NEW YORK |
NEW YORK (Reuters) - Investors could be excused for avoiding health insurance and hospital stocks as a U.S. Supreme Court decision nears on President Barack Obama's healthcare overhaul law - an outcome that could send the companies' shares down 10 percent or more.
Aside from an educated guess, little real analysis can predict a ruling that has at least a half-dozen possible results for a law that affects wide swathes of the healthcare industry.
"It's this never-never land," said Tim Nelson, a healthcare analyst with Nuveen Asset Management. "We're waiting for the clouds to clear, and we'll reassess what the fundamental environment looks like when we know what the rules are."
That has led some on Wall Street to devise complex strategies for profiting from the ruling expected by the end of the month - or at least to hedge their portfolios against significant losses.
They include spreading bets between healthcare sectors whose shares will respond in opposite directions based on a given ruling.
If the law is struck down, for example, stocks of hospital companies such as HCA Holdings Inc or Tenet Healthcare Corp and health insurers that specialize in Medicaid programs for the poor, like Centene Corp or Molina Healthcare Inc, are expected to suffer as they lose out on an expansion of coverage for at least 30 million uninsured Americans.
The same decision could boost shares of larger insurers like Aetna Inc or WellPoint Inc as they avert stricter regulations and higher costs mandated by the law.
CRT Capital Group, an institutional broker-dealer, said its clients were asking for ways to trade healthcare. It is recommending options strategies that amount to bullish bets on three stocks: UnitedHealth Group Inc, the largest and most diversified health insurer; HCA, the largest hospital chain; and rehabilitative services provider Healthsouth Corp.
"We expect that if you put all of these trades on collectively, you would end up making money regardless of the outcome," said Michael Khouw, head of equity derivatives for CRT Capital, noting that the strategy excludes any broader market moves.
Michael Gregory manages two healthcare funds for an investment firm affiliated with Highland Capital Management LP. He plans to keep equivalent positions in large health insurers, Medicaid insurers and hospital chains.
"We are trying to protect downside exposure in our positions and in the fund for any outcome of the Supreme Court decision," Gregory said.
WEIGHING THE POSSIBILITIES
The prevailing view before the court held oral arguments in late March was that the law - Obama's signature domestic policy achievement passed in 2010 - would be upheld.
But based on the tone of questioning from the high court's justices, investors and analysts project that it is more likely that they will overturn the provision at the heart of the law - a requirement that Americans buy health coverage or pay a penalty, known as the individual mandate.
On Intrade, a popular online betting site for political events, the latest contracts reflected a 70 percent chance the individual mandate would be ruled unconstitutional, up from trades in the mid-30s just before the oral arguments.
Striking down the mandate alone would spook investors in health insurers, because of fears people would buy insurance only when they become sick, driving up companies' costs.
Analysts believe, however, that the court would also shoot down associated provisions that require health insurers enroll people regardless of health status, a more palatable result for the insurance stocks.
Invalidating the entire law would likely hurt shares of hospital companies, which stand to increase the number of paying patients who otherwise might seek care for free. Some analysts estimate the stocks could fall as much as 10 percent.
Shares of Medicaid insurers also might drop 10 percent or more on the law's demise as they would not benefit from a planned expansion of the government-supported program.
But a decision that negates the whole legislation is expected to send shares of larger, more diversified insurers higher as they would stand to avoid such measures as government review of premium rate increases, requirements of spending on medical care and fees on the sector starting in 2014.
"You throw the whole thing out, the group is going to rally 5 to 10 percent," said David Heupel, a healthcare analyst with Thrivent Investment Management. "A lot of this money that we assumed was going away because of reform, managed care will get to keep."
FEASTING ON THE AFTERMATH
Citigroup analyst Carl McDonald, who covers health insurers, told clients recently that the best trading strategy into the decision is to hold an equal dollar amount of commercial insurers, which have large businesses serving employers, and Medicaid insurers.
Combining the probabilities of six possible decisions and their expected stock reactions should yield a return of 2.2 percent under his strategy, McDonald said in a research note.
