Is Obamacare Fueling More Buyouts?
Apparently, health care's 2014 buyout bonanza has not been limited to pharma, biotech, and medical device companies -- it's reached hospitals and insurers as well.
Ascension Health, the largest not-for-profit health system in the United States, is considering acquiring an insurance company, and according to an analyst with Leerink Partners (as first reported by Modern Healthcare), the two top targets could be Centene Corp or WellCare Health Plans .
What would make these companies attractive acquisition targets?
Obamacare. More specifically, the Medicaid expansion. Both stocks are plays on the expansion of government-funded health care, and each makes sense as a potential buyout target due to their exposure to these expanding markets. But there's still possibility for additional upside with both, because of the uneven expansion of Medicaid -- many states, including some with big concentrations of Centene and WellCare members, haven't expanded Medicaid.
In the video below, from Friday's Market Checkup, the Motley Fool's health care-focused investing show, health care analysts Michael Douglass and David Williamson discuss the rumored deal, why the stocks look like potentially attractive buyout targets, and the more general trends we're seeing in hospitals and insurers around Obamacare.
Will this stock be your next multi-bagger?
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.
The article Is Obamacare Fueling More Buyouts? originally appeared on Fool.com.David Williamson has no position in any stocks mentioned. Michael Douglass has no position in any stocks mentioned. The Motley Fool recommends WellPoint. The Motley Fool owns shares of WellPoint. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.