We cling as much as possible to the reassuring notion that healthcare stocks are a good defensive play in a bear market. It’s just that the numbers aren’t always on our side. As of Friday, the CRG Healthcare 100 Stock Index was down 44% from its 52-week high. That’s worse that the Dow Industrials (-39%), Nasdaq Composite (-43%) and Standand & Poor’s 500 (-43%). The CRG 100 includes large cap healthcare stocks as well as a variety of small cap growth issues such as healthcare information technology stocks. Another measure, the Standard & Poor’s Healthcare Index, tells a somewhat different story. It’s still down 31% from its 52-week high, but it has outperformed the broader market.
If you’re thinking of trying to pick individual healthcare stocks instead of a healthcare stock index, things are even trickier. The biggest losers are a mixed bag of companies including lasik surgery provider LCA-Vision, drugstore chain Rite-Aid, wellness and disease management company Healthways, assisted living facilities operator Sunrise Senior Living, health plan WellCare, e-prescribing technology company Zix, and online healthcare information publisher WebMD. Not far behind are industry giants like UnitedHealth, WellPoint, Cigna, Merck, Schering-Plough, and Boston Scientific. Investments in any of the above would have you down anywhere from 50% to 91%.
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