 |
| Dow | Nasdaq | About Us | Disclaimer |  |
RSS Feed |  |
Follow us on Twitter |
|
Featured Advisors |
Wednesday February 17, 2010
Fidelity Health: Offense and defense
By Jim Lowell, editor The Fidelity Investor
You know that this turn from a momentum-driven rally toward a fundamentally determined rebound is both right and right on cue. That doesn't mean that losses will be the rule, anymore than it means we can continue to expect exceptional gains. Instead, we're staring at a stall that shouldn't be conflated as a prediction for a dire fall. Instead, I think a 10% to 15% pullback is possible. 
We need to move from contraction to expansion: from layoffs, winnowing of inventory, raising cash in coffers to ensure stabilization toward budgeting for recovery based on more predictable sales with moderate pricing power accruing enough confidence to spend on technology, hires and growth. We've gotten what we were looking for n the stablization front. Now, we -- and the markets -- need to see sales and sales growth to move consistently and sustainable higher. We're not there, yet.
The fund began trading in July 1981 and has a market value of over $1.6 billion. The top three sectors are health care (93.4%), information technology (2.3%) and consumer staples (1.6%). The fund's top ten holdings are Pfizer, Covidien, Medco Health Solutions, Allergan, Express Scripts, Merck, Biogen Idec, Illumina, CR Bard and Cigna. In our view, this fund offers a smarter defense along with a better offense. I've touted the defensive nature of health care many times. Here is one way to encapsulate what I mean. Last year, the S&P 500 was down 112 days (out of a total of 252 trading days). on 75.9% of those down days, Fidelity Select Health Care lost less than the index. Over the past 10 years, the S&P 500 was down 1,202 days; on 67% of those days, Select Health Care loss less than the index. Put another way: over the past 10 years, Fidelity Health Care is up 43.7% versus a 20.3% loss for the S&P 500. We note that our stake in Fidelity Health Care isn't simply a pure-play in a lower risk sector of the market -- that just happens to account for 17% of our GDP. It also has stealthy global growth prospects thanks to the global consumer in growing economies from Latin America to the Pacific Rim. Learn more about this financial newsletter at Jim Lowell's The Fidelity Investor. |
News Flash
|
|
After one of the most remarkable market rallies since the Great Depression and on the heels of one of the worst market double dips, belief in better days has turned into a demand for proof of them.
Meanwhile, our latest Spotlight Fund is Fidelity Healthcare (