NEW YORK, March 31 /PRNewswire/ -- The country’s major pharmaceutical companies will not be at the top of the list of those benefiting from the overhaul of Medicare, the federal government’s health care program for seniors, according to Pax World Growth Fund (PXWGX) manager Paul Gulden. Instead, Gulden feels the winners will be from the less obvious areas of the healthcare sector, including pharmaceutical benefit managers (PBMs), generic drug makers and long-term care contractors.
The Pax World Growth Fund is a diversified growth mutual fund that uses both financial and social criteria in the selection of its investments. The Fund primarily seeks the growth of capital rather than current income. The Fund invests in the stock of companies that the portfolio managers believe have potential for above-average capital appreciation.
“I’m not focused on the major pharmaceuticals in my portfolio -- they are no longer great growth companies. They’re also political footballs,” said Gulden. “I’m more concerned with companies that will see faster growth in light of the current Medicare reform and the aging American population. The major pharmaceutical companies are not it.”
The sectors and companies Gulden sees are possible winners are: * Prescription benefit managers (PBMs). Companies such as Caremark, and ExpressScript are well managed, and have good quality distribution capabilities and record keeping, according to Gulden. These companies are primed to take on the additional pharmaceutical spending created by the Medicare bill. * Generic drug makers. Gulden cites generics manufacturer Eon Labs as a key company to profit from the reform. With Medicare recipients obligated to purchase more and more generic drugs in an effort to keep down prices, generic drug makers like Eon Labs will see growth. * Long-term care contractors. Gulden believes that companies like Select Medical will see increased profits as hospitals look to outsource extra space. Select Medical, Gulden explains, is not a brick-and-mortar itself, but instead, goes into existing acute care hospitals and subcontracts a wing to provide long-term care facilities, providing the hospital with steady income for otherwise empty beds while providing needed long-term care facilities for patients. ABOUT PAUL GULDEN
Paul Gulden has over 30 years of investment world experience. He is division head and CIO of H.G. Wellington Capital Management, which he joined in 1977. He was a senior portfolio manager and general partner at McMullen & Hard, and investment advisory and brokerage firm and earlier was an investment specialist at the Bank of New York.
ABOUT PAX WORLD FUNDS
Pax World Funds seek to enable persons of conscience to invest in keeping with their ethical values and to challenge corporations to establish and meet certain ethical standards. The Funds invest in companies that produce goods and services that improve the quality of life such as health care, technology, housing, food, education, pollution control, utilities, and leisure-time activities. The Funds do not invest in companies that make defense or weapons-related products or that derive revenue from the manufacture of tobacco, alcohol, or gambling products.
Pax World Funds are subject to market risks and are not insured. You may lose money. As of March 29, 2004, Caremark represented 2.64 percent, ExpressScript 1.47 percent, Eon Labs 3.91 percent, and Select Medical 2.57 percent of the Pax World Growth Fund’s portfolio. The Fund’s portfolio is subject to change.
You should consider a fund’s investment objectives, risks, and charges and expenses carefully before investing. For this and other important information, please obtain a fund prospectus by calling 1-800-767-1729 or visiting http://www.paxworld.com/. Please read it carefully before investing.
Pax World Management Corp. 222 State Street Portsmouth, NH 03801 Distributor: H.G. Wellington & Co., Inc. March 2004
Pax World Funds, Portsmouth, N.H.
CONTACT: Stephanie Kendall, +1-703-276-3254, orskendall@hastingsgroup.com, for Pax World Funds, Portsmouth, N.H.
Web site: http://www.paxworld.com/
