Global Healthcare Company Stock Picks By Serge Depatie Of Natcan Investment Management Inc.
November 16, 2009 - The Wall Street Transcript has just published Biotechnology Report offering a timely review of the Biotechnology sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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Serge Depatie is a vice president, portfolio manager and security analyst at Natcan Investment Management Inc., which he joined in 2003. Mr. Depatie began his investment career in 1999. From 1994 to 1999, he acted as Medical Products Development Director of CQI-Biomed and Marketing and Sales Vice President of Biosyntech. Before arriving at Natcan, he also worked for Hampton Securities and Jitney Group as Life Science Analyst. Mr. Depatie obtained an MBA degree from Concordia University and a BS degree in Engineering from McGill University.
TWST: Would you tell us some of the stocks that you have bought over the last six months and the reasons you've found them attractive?
Mr. Depatie: We bought Health Management Associates (HMA), on the hospital side. On the payor side, we bought Coventry Health Care (CVH), which was also showing very low valuations because of the political risk involved, but even in the worst-case scenarios we couldn't get to the valuation where we could see a downside. These stocks had gone from highs of $30 or $40 to lows of $8. These represented a good base opportunity as their client base haven't changed, nothing really in their base business had changed. Coventry Health is similar to Nobel Biocare in the dental area, which had been crushed by the consumer. These are dental implants, elective surgeries. That was bought in the last six months. Companies such as Amedisys (AMED) were also added in the last six months. Amedisys is a home healthcare company and there were a lot of discussions on reimbursement issues, but basic fundamentals of the industry are very beneficial to health care, because it's basically keeping people from the hospital and staying at home. We couldn't see the government shutting down that industry per se, so at discounted prices we took opportunities there.
TWST: I know that you have a specialty in the biotech area. Would you just give us some background on the outlook for biotechnology and segments like life science tools and diagnosis?
Mr. Depatie: If we start off on the biotech side, I think the FDA is also a very important player in this area depending on their willingness to accept new drugs or not. During the George Bush administration, I think the FDA was very conservative in its approach on evaluating drugs. That was the post-Vioxx area also, so we were still on that Vioxx backlash and we've seen in the last six months a turnaround, a more proactive approach on their part into studying new opportunities. That gives the investor a lot of confidence in investing in biotech. These product approvals have helped us gain confidence in the area. That's one aspect that's important and it's mostly emerging therapeutic areas such as obesity, as I discussed. We also have drug tampering, drugs in pain management, which the FDA is trying to control. Areas that are still important such as HIV, cancer is always a big area where it's highly competitive and there's still leaps and bound to be done in terms of the efficacy of drugs. These are medical needs that are not solved and there's always going to be a market for them.
SERGE DEPATIE
Natcan Investment Management Inc.
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