Student Investment Management – Healthcare Sector

Transcript:Student Investment Management – Healthcare Sector:
Student Investment Management – Healthcare Sector Final Presentation S T U D E N T I N V E S T M E N T M A N A G E M E N T - H E A L T H C A R E 12/29/2016 Zach Janszen Andrew Jasen John Laliberte Agenda HCA Holdings 5 McKesson 8 Gilead Sciences Industry Overview & Current Performance 2 11 Investment Conclusion 17 S T U D E N T I N V E S T M E N T M A N A G E M E N T - P R E S E N T A T I 0 N O U T L I N E 1 Appendix 18 Medtronic 14 Industry Overview and Update 2 Sector overview and performance S T U D E N T I N V E S T M E N T M A N A G E M E N T - I N D U S T R Y O V E R V I E W 3rd largest sector in the S&P $1.7Tn revenues annually Over 13mm employees in the US 11.4% of SIM portfolio as of 11/22/2016 14% of S&P as of 11/22/2016 Healthcare verticals: Pharmaceuticals Biotechnology Supplies & Equipment Providers & Services Life Sciences Technology Sources: Kaiser Family Foundation; Bloomberg; Interesting buying opportunity Recent underperformance + Long-term outperformance + Depressed valuations due to uncertainty + Defensive fundamentals = Investment opportunities Industry Overview and Update 3 Industry investment thesis S T U D E N T I N V E S T M E N T M A N A G E M E N T - I N D U S T R Y O V E R V I E W Favorable Valuations Defensive, Inelastic Demand Favorable Demographics The two largest generations ever are the Baby Boomers (74.9 million) and the Millennials (75.4 million) Baby Boomers approaching peak healthcare consumption ages Millennials reaching childbearing years Natural low beta will protect against political uncertainty During economic downturns, people will still require medical aid and medicine to overcome illness Warranted valuation premium over time Industry is undervalued relative to the S&P on an earnings and enterprise basis SIM Portfolio Healthcare Exposure 4 Portfolio holdings and performance S T U D E N T I N V E S T M E N T M A N A G E