As part of our recent Exclusive 70 page Biotechnology Report we spoke with David A. Katz and Steve Pisarkiewicz of Matrix Asset Advisors. Although they admit to being underweight in health care they have been adding some healthcare companies as of late;

Mr. Katz: On a relative basis, they are now starting to look a lot more attractive. The stocks we like are also businesses that are not going to be as punished by the Obama Administration’s healthcare program, but have been selling as if they were also damaged goods. So our focus has been on growing businesses that are not going to be dam­aged, yet we’re getting them at damaged prices. We’ve mentioned Zimmer earlier; another would be Genzyme (GENZ), which makes life-sav­ing drugs. Typically, ultra orphan products are fairly highly priced, but they save people’s lives. Genzyme’s a company that’s had some company-specific problems and manufac­turing problems and FDA issues, which has left it at about 14 times earnings, when normally it would sell north of 20 times earnings. We are confident that management has been beaten down so much that they are starting to do a better job. They will either produce, or market forces will move them to bring in a new management team. The price is simply too compelling. As we mentioned earlier, we’ve gone from significantly underweighted in healthcare to now underweighted, and our expectation is we will build some positions if the stocks remain at the current prices over the next few months.

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This entry was posted on Friday, October 23rd, 2009 at 10:04 am and is filed under Healthcare Stocks. You can follow any responses to this entry through the RSS 2.0 feed.