Health Management Associates Inc (HMA), Tenet Healthcare Corp (THC) Obamacare Delays: Investors in Healthcare Beware

Johnson & Johnson (NYSE:JNJ) is a leader in the medical services sector. The company’s earnings are driven by sales of prescription drugs and demand for its medical devices. Here, the only threat posed by Obamacare is the 2.3% medical device tax that went into effect this year. However, this tax has only had a marginal impact on Johnson & Johnson’s earnings.

The company’s second quarter results bear this out. Johnson & Johnson (NYSE:JNJ) reported higher-than-expected second-quarter earnings. This stems from strong sales of prescription drugs and medical devices. The company earned $3.8 billion, or $1.33 per share, and this beat expectations on the Street. However, the question remains as to how much higher the stock will climb. The share price has run up to about $90 so some profit taking may be on the way.

The Bottom Line

In the final analysis, Obamacare from a policy perspective has serious flaws and economic shortcomings. It is highly unlikely the law will be repealed, as some GOP lawmakers hope. But modifications are much needed. In the meantime, investors in the healthcare sector should proceed with caution.

The article Obamacare Delays: Investors in Healthcare Beware originally appeared on Fool.com.

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