Massachusetts� special election today to fill the U.S. Senate seat vacated by the late Senator Ted Kennedy, pitting Republican Scott Brown against Democrat Martha Coakley could determine the fate of health-care reform legislation.
While Republicans last won a Massachusetts Senate seat in 1972, many news sources are indicating this race is too close to call. And a GOP victory in Massachusetts would end the Democrats’ 60-seat filibuster-proof majority in the Senate. With Brown vowing to cast the 41st vote against a legislation being hammered out in a House-Senate conference, today�s Bay State vote would also call attention to the unpopularity of the legislation and allow wavering party members to reverse their support.
But even if Brown wins, it�s unclear how long it might take for him actually to get sworn into office, according Lazard Capital Markets. The Democrats, meanwhile, could try to push through reform measures � most likely something akin to the Senate bill passed late last month � before Brown gets certified and sworn in, according to Les Funtleyder, healthcare strategist for Miller Tabak & Co.
For all this Shakespearean drama, Funtleyder argues that for many stocks, it doesn�t matter who wins the election since �momentum for healthcare reform has already slowed� drastically.
�Even if Coakley wins, the scope of potential reform has narrowed compared to prior expectations, lifting a big overhang on the sector,� he adds.
Funtleyder expects the most upside from managed-care names such as UnitedHealth Group (UNH) and pharmaceutical giants Merck (MRK) and Novartis (NVS).
Medical technology stocks, however, will fare better if the GOP�s Brown wins, according to Lazard analyst Sean Lavin. . Proposed reform legislation includes a �tax� on the medical device industry many investors worry will hurt profits.
Medical technology stocks to look at today: Abiomed (ABMD), Masimo (MASI), Conceptus (CPTS), Cyberonics (CYBX), and TomoTherapy (TOMO.)
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