Kennedy Jr. attends a campaign event for Republican presidential candidate and former US President Donald Trump in Milwaukee, Wisconsin, US, November 1, 2024.
Joel Angel Juarez | Reuters
Dental care supplier Henry Shen Interest rates rose in Monday trading as investors bet that Robert F. Kennedy Jr., President-elect Donald Trump's pick for Health and Human Services secretary, could recommend removing fluoride from the U.S. water system, a move that would lead to a boom in dental visits. .
Shares of Henry Schein jumped about 7.5%, recording their best day since 2022. Fellow Dental Products Makers dentsply sirona and Investa It also rose during the session.
Monday's moves come as investors brace for public health changes under the second Trump administration. Kennedy posted on X ahead of this month's presidential election that “the 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 effective way to combat tooth decay. But the mineral has found itself at the center of a national battle that has prompted some communities to end programs focused on introducing it into public waters.
While Kennedy will need to win Senate confirmation to take office, market participants are already focusing on a group of stocks that make dental health products as potential beneficiaries of his policies. That's because removing fluoride from water would increase demand for the dental cleaning industry as consumers look elsewhere to fight tooth decay, according to Gordon Haskett.
General view of Henry Schein Inc. Which is building a distributor of healthcare products and services with a presence in 32 countries, as pictured in Melville, New York.
Bruce Bennett | Getty Images
“The idea here is that the RFK will bring to HHS a voice in favor of reducing or eliminating the amount of fluoridation that is added to drinking water,” Don Belson, head of event-driven research at Gordon Haskett, told clients in a news conference. Monday note. “This, in turn, will lead to accelerated tooth decay and more visits to the dentist.”
Shares of Henry Schein rose in afternoon trading after a report from Reuters that activist investor Ananym Capital was calling for changes at the company. The newly launched company, led by Charlie Penner and Alex Silver, believes the board should be restructured and costs cut, among other ideas.
Henry Schein and other stocks in this space offer a bright spot within a sector that has largely struggled since the election. the Healthcare Sector SPDR Fund (XLV) Its shares fell more than 3% in November, putting it on track for its first three-month loss since last year. In comparison, on a large scale Standard & Poor's 500 It rose more than 3% within a month.
Gordon Haskett's Belson also noted that dental stocks were among the few “bailout” health-focused stocks as investors responded to Kennedy's nomination announcement last week. Pharmaceutical names were under pressure given Kennedy's reputation as a vaccine skeptic, while processed food stocks were hit as traders braced for increased scrutiny of so-called junk food.
“It caused a massive sell-off in health care,” Belson said of the decision to select Kennedy. “Drug makers, contract research organizations, and health insurance companies all felt the tremor. Instead of stopping there, the damage extended to packaged foods and advertising.”
While the market appears to be moving on Kennedy's nomination, Belson said the regulatory changes will likely take years to take effect. He also noted that drinking water should fall more within the EPA's purview than Health and Human Services.
