While the U.S. federal government shutdown* continues to dominate media headlines, the Patient Protection and Affordable Care Act – better known as “Obamacare” – is likely to survive, even though a Republican-controlled House of Representatives vehemently opposes it.
While an agreement between the Republican and Democratic parties is surely on the horizon, the impasse in Washington is causing uncertainty for investors in the health care sector because of the potential cost-saving pressures the health care reform brings.
But it’s not all bad news. The key is to focus on companies that will remain unscathed by cost cuts: the ones with stable businesses, minimal debt, solid cash flow and a high return on invested capital.
I go into this in greater detail in a recent interview I had with Morningstar Canada, using two U.S. medical companies as examples: Becton, Dickinson and Co., and Express Scripts Holding Co.
Read the full article for more on why I believe these companies will be unaffected by Obamacare and how they are performing for Trimark Fund.
If any questions come up while you’re reading, please feel free to ask in the comment area below.
* This post was initially published on October 16, 2013, before the U.S. government resumed on October 17, 2013, and is no longer shutdown.
Note: The companies mentioned both above and in the article were selected for illustrative purposes only and are not intended to convey specific investment advice.
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