Newspaper article THE JOURNAL RECORD
Stock Values Reflect Healthy Health Care Industry
In the anemic environment that prevailed on Wall Street in 1990, medical and drug stocks proved to be the best prescription for financial health.
At the same time, shares of bank and savings and loan holding companies dominated the market's sick list as the year drew to a close.
Most broad-based indicators of stock-price trends showed double-digit percentage losses for 1990 as of late December, turning in their poorest performances since the bear market of 1981-82.
Just 11 of 82 stock groups tracked by Dow Jones & Co.'s industry-group indexes posted gains for the year through the close of trading on Dec. 21.
Among the gainers, the medical and biotechnology group led the pack with an advance of better than 20 percent, followed by medical supplies, pharmaceutical manufacturers, health-care providers and retail drug chains.
The performance of these stocks testifies that health care remains a booming, though by no means trouble-free, business in the early 1990s.
While the nation debates what to do about soaring health costs and uneven distribution of medical services, many companies in the field continue to thrive as the population ages and seeks longer, healthier lives.
Technology and other innovation add an extra measure of opportunity, however risky in business terms, for venturesome health-care enterprises both large and small.
A just-published quarterly report by the Value Line Investment Survey on the medical supplies industry cites ``growing demand for health care, a decent pricing environment, and the entry of more high-margined products'' as major reasons for recent enthusiasm over stocks of this kind.
Even the gloomy outlook for the economy has worked in favor of health-care stocks, by encouraging investors to look for ``defensive'' issues that are insulated from the effects of a business slump. …