, and it's always "the worst flu season on record." According to the Los Angeles Times (how apropos) last week, 41 states have seen widespread flu outbreaks this season and the city of Boston has declared a public health emergency.
While I wish the flu on no one, and understand that flu-based illnesses can wreak havoc on the workplace in terms of lost production hours, there are quite a few very evident -- and also hidden -- benefits from an investment standpoint to the increased severity of the flu outbreak this year.
I believe the most evident beneficiaries are those companies involved in the production of flu vaccines and the businesses or hospitals that are administering those vaccines. In this case, I'm thinking about AstraZeneca-owned MedImmune with FluMist, Novartis' Fluvirin, Sanofi's Fluzone, and GlaxoSmithKline's Fluarix, which are annual vaccines given to persons either at high risk for flu-related complications or administered to those persons who choose to get a flu shot.
Hospitals and drugstores that are administering these shots should also see a surge in business. Large hospital operators like HCA Holdings would be expected to see a boost in revenue as more people visit the hospital with flu-related complications. For more proactive than reactive people, drugstores like Walgreen and CVS Caremark could clean up as the severity of this year's flu outbreak could necessitate consumers to rush in for a flu vaccination.
Over-the-counter and prescription drug solutions are less obvious winners, but they nonetheless should see an improvement in sales. Here I'm specifically thinking about Johnson & Johnson's fever reliever Tylenol, or Gilead Sciences flu symptom reliever Tamiflu, which is licensed to Roche.
Even further from the public's eye, but still beneficiaries from the flu season, are consumer products providers. If you're sick, you're going to go through a lot of tissues, which is great news for Kleenex brand owner Kimberly-Clark . Even something as simple as easy-to-make soups from Campbell Soup could take advantage of the old adage that "chicken soup can cure all."
If you want to delve even further into the obscure losers, I'd suggest that the flu outbreak could be a net negative for health insurers. More hospital visits should mean more claims, leading to higher costs for health-benefit providers like WellPoint and UnitedHealth Group . Alternately, as people see so many of their friends and family sick, the flu outbreak could create a surge in health-care enrollments, especially with the Affordable Care Act insurance mandate kicking in next year.
These are just some of the ways you can benefit from a flu outbreak. Feel free to add what companies you've been eyeing that I may have passed over in the comments section below.
But let's face it, if you're on the lookout for stocks that win over the long term, you have to think past a single year's flu season. It's one thing Motley Fool co-founder David Gardner does well, and his picks have frequently trounced the market. How? Because he's always on the lookout for revolutionary stocks and recommends them before Wall Street catches on to their disruptive potential. If you're interested in how David discovers his winners, click here to get instant access to a personal tour behind David's Supernova service.
The article 14 Ways to Play the Flu Outbreak originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of Johnson & Johnson and WellPoint. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson, Gilead Sciences, Kimberly-Clark, WellPoint, and UnitedHealth Group, as well as buying calls on Johnson & Johnson and creating a diagonal call position in UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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