You can find investment ideas in the strangest places. Take Obamacare, for example. The legislation runs more than 900 pages long and is chock-full of government gobbledy-gook. But upon careful review, I have come to the conclusion that some parts of Obamacare can point us to some pretty good investing options. Here are three of the surprising ideas that I found.
1. Money where your mouth is
Are there spies watching your teeth? You might think so at first glance with the expanded National Oral Health Surveillance System included in Obamacare. Actually, the program focuses on collecting oral health data for establishing better public health policies. This is a great example of the federal government putting your money where your mouth is.
Is the federal government on to something by investing in oral health? Maybe so. One company that has made shareholders smile over the last few years is Align Technology, Inc. (NASDAQ:ALGN). Align’s shares are up nearly 57% over the past two years and have climbed 14% in 2013.
The company sells the Invisalign system that aligns teeth without traditional braces, as well as intra-oral scanners and other digital services supporting the dental market. Analysts expect Align Technology, Inc. (NASDAQ:ALGN) will grow earnings at an annual rate of 20% over the next five years — considerably higher than the 15.7% average for the industry.
2. How the 1% can make money for the 99%
Obamacare imposed billions of dollars in new taxes and fees on pharmaceutical companies — but not for the most expensive drugs of all. Orphan drugs, which treat rare diseases, are excluded from new fees. These orphan drugs often command sky-high prices. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)‘s Soliris, for example, costs $440,000 per year. In a real sense, orphan drugs are the pharmaceutical equivalent of “the 1%” disparaged by Occupy Wall Street. And Obamacare exempts this 1% from higher fees.
This special treatment could help those of us in the 99%, though. While Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)’s jaw-dropping near-500% run over the past five years has slowed down of late, there are plenty of other up-and-coming companies focusing on orphan drugs that could be great investment alternatives. Sarepta Therapeutics Inc (NASDAQ:SRPT), for example, is up 36% so far this year and still appears to have considerable potential.
Sarepta Therapeutics Inc (NASDAQ:SRPT)’s eteplirsen treats Duchenne muscular distrophy, a rare disease affecting only around one in 3,500 boys. Clinical studies for the drug have produced highly encouraging results. The company is currently considering pursuing accelerated approval with hopes to market eteplirsen more quickly.