Dental care product provider Heinrich Schein rose in Monday trading as investors bet that Robert F. Kennedy Jr., President-elect Donald Trump's pick as Health and Human Services secretary, could recommend removing fluoride from the U.S. water system, a move that could lead on to a boom would result in dental visits.
Shares of Henry Schein rose about 7.5%, posting their best day since 2022. Co-makers of dental products Dentsply Sirona And Envista also rose within the meeting.
Monday's moves come as investors brace for public health changes under a second Trump administration. kennedy Posted on X ahead of this month's presidential election that a “Trump White House will advise all U.S. water systems to remove fluoride from public water.”
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Fluoride has long been proven to be an efficient strategy to combat tooth decay. But the mineral was in the middle of a nationwide fight This has led some local communities to discontinue programs that focused on feeding into public water supplies.
While Kennedy must seek Senate approval to take the job, market participants have already targeted a bunch of stocks that make dental hygiene products as potential beneficiaries of his policies. That's because removing fluoride from water would actually increase demand from the teeth-cleaning industry as consumers look elsewhere to combat tooth decay, in accordance with company Gordon Haskett.
“The idea here is that RFK will give HHS a voice in favor of reducing or eliminating the amount of fluoridation added to drinking water,” Don Bilson, Gordon Haskett's head of event-driven research, told clients in a Monday note. “This in turn will lead to an acceleration in tooth decay and more visits to the dentist.”
Shares of Henry Schein rose in afternoon trading after Reuters reported that activist investor Ananym Capital was an lively investor demands changes in the corporate. The newly formed company, led by Charlie Penner and Alex Silver, believes, amongst other things, that the board needs to be restructured and costs reduced.
Henry Schein and other stocks on this space offer a vibrant spot in a sector that has largely struggled because the election. The Health Care Select Sector SPDR Fund (XLV) fell greater than 3% in November, heading in the right direction for its first three-month losing streak since last yr. In comparison, the width S&P 500 is up greater than 3% for the month.
Gordon Haskett's Bilson also identified that dental stocks were among the many few “spared” health-focused stocks as investors reacted to the announcement of Kennedy's nomination last week. Pharmaceutical firms were under pressure as Kennedy is seen as a vaccine skeptic, while processed food stocks slumped as traders prepared for increased scrutiny of so-called junk foods.
“It has led to widespread sales across the health care industry,” Bilson said of the choice to decide on Kennedy. “Drug manufacturers, contract research organizations and health insurers all felt the quake. Instead of stopping there, the damage spread to packaged foods. And on the advertising.”
While the market appears to be moving in light of Kennedy's nomination, Bilson said regulatory changes would likely take years to take effect. He also noted that drinking water needs to be under the jurisdiction of the Environmental Protection Agency relatively than Health and Human Services.
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