Aside from UnitedHealth, commercial insurers that serve employers might include WellPoint, Aetna and Coventry Health Care Inc. Medicaid-focused insurers include Amerigroup Corp, Centene, Molina, and WellCare Health Plans Inc.
McDonald calculated that a strategy of holding only the commercial stocks would lead to returns of 2.9 percent, when all the probabilities are considered, but he was hesitant to back this plan because of the potential downside.
"We see ... two potential outcomes where the loss from being long just the commercial names could be 10-15 percent, which could occur if the Supreme Court surprised most observers and just struck the individual mandate," McDonald said.
It is the potential for such sharp declines - however remote - that will keep many long-term investors away from shares of insurers and hospital chains until after the ruling.
"It would take a pretty strong stomach to do it ahead of the decision," said Chris Konstantinos, a portfolio manager with Riverfront Investment Group. "I would be surprised to see the stocks bid up ahead of that."
Les Funtleyder, a portfolio manager at Miller Tabak, is banking on sharp reactions after the decision as a chance to scoop up his favored stocks, such as UnitedHealth or Community Health Systems Inc, the No. 2 U.S. hospital chain.
"Because we're long-term opportunistic investors, if there's an over-reaction, which we highly suspect there will be one way or the other, we'll likely take advantage of that," Funtleyder said. "You're talking about a trading event - at best a couple of days - and we're looking out for the future."
(Reporting by Lewis Krauskopf; editing by Michele Gershberg and Matthew Lewis)
Source: uk.reuters.com
London 2012 Olympics: former-drug cheat David Millar selected in Team GB cycling squad for Games - Daily Telegraph
As Brailsford said: “I wouldn’t presume anything about Dave Millar’s selection. There is no ‘given’ in that back-up team to Cav and Brad.”
Sir Chris Hoy welcomed Millar back into the GB Olympic fold but also took the opportunity of reiterating his implacable opposition to doping in sport. “I’m comfortable with whoever is selected for the team because they are eligible,” said Hoy, who will be competing in his fourth Olympics. It’s never been about an individual. It’s about the future and having a meaningful deterrent against people taking drugs.”
Hoy, as expected, was named in the three-man sprint squad along with Philip Hindes and Jason Kenny, but Brailsford and his coaching team will leave it much closer to competition day before making a final call between Hoy and Kenny in the individual sprint. “If you pick now you might not actually be picking the fastest guy,” Brailsford said.
Track (Sprint):
Philip Hindes (age 19: born: Krefeld, Germany)
Chris Hoy (36, Edinburgh)
Jason Kenny (24, Bolton)
Victoria Pendleton (31, Hitchin)
Jessica Varnish (21, Birmingham)
Track (Endurance):
Steven Burke (24, Burnley)
Edward Clancy (27, Barnsley)
Wendy Houvenaghel (37, Magherafelt)
Peter Kennaugh (22, Isle of Man)
Danielle King (21 born: Southampton)
Joanna Rowsell (age: 23 born: Carshalton)
Andrew Tennant (age: 25 born: Wolverhampton)
Geraint Thomas (age: 26 born: Cardiff)
Laura Trott (age: 19 born: Harlow)
BMX:
Liam Phillips (age: 23 born: Taunton)
Shanaze Reade (age: 23 born: Crewe)
Cross Country Mountain Biking:
Liam Killeen (age: 30 born: London)
Annie Last (age: 21 born: Nottingham)
Men’s Road (five to be selected):
Mark Cavendish (age: 27 born: Isle of Man)
Steve Cummings (age: 31 born: The Wirral)
Chris Froome (age: 27 born:Nairobi)
Jeremy Hunt (age: 38 born: Canada)
David Millar (age: 35 born: Malta)
Ian Stannard (age: 25 born: Chelmsford)
Ben Swift (age: 24 born: Rotherham)
Bradley Wiggins (age: 32 born: Ghent)
Women’s Road (four to be selected):
Lizzie Armitstead (age:23 born: Otley)
Nicole Cooke (age: 29 born: Wick)
Katie Colclough (age: 22 born: Grantham)
Sharon Laws (age 37 born Kenya)
Lucy Martin (age: 22 born Merseyside)
Emma Pooley (age 29 born: Wandsworth)
Source: www.telegraph.co.uk
London 2012 - Olympics hits home for Grainger - Yahoo! Eurosport
Even in the current climate of questionable selection policies it would have taken the keenest of imaginations to concoct a scenario where three-time Olympic silver medallist and nigh-on untouchable world No.1 Katherine Grainger could be overlooked for London 2012.
