Health Care Stocks Plunge

The jury in Atlantic City awarded John McDarby $9 million in punitive damages in the Vioxx trial. The entire health care sector is feeling the pain.
Since mid-March, the health care sector has sold off sharply, and today is really bad. Here’s the Dow Health Care Index (^DJUSHC) versus the S&P 500 over the last 12 months.
HCR.bmp
Over the last three years, the S&P 500 is up about 50% while the drug index is off 10%. Of the majors, Johnson & Johnson (JNJ), Merck (MRK) and Bristol-Myers (BMY) have the lowest P/E ratios. They each trade at roughly 16 times earnings.

Posted by on April 11th, 2006 at 3:37 pm


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