For many investors, the concept of putting money into healthcare stocks to sell them at a future date might seem like a safe investment. After all, almost every person in the United States is dependent upon the corporatized healthcare system in some way or another.
The only real exception to this paradigm is the U.S. military and its TRICARE insurance program for all of its servicemembers and their families.
As such, the common perception in the investment world is that healthcare stocks tend to represent more stable investments that have a higher likelihood of long-term growth and potential dividend yield.
Unfortunately, there are several healthcare companies currently struggling to stay afloat. This is due to changes in governmental decisions and a shift in the culture of major U.S. urban centers. From rampant theft, with no real prosecution in sight, to centralization of healthcare services amongst major oligopolies, these three companies represent healthcare stocks to sell in the event of a stock market crash.
Clover Health Investments (CLOV)
A relatively young healthcare corporation, Clover Health Investments (NASDAQ:CLOV) has struggled to capture revenue, according to its last earnings report, with a 44.31% loss of revenue for the quarter down to $506.21 million. The company has struggled to raise the necessary income to achieve profitability.
Its negative profit margin also expanded and its last quarterly earnings report decreased by 50.16% down to a margin of -13.92%. For such a small company, this level of loss could be catastrophic in the event of a market downturn.
Moreover, the company does not provide any critical services or products to consumers, rather, it attempts to streamline the healthcare provision process. It attempts to derive this from its flagship software platform, the Clover Assistant.
Thus, despite the company’s admirable goal of providing affordable healthcare through efficient healthcare plans, it does not currently present a stable or reputable investment opportunity.
CVS Health (CVS)
Drug stores across the U.S. are facing an epidemic of untamable theft, with CVS Health (NYSE:CVS) struggling the most. For whatever political reason, a lot of shoplifting has gone unprosecuted in some cities, specifically acts of theft under a certain threshold.
This has encouraged criminals to enter drugstores, steal whatever they please under that threshold, and then resell it either online or on a secondary market. At first, CVS and other drug stores attempted to dissuade this theft by locking more valuable items behind transparent display cases, and requiring an associate to come and help shoppers to pick out what they need.
However, this short-term solution impacts the shopping experience to the extent that drugstores are no longer attractive to the kind of clientele who spend enough to keep the stores open. Additionally, CVS has struggled financially, closing several stores across the U.S. This has caused its profit margins to dwindle.
Walgreens Boots Alliance (WBA)
Much like CVS and many other drug stores, Walgreens Boots Alliance (NASDAQ:WBA) is facing many of the same issues as its counterparts. However, the company has more to worry about than retail theft, considering the extensively negative coverage it has received due to its massive net losses of $5.9 billion in its last quarterly earnings report.
This loss is essentially a result of significant impairment charges due to the reduction in goodwill value of VillageMD, a company that WBA had acquired a two-thirds stake back in October 2021. This was initially intended to be an expansion for the company, but has since turned into a nightmare for investors.
Now, Walgreens has been forced to close a number of VillageMD clinics, in an attempt to cut costs and return to the path of profitability. As of right now, the company has posted a loss of $6.85 per share, making it one of the healthcare stocks to sell before the next earnings report.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
