Henry Schein, a provider of dental treatment, had a surge in Monday trade as investors placed bets that Robert F. Kennedy Jr., the president-elect Donald Trump’s choice for secretary of health and human services, may suggest eliminating fluoride from the American water supply, which would result in a spike in dental visits.
Henry Schein’s stock increased by about 5%, setting it up for its highest day since July. Envista and Dentsply Sirona, two other manufacturers of dental products, also saw an increase in the session.
Investors are preparing for changes in public health during a second Trump administration, which is why Monday’s actions occurred. Before the presidential election this month, Kennedy wrote on X that the Trump White House will recommend that all U.S. water systems eliminate fluoride from public water.
Fluoride has long been demonstrated to be a successful cavity prevention strategy. However, the mineral has been the focus of a national controversy, which has caused several localities to discontinue initiatives aimed at introducing it into public water.
Market players are already focusing on a group of companies that produce oral hygiene goods as possible benefactors of Kennedy’s policy, even though he will require Senate confirmation to occupy the position. This is because, according to company Gordon Haskett, removing fluoride from water would actually increase demand for teeth cleaning products as customers hunt for alternative ways to prevent cavities.
Gordon Haskett’s head of event-driven research, Don Bilson, wrote to clients on Monday, “The idea is that RFK will bring to HHS a voice that is in favor of reducing, or eliminating, the amount of fluoridation that is added to drinking water.” “There will be more dental visits and an acceleration of tooth decay as a result of this.”
In light of this, Henry Schein and other stocks in the industry provide a ray of hope in a field that has mostly suffered since the election. The Health Care Select Sector SPDR Fund (XLV) is on course for its first three-month loss streak since last year after plunging almost 3.5% in November. In contrast, the broad S&P 500 has increased by over 3% this month.
As investors reacted to the news of Kennedy’s nomination last week, Gordon Haskett’s Bilson also noted that dentistry firms were among the few “spared” health-focused sectors. Kennedy’s reputation as a vaccine skeptic placed pressure on pharmaceutical companies, and processed food stocks suffered as traders braced for heightened scrutiny of so-called junk food.
Bilson described the choice of Kennedy as “causing widespread selling across the healthcare landscape.” The tremor was felt by health insurance, contract research firms, and pharmaceutical companies. Instead, the harm spread to items that were packed. as well as advertising.
Although the market seemed to be reacting favorably to Kennedy’s nomination, Bilson said that it would probably take years for regulatory changes to take effect. He said that the Environmental Protection Agency should have more authority over drinking water than the Department of Health and Human Services.