But despite her pre-eminence the Scottish rower admits it is a week which included a brush with the Olympic flame - and the much-expected rubber-stamping of her British spot for London 2012 - that has finally brought home the reality of a home Games.
If the sporting Gods - and the Edinburgh University Boat Club - hadn't intervened, Grainger could have been a fellow martial artist such as Aaron Cook, who has found himself in the middle of an almighty selection row in recent weeks.
Despite being ranked the world's best fighter at -80kg Cook, having been overlooked for selection in favour of Lutalo Muhammad, is most likely facing up to a legal battle to secure his Games participation.
In contrast Grainger's progress has been serene - indeed in the last two years, since an comparatively unsuccessful foray into the world of single sculling in 2009, she and double sculls partner Anna Watkins have barely broken sweat in going through successive seasons unbeaten.
That equilibrium was thrown slightly off course in a rare day off the water when Grainger took her turn with the Olympic flame in Glasgow last Friday.
And, while insistent she's exactly where she wants to be with London 2012 just around the corner, the 36-year-old admitted getting up close and personal with the torch brings with it a sense of trepidation.
Rowing redemption - in the shape of Olympic gold at the fourth time of asking - is Grainger's unequivocal London goal and she said: "It was an emotional moment holding the torch.
"Partly because of the chaos getting to hold it and rushing through the traffic to get there but also partly because when you hold it you think, this is it, this is the flame that's going to light the London Games in a few weeks time.
"It definitely brought the Games very close, a lot of the time when you are training you are away from the spotlight and it is in dark sweaty gyms or on windswept and rain-swept waters.
"So in a way you feel quite detached from the experience of an Olympic Games. We hear about it the whole time on the radio and TV and newspapers but when we go training day-to-day you still feel a little bit away from that.
"And then with a combination of the selection and the torch you suddenly realise that, one you're very much a part of this huge, massive ongoing building experience to what will be this greatest show on Earth and tow that we are now counting it in days.
"We have counted in years for a long time and then it was months, weeks and now it is days so it does feel like we are getting to the end now."
The end - London 2012 - for Grainger will be a career-defining moment regardless of the outcome. After three consecutive Games silvers Grainger has been vocal in her win or bust attitude towards the home Olympics.
And in carrying the torch the 36-year-old admitted she had a moment of clarity - realising just how all-encompassing the Olympics has been on her life.
"The flame and the torch is such a symbol of the Games so to actually be holding that means so much to me and my life," she added.
"London is something that I have been building to for seven years and to be honest the last 15 years of my life has been slightly defined by the Olympic Games.
"Last week was massive with both the official selection, although it wasn't a huge surprise, and carrying the torch.
"It wasn't whether or not we had been picked it's that big milestone that we are now officially part of Team GB.
"Although you know it's been coming for a long time it's the first moment when you know it's definitely going to happen and you're definitely going to be a part of it."
Source: uk.eurosport.yahoo.com
London world's most expensive city for Aussie travellers, TripAdvisor says - News.com.au
Partying in London is a pricey affair. Picture: Thinkstock Source: Supplied
Hanoi is the world's cheapest city for a night out. Picture: AAP Source: AAP
LONDON is the most expensive city for an evening out for Australian travellers, a cost comparison of the world's major cities shows.
The British capital tops the list in a cost comparison of an evening out for two people in key tourist cities around the world.
Hanoi offers the most affordable night out for travellers, with a total cost of $141.57.
At more than triple the cost of Hanoi, London topped the list as most expensive with a cost of $520.19.
Sydney ($393.61) was the ninth most expensive of the cities surveyed.
The TripAdvisor TripIndex is tracked against the Australian dollar and is based on the combined costs for two people of one night in a four-star hotel, cocktails, a two-course dinner with a bottle of wine, and taxi fares.
