Is Bernie Sanders a Threat to Healthcare Stocks?

UnitedHealth Group (NYSE:UNH) is the largest healthcare company in the world by revenue. Shares of UnitedHealth have plunged 15.9% over the past week as of close on February 27. The stock has been hit hard by the global stock market bloodbath, but there was another key development that kicked off its slide.

Democratic candidate Bernie Sanders rolled off a convincing win at the Nevada Caucuses on February 22. He scooped up 24 delegates from the contest compared to nine for Joe Biden and three for Pete Buttigieg. This contest established Sanders as the clear front-runner in the crowded race for the Democratic nominee.

Sanders is an advocate for Medicare-for-All, which would reduce the need for private MCOs. Other managed are stocks like Humana, Anthem, and Cigna Corp also suffered retreats after the Sanders win. The South Carolina primary will be the next key test. As it stands today, Joe Biden appears to be holding onto a lead in the polls, but Sanders has closed the gap.

Super Tuesday will follow the South Carolina primary on March 3. This momentous day will decide roughly one third of delegates in the primary.

By then, investors will get a great deal of clarity on how this race may shake out. Continued success by Bernie Sanders will make healthcare companies like UnitedHealth nervous. This is something investors need to keep in mind if they are considering buying the dip in healthcare stocks during this bloodbath.