Skip to main content

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

The health care sector offer stocks with strong balance sheets and reliable revenue growth driven in part by demographics.

Citi analyst Ralph Giacobbe believes his sector has fallen too much and offers investors strong opportunities for gain.

Story continues below advertisement

In Tuesday’s “Oversold and Underappreciated – Assessing Impact of COVID-19 Across Healthcare," Mr. Giacobbe wrote,

“We would highlight Pharma, Biotech, Managed Care, and Retail Pharmacies as the most attractive healthcare sectors at this time… we consider MedTech, Tools, Hospitals, and Labs as sectors that likely face earnings headwinds in 2Q and 3Q … we see the healthcare sector as an area that can help lead that rebound for a group that is largely trading at attractive and discounted valuation… we provide a selection of stocks across healthcare that we believe exhibit some combination of bellwether or strong market position with fundamental stability, healthy cash flow dynamics, in many cases a dividend, lower leverage profile, more limited direct COVID-19 risks, and balances both near-term risks and intermediate-to-longer term recovery.”

The stocks highlighted are Abbott Laboratories, Danaher Corp., Portola Pharmaceuticals Inc., AstraZeneca PLC, DexCom Inc., Roche Holding AG, Bio-rad Laboratories Inc., Ionis Pharmaceuticals Inc., UnitedHealth Group Inc., CVS Health Corp. and Neurocrine Biosciences Inc.

“ @SBarlow_ROB Citi finds these health care stocks 'Oversold and Underappreciated" – (research excerpt) Twitter


Financial Times columnist Peter Chatwell is concerned about an “illiquidity doom loop” centered on bond ETFs,

“At one point last week, [iShares core euro corporate bond- IEAC] was trading at a whopping 6 per cent discount to the value of its underlying assets — known as the net asset value, or NAV. If you were a holder trying to sell the ETF back then, you may not have been aware that you were also crystallising this discount to NAV on the ETF when selling. ETFs such as this may have low management costs, on the face of it, but the end investor also pays for the liquidity mismatch when buying or selling … such funds may get further detached from the assets they are designed to imitate … I call it a liquidity doom loop. And it occurs because bond markets have finite liquidity (as bond traders have to hold capital against their trading books), while ETFs do not (there is no capital charge for ETF traders). Thus, when bonds are suffering illiquidity, as they are in the current crisis, ETF selling can make the bond market illiquidity worse.”

“SBarlow_ROB FT is concerned about an ETF-centered 'liquidity doom loop'” – (excerpt, link to full paywalled story) Twitter

Story continues below advertisement


Also from Citi, strategist Hong Li screened U.S. stocks for defensively-positioned companies with the highest amount of cash on the balance sheet relative to debt.

I focused on the picks in health care – Regeneron Pharmacuetical , Intuitive Surgical Inc., and DexCom are featured – and the information technology list which includes F5 Networks Inc., Paypal Holdings Inc., Arista Networks inc. and Verisign Inc.


Diversion: “That Discomfort You’re Feeling Is Grief” – Harvard Business Review

Tweet of the Day:

Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you manage your health, your finances and your family life as Canada reopens.
Visit the hub
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies