Health care stocks gain as reform falters

"Health care stocks lagged the broader market's recovery in 2009," Forbes reports.

"The possibility of a public option or any other legislation that might squeeze corporate profits 'scared the dickens out of people' in 2009, says Peter Tuz, president of money manager Chase Investment Counsel." But with the stalling of the legislation, fears have eased and "Tuz says there is a consensus that winners will emerge. ... Two types of companies seem to be screening well under the dozen or so indicators Chase uses in its preliminary screen: those directly tied to managing costs, like generic pharmaceutical firms, pharmacies and pharmacy benefit managers, and the managed care operators that have been severely limited by assumptions about the impact" of the health bills (Schaefer, 1/26).