The resounding electoral victory of Donald Trump in the US has translated into a clear rebound in American equities. There have been increases on Wall Street that were quite expected in the face of a Trump return: that of Tesla, due to the new and close friendship with Elon Musk; that of the oil companies, which the president-elect wants drilling day and night; that of corporations focused on cryptocurrencies (see the case of MicroStrategy) after the sympathies recently shown by Trump towards bitcoin and its peers; or the actions of Artificial Intelligence (AI) when the Republican candidate advocates for greater deregulation. However, the big surprise came from Henry Scheina leading global distributor of healthcare and dental materials.
The reason for Henry Schein’s rise is a bit strange and does not respond so much to Trump’s return as to his decision to appoint the always controversial Robert F. Kennedy Jr. as Secretary of Health. Famous for its position anti-vaccines and to spread hoaxes and falsehoods during the pandemic, the appointment of Kennedy Jr., who abandoned his own presidential race as an independent and ended up supporting Trump, has outraged the scientific community and has resulted in a significant correction in the shares of the American pharmaceutical sector.
His statements reside in the newspaper archive linking covid vaccines with autism in children or even considering the coronavirus as a biological weapon that would especially affect white and black people, with Jews and Chinese being immune, in their opinion. The nephew of the historic president John F. Kennedy, assassinated in the 60s, has also been shot repeatedly against 5G technologyaccusing her of causing serious damage to health.
However, his name has spurred those of Henry Schein. Because? Because the call to be a new representative of the US Department of Health has promised that will recommend municipalities remove fluoride from water supply. Public health officials say the widespread use of fluoride in the US water supply helps prevent tooth decay, especially in schools with children. Fluoride has been added to drinking water in the US since 1945. 25 other countries have water fluoridation programs, including Australia, Israel and Chile.
Faced with this new scenario, which has already become a reality in towns such as Winter Haven, Florida, where they have voted in favor of eliminating fluoride from drinking water, investors seem to be betting that the elimination of this element from drinking water could cause a increased cavities and increased need for dental health serviceswhich would help boost Henry Schein’s business.
While Kennedy will need to win Senate approval to take the job, market participants are already targeting a group of stocks that make dental hygiene products –Dentsply Sirona and Envista also, for example, as possible beneficiaries of their policies. This is because removing fluoride from water would actually put the dental cleaning industry in greater demand, as consumers would look for other ways to combat cavities, according to Gordon Haskett.
“The idea is that RFK gives the Department of Health a voice in favor of reducing or eliminating the amount of fluoridation that is added to drinking water,” Don Bilson, director of event-based research at Gordon Haskett, tells clients at a note from Monday. “This, in turn, will lead to an acceleration of tooth decay and more visits to the dentist.”
After Trump’s election, Henry Schein had barely risen 2%. However, after Kennedy’s name for the Health position was known, the titles rose more than 3% and 7% in the following two sessions respectively. Since the news broke, shares gain more than 15%. It is true that this percentage pales in comparison to the increases experienced, for example, by Tesla, but given the reason for the rebound, it can be considered more than generous.
However, despite the hopes raised around Kennedy’s anti-fluoride policy, the action has not completely enamored the consensus of analysts Bloomberg. Strategists estimate an average 12-month price target of $74, yielding a return of -3.7%. Of all these analysts who follow the title, five (38.5%) advise buying, another five maintain and three (23.1% sell).
A colossus of dental health
Henry Schein is an American distributor of healthcare products and services with presence in more than 30 countries. It is the world’s largest provider of healthcare products and services, primarily for office-based medical and dental professionals as well as alternative care facilities. Offers all types of products, from infection control products, handpieces, preventives, impression materials, composites, anesthetics and dental implants to vaccines, surgical products, diagnostic tests, infection control products and X-ray products .
Other services include practice management, business analysis, patient engagement and software patient demand, repair services and financial services. The company has a wide selection of more than 300,000 brand name products and Henry Schein corporate brand products through its major distribution centers. The US represents approximately 70% of its incomecollects the file of the listed company Bloomberg. Henry Schein’s healthcare products distribution segment accounts for nearly 95% of the company’s revenue and is divided into two smaller divisions: dental (representing about 60% of the segment’s revenue) and medical (more than 35% of the segment’s revenue). %).
In 1932Henry Schein, a graduate of Columbia University School of Pharmacy, borrowed $500 and opened a pharmacy in Queens, New York. Little by little, the company grew and in the 1960s expanded into dental supplies. By the late 1980s, Henry Schein already owned approximately 10% of the dental supplies market. In 1995, the firm went public. and began trading on the Nasdaq. A year later, the company had reached $1.4 billion in sales and $29 million in profits.
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