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Hospital investors sold on US health reform despite bumps

The Baltimore Sun / Reuters, June 20, 2013

CHICAGO (Reuters) - Shares of U.S. hospital operators have been on a tear this year, on average posting triple the gains of the broader stock market, as investors tallied up the benefits of President Barack Obama's healthcare reform. While some on Wall Street have held back amid signs of trouble as U.S. states prepare to implement the reform law, long-term investors still see more reward than risk on the horizon for hospital stocks. They expect company earnings to strengthen as more Americans gain insurance coverage and hospitals lose less money treating the uninsured. The reform law has spurred consolidation among hospitals, and further merger activity could lift valuations.