Donald Trump’s resounding electoral victory in the United States resulted in a sharp rebound in American stocks. There were entirely expected increases on Wall Street in the face of Trump’s return: that of Tesla, due to the new and close friendship with Elon Musk; that of the oil companies, which the elected president wants to drill day and night; that of companies focused on cryptocurrencies (see the case of MicroStrategy) after the sympathies recently shown by Trump towards bitcoin and its peers; or the actions of Artificial Intelligence (AI) when the Republican candidate advocates greater deregulation. However, the big surprise came from Henri Scheinone of the world’s leading distributors of healthcare and dental materials.
The reason for Henry Schein’s ascension is a bit strange and doesn’t respond so much to Trump’s return as to his decision to nominate the ever-controversial Robert F. Kennedy Jr. as Secretary of Health. Famous for its position anti-vaccines and broadcast hoaxes and lies during the pandemic, the nomination of Kennedy Jr., who abandoned his own presidential run as an independent and ended up supporting Trump, outraged the scientific community and led to a significant correction in US pharmaceutical stocks.
His statements reside in the newspaper’s archives linking covid vaccines to autism in children or even consider the coronavirus as a biological weapon which would particularly affect whites and blacks, Jews and Chinese being, according to them, immune. The nephew of historic President John F. Kennedy, who was assassinated in the 1960s, was also shot several times. against 5G technologyaccusing him of causing serious harm to health.
His name, however, inspired those of Henry Schein. Because? Because the call to become a new representative of the US Department of Health promised that will recommend that municipalities remove fluoride from water supplies. Public health officials say the widespread use of fluoride in the U.S. water supply helps prevent tooth decay, especially in schools where children live. Fluoride has been added to drinking water in the United States since 1945. 25 other countries have water fluoridation programs, including Australia, Israel and Chile.
Faced with this new scenario, which has already become reality in cities like Winter Haven, Florida, where they voted in favor of eliminating fluoride from drinking water, investors seem to be betting that the elimination of this element drinking water could cause increased number of cavities and increased need for dental health serviceswhich would help boost Henry Schein’s business.
Although Kennedy will need Senate approval to accept the position, market players are already targeting a group of companies making dental hygiene products –Dentsply Sirona And Envista also, for example, as potential beneficiaries of their policies. Indeed, according to Gordon Haskett, eliminating fluoride in water would increase demand for the dental cleaning industry, as consumers would look for other ways to fight cavities.
“The idea is that RFK gives the Department of Health a voice in favor of reducing or eliminating the amount of fluoridation added to drinking water,” said Don Bilson, director of event research at Gordon Haskett, in a note from his clients. Monday. “This in turn will lead to accelerated tooth decay and more visits to the dentist.”
After Trump’s election, Henry Schein was barely up 2%. However, after Kennedy’s name for the health post became known, the stock rose more than 3% and 7%, respectively, in the next two sessions. Since the news broke, stocks gain more than 15%. It is true that this percentage is paltry compared to the increases experienced, for example, by Tesla, but given the reason for the rebound, it can be considered more than generous.
However, despite the hopes raised by Kennedy’s anti-fluoride policy, this action did not completely win over the public. analyst consensus Bloomberg. Strategists estimate a 12-month average price target of $74, yielding a -3.7% return. Among all those analysts following the stock, five (38.5%) advise to buy, five others to hold and three (23.1%) to sell.
A colossus of dental health
Henry Schein is an American distributor of healthcare products and services with presence in more than 30 countries. It is the world’s largest provider of healthcare products and services, primarily serving office-based medical and dental professionals as well as alternative care settings. Offers all types of products, from infection control products, handpieces, preventative products, impression materials, composites, anesthetics and dental implants to vaccines, surgical products, diagnostic tests , infection control products and x-ray products.
Other services include practice management, business analytics, patient engagement and software patient application, repair services and financial services. The Company offers a wide selection of more than 300,000 Henry Schein branded and branded products through its major distribution centers. The United States accounts for about 70% of its revenuecollects the file of the listed company Bloomberg. Henry Schein’s healthcare distribution segment accounts for nearly 95% of the company’s revenue and is divided into two smaller divisions: dental (accounting for approximately 60% of segment revenue) and medical (more than 35% of the segment’s turnover).
In 1932Henry Schein, a graduate of the Columbia University School of Pharmacy, borrowed $500 and opened a pharmacy in Queens, New York. Little by little, the company grew and, in the 1960s, expanded into dental supplies. By the end of the 1980s, Henry Schein already had around 10% of the dental supplies market. In 1995, the company went public. and began trading on the Nasdaq. A year later, the company had reached $1.4 billion in revenue and $29 million in profit.