"TripIndex helps travellers to see where their pound goes the furthest,'' TripAdvisor spokeswoman Emma Shaw said.
"The list shows that many Asian cities, along with some European cities - like Warsaw and Sofia - are very affordable once you're on the ground.
"Some cities traditionally considered expensive - like London, Paris and New York - actually cost three times more than the cheaper cities in the list for an evening out.''
Hotel costs were the pivotal factor in determining the cheapest and most expensive cities on TripIndex.
The cheapest average hotel room goes to Bangkok at $81.35 a night, while the most expensive goes to London, at $362.68 a night.
South-East Asia featured heavily in the 10 cheapest destinations, claiming four cities in total, including Hanoi as the cheapest city. Bangkok, Kuala Lumpur and Jakarta ranked third, fifth and ninth.
TEN MOST EXPENSIVE CITIES
1. London
2. Oslo
3. Zurich
4. Paris
5. Stockholm
6. New York
7. Moscow
8. Copenhagen
9. Sydney
10. Singapore
TEN CHEAPEST CITIES
1. Hanoi
2. Beijing
3. Bangkok
4. Budapest
5. Kuala Lumpur
6. Warsaw
7. Taipei
8. Sofia
9. Jakarta
10. Tunis
Source: TripAdvisor
Source: www.news.com.au
You wouldn't want to Occupy this! The squalid conditions of protesters' London camp are revealed - Daily Mail
By Ian Garland
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A mountain of discarded roadsigns and shopping trolleys protects a makeshift camps of tattered tents.
Eight months after they first occupied Finsbury Square, in the heart of the City of London, the anti-capitalist protesters who have set up home there show no sign of waning.
As another eviction threat looms this week, the 20 to 30 protesters - London's last remaining Occupy outpost - have barricaded themselves into their squalid camp ready to defend themselves against the police.
Occupy protesters have barricaded themselves into their camp on Finsbury Square in the City of London
Before protesters were evicted from the neighbouring camp at St. Paul's Cathedral in February, Finsbury Square was used as an overspill.
It later became an 'eco village' where sustainable technologies were showcased.
But there was no sign of that today. The once pleasant park is now a barren, litter-strewn dump.
20-30 'protestors' remain at the Finsbury Square camp - eight months after it was first 'occupied'
Residents of the square are bracing themselves for an eviction attempt on Friday and have barricaded themselves in
Islington Borough Council moved in March to start eviction proceedings against the 'residents' of Finsbury Square.
The most recent stay of execution expires on Friday after Justice Hickinbottom ruled at the High Court last week that Islington Council has the right to repossess the public space.
Islington councillor Paul Convery insists the time has come to move the camp on - claiming many legitimate protesters have been replaced by vulnerable homeless people.
He told the Guardian: 'The council has said from the outset that we support the right to peaceful protest, and we have tolerated Occupy's presence at Finsbury Square since October.
'However, it is now apparent that the character of the protest has changed and Occupy's presence is significantly diminished. In the protesters' place, we now see a group of vulnerable and homeless people who would be better cared for elsewhere.'
At one time protesters used the square to showcase sustainable technology, but it is now a litter strewn dump
But Tom McCarthy, a resident at Finsbury Square, insists the camp serves an important purpose.
He wrote on the Occupy Finsbury Square blog: 'This camp makes a political statement about our society.
'Since Occupy opened the camp on 21 October, it has become a home and community for many homeless people, for whom the system has failed.
'In evicting this community, Islington Council – who have helped to re-home some people that have ticked certain boxes – are potentially leaving some people in a much worse position than they are already in.
'We ask Islington Council to not go down the same route at the City of London Corporation – cleansing the City of homeless people is not the way forward. Helping to find real solutions is.'
Islington Council claims the camp is now just occupied by vulnerable and homeless people
Banners erected on the camp still preach anti-capitalist slogans, despite claims by councillors the square has become a haven for the homeless
Islington Borough Council are keen to repossess the square so they can start fixing the damage caused by protesters
Source: www.dailymail.co.uk
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