Healthcare sector exchange traded funds (ETFs) are outpacing other markets and will continue to grow as concerns over untrustworthy valuations are decreasing due to rising profits. According to Eric Platt of the Financial Times, the aging population, specialized drug treatments, and consistent consolidation will continue to help health care stocks. Similarly, Dubravko Lakos-Bujas, equity strategist at J.P. Morgan, claims that healthcare is benefitting from strong demographic and secular trends. Barclays' strategists suggest that the biotech sector has been a major contributor to the earnings growth in the healthcare industry. Mergers and Acquisitions will also strengthen stock valuations, as consolidations have provided a floor on share prices.
Strong earnings for the industry will support healthcare's rising prices. Healthcare companies reported organic growth of all sectors, specifically 11% revenue growth and 22% earnings growth over the fourth quarter. S&P Capital IQ projects S&P 500 healthcare earnings per share to rise 8.9% in 2015 year-over-year.
Summary by MedicalGroups.com
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