Ricky Goldwasser
Morgan Stanley
This sector is a safe haven in times of economic uncertainty, observes Morgan Stanley’s Ricky Goldwasser, who leaps from runner-up to second place. Any changes in health care coverage that may come about in the aftermath of the November U.S. elections will have little effect on the 14 names she covers, Goldwasser says, because the companies have scant exposure to government programs such as Medicaid and Medicare. Moreover, “the [pharmacy benefit manager] business model is focused on helping their customers bend the cost curve, which is a key priority for the health care system,” she adds. Goldwasser upgraded CVS Caremark Corp. from equal weight to overweight in November, at $37.61, dubbing the Woonsocket, Rhode Island–based PBM a likely beneficiary of a contract dispute between Walgreen Co. and Express Scripts Holding Co. over patient prescriptions, among other considerations. (That dispute was resolved in July.) CVS shares had zipped to $45.55 by the end of August, for a gain of 21.1 percent that led the sector by 6.3 percentage points. Goldwasser “plots and sizes all of the generic-drug impacts for her companies — this model is extremely helpful,” affirms one backer.