Robert F. Kennedy Jr. attends a campaign event for Republican presidential candidate and former US President Donald Trump in Milwaukee, Wisconsin, USA, on November 1, 2024.
Joel Ángel Juárez | Reuters
Dental care provider Henry Schein advanced in trading Monday as investors bet that Robert F. Kennedy Jr., President-elect Donald Trump's pick for secretary of Health and Human Services, could recommend removing fluoride from the U.S. water system. a move that would lead to a boom in dental visits.
Henry Schein shares rose about 7.5%, posting their best day since 2022. Fellow dental products makers Dentsply Sirona and Envista It also rose in the session.
Monday's moves come as investors brace for public health changes under a second Trump administration. Kennedy posted on
1 day chart
Fluoride has long been proven to be an effective method of fighting cavities. But the mineral has found itself at the center of a nationwide fight that has led some local communities to end programs focused on its insertion into public water.
While Kennedy will need to win Senate approval to take office, market participants are already focusing on a group 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 dental cleaning industry as consumers look elsewhere to fight cavities, according to firm Gordon Haskett.
A general view of the building of Henry Schein Inc., a distributor of healthcare products and services with a presence in 32 countries, photographed in Melville, New York.
Bruce Bennett | fake images
“The idea here is that RFK will bring to HHS a voice in favor of reducing or eliminating the amount of fluoridation being added to drinking water,” Don Bilson, head of event-based research at Gordon Haskett, told clients in a note. on Monday. “This, in turn, will lead to an acceleration of cavities and more visits to the dentist.”
Shares of Henry Schein rose in afternoon trading following a Reuters report that activist investor Ananym Capital was calling for changes at the company. The newly formed firm, led by Charlie Penner and Alex Silver, believes the board should be restructured and costs should be reduced, among other ideas.
Henry Schein and other stocks in the sector offer a bright spot within a sector that has largely struggled since the election. He Healthcare Select Sector SPDR Fund (XLV) has fallen more than 3% in November, putting it on track for its first three-month period of losses since last year. In comparison, the wide S&P 500 has risen more than 3% in the month.
Gordon Haskett's Bilson also noted that dental stocks were among the few health-focused stocks “saved” when 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 took a hit as traders braced for greater scrutiny of so-called junk food.
“It caused sell-offs across the healthcare landscape,” Bilson said of the decision to select Kennedy. “Drug manufacturers, contract research organizations, and health insurers felt the quake. Instead of stopping there, the damage spread to packaged foods. And to advertising.”
While the market appears to be moving ahead of Kennedy's nomination, Bilson said regulatory changes would likely take years to take effect. He also noted that drinking water should be more the responsibility of the Environmental Protection Agency than Health and Human Services.
