Last week at this time, the Health Care sector was in the midst of a steep sell-off and in danger of giving up all of its outperformance relative to the S&P 500 from earlier in the year. Over the last week, though, the sector has seen what looks like a miraculous recovery. While the S&P 500 is up about 1.5% since last Thursday’s close, the S&P 500 Health Care sector is up more than four times that at 6.3%. This rebound for the sector has provided a big boost for its relative strength which rebounded right after giving up all of its prior gains relative to the S&P 500.
With the big rebound, a lot of stocks in the Health Care sector have seen some nice gains. On an equally-weighted basis, stocks in the sector have risen an average of 7.2% in the last week, and only two stocks are down! The table below lists the “lucky 13” stocks in the sector that have seen gains of more than 10% since last Thursday’s close. Leading the way higher, shares of Allergan (AGN) are up 23% after news surfaced overnight that it and Pfizer are in discussions about a possible merger. Tight on AGN’s heels, Endo International (ENDP) has been no slouch either rallying just under 21%. On the downside, the only two losers for the sector over the last week have been Stryker (SYK) and CR Bard (BCR), which have both seen modest declines.
Right now, it remains to be seen if the worries that have plagued the sector over the last month are now in the rearview mirror, but for a lot of hedge funds who have been overweight the Health Care sector lately, the last week has been a welcome respite.