INVESTING: Interest in Health Industry Plummets
It's official: a recent poll by Phoenix Lending Survey indicates that health care industry stocks are "unappealing to investors," the Business Journal of Portland reports. Sixty-nine percent of lenders surveyed named the health industry as the "least attractive" to their institutions, bumping "retail from the bottom of a list of 16 industries in which lenders would like to invest." The negative sentiment is up from 55% last quarter. Factors contributing to the decline include diminishing federal reimbursements and faltering physician practices (Brenneman, 10/4).
In other unwelcome news for the industry, a new analysis by HealthCare Markets Group found a share price decline of 2.8% for the first three quarters of 1999. The firm analyzed more than 1,000 public companies in 36 market segments. Since Jan.1, significant share price erosion occurred in the long term care (-65.7%), assisted living (-54.8%), hospital management (-46.7%), drug distribution (-37.9%) and practice management (-35.8%) segments. Coupled with minimal gains for the historically strong pharmaceutical segment (+1.7%), the erosions have "retarded industry share price appreciation." The Internet segment of the industry, which was added in the second quarter of 1999, grew by 92%. By comparison, share prices increased 1.9% in 1998, 10% in 1997, 2.7% in 1996 and 40.1% in 1995 (Healthcare Markets Group release, 10/4).