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[music] Hello. I'm Greg Bonnell and welcome to MoneyTalk Live brought to you by TD Direct Investing. Everything will be joining guests from across TD many of whom you'll only see here. We'll take a look through the market and what's moving. It will answer your questions. Coming up, we will take a look and hear from TD asset management's Tarik Aeta on why he says healthcare stocks may be set out to outperform the wider market. And in today's web broker education segment will have a look at how you can screen for healthcare stocks using the platform. And here's how you can get in touch with us. Before we get to our guests today let's get you a look on our market. Still notes of caution on Bay Street, 127, down a modest 52 points. It is the price of crude oil. Some data out of China really that was quite disappointing in terms of their factory activity in terms of consumer demands. You have West Texas intermediate right now down about 4% of the barrel to 8845. Some of the energy names in Toronto including Crescent point. The NASDAQ, down about 2 to 3/4 of a percent of the box. Hudson's Bay minerals, of course China might have a mighty appetite and boom time for crude oil and some other precious metals. Right now industrial metals like copper. Right now you have Hudson's Bay about 1 1/2% down. Because of the border, we did start the week and the trading day on Wall Street in negative territory but then a flip in some of the consumer names fighting back against the weakness we are seeing on Wall Street again in energy and mining stocks. Right now the S&P 500 up about 1/5 of a percentage. Building on that rally in recent weeks. Tech heavy NASDAQ, let's check in on that as well. Negative territory. The energy names are still weighing on Wall Street. Exxon in New York, down about 2%, and that's your market update. [music] Many healthcare stocks are down from the highest put in earlier this year but according to our feature guests today, the sector may be poised for a faster growth in the broader market. Joining us now for more is Tarik Aeta, Global Health Care Analyst at TD Asset Management. Great to have you on the program. What you think and how can healthcare outperform the broader market? >> If you even zoom out beyond the investment implications, our personal health is our greatest asset. Good health gives us hope. Allows us to pursue our passions and live life to the fullest. When you take this back into the world of investing, healthcare as a result, benefits from several attractive qualities including the demand and strong growth. What drives a strong growth in healthcare is really to very, very simple things. First: oh growing in aging. A global population. Here in Canada for instance, while population growth is roughly 1% per year, adults over 65 growth three times as fast. As we all age, we need more healthcare services and the second driver of healthcare growth is innovation. Just like the technology sector it opens to a green space potential for companies to sell more products over time, whether we are looking at transit catheter heart valves, oncology drugs… Many of these products did not or barely existed 20 years ago and have since become large revenue generators. Though as the sector continues to invest and we develop in research and development, it will remain robust for many years to come. >> Two key drivers. The effect that boomers have had at every stage of their lives and now firmly in their golden years… What about the recent earnings season that we saw? What is the snapshot look like for the past three months? >> Overall earnings were solid for the healthcare sector. Revenues grew 10% year by year. Earnings were up 9% as well. With 84% of companies beating or meeting estimates. When you look under the HUD, the top sector saw industry in the quarter, Pharma companies grew 15% year-over-year. Pfizer however lead 80% of that growth thanks to their COVID antiviral… ^... ¸A strong demand for Medicare advantage which is health insurance for seniors over 65. In third place, where the tools companies. They are benefiting from continued strong demands from the tools and services required to discover in manufacture drugs. The one area that did struggle in this quarter where the medical device companies. Sales were only up 4%. That was during hospital staffing shortages that held back elective surgeries. >> By breaking that down the way you did it does give us an idea. People say investing in the healthcare sector… But you start breaking it down and you realize there are different kind of companies operating in that space. How do you approach that is an investor? >> As an investor you have to look at the fundamentals for each of the different silos. For instance, when I look at the sector, there are three big buckets. Companies are discovering drugs, companies are developing widgets or developing services for healthcare. The companies discovering drugs are your big Pharma and biotech companies. While these companies do provide a lot of stability, above-average dividends, overall they've had a hard time outperforming due to the fact they are constantly running on this treadmill of drug and patent inspired. ^...¸At the companies are developing widgets and that includes the medical companies in the life science tool companies. They benefit from the same companies of demographics and innovations that we talk about but unlike the pharmaceutical companies, you don't take heart high risk of R and D. Last but not least the companies are developing services and this includes, you know, the big health insurers in the US, the hospital's, the dialysis clinic. It's a bit of a mixed bag over here but the nice thing about the sectors are there are some pockets like the insurance companies that benefit from some of the sector demographic tailwinds like an aging population which is something that does help them over the long run. >> Going forward, do we get much in terms of guidance from some of these different companies in the different silos as to how the second half of this year might look? >> Yeah. Looking to the full year of 2022 guidance, we sought revenue guidance taken appetite over the quarter and when you looked at EPS guidance, those numbers came down the touch. Driven by margin pressures. So if companies like the medical device companies that, you know, their sales grew but at the same time, their costs went up including higher wages, higher commodity costs and shipping costs, also they sell to hospitals over these 1 to 3 year contracts. They struggle a bit. But if you look at other companies like a life science tool companies, they benefit because not only their sales are strong but they were able to pass those inflationary pressures forward to their customers. Thanks to the business model where there are not these long-term contracts and it's easy to pass along those higher prices. >> Some of the criteria laid out as a space for innovation, obviously, there's a great deal of money put into research and development and of course the demographic is the boomers changed. Everything as they move through society, healthcare was changed as well. We talked about long-term focus investing. You are in this for the long haul if you believe in this thesis. >> Yes, in healthcare you have to invest for the long term given a lot of these cycles to take a lot of time. When drugs are discovered and brought to market, with the COVID vaccine and it happened quickly. But these are generally long cycles. It takes many years to play out. Same thing is when you have new innovations and you're trying to get adoption amongst the healthcare practitioners. It doesn't happen overnight. Usually it is a couple of years in a process. You need to be, in the healthcare sector, (. . . ) Investors are eyeing signs of weakness in the world's second-largest economy. Key gouges of consumer and manufacturing activity in China came in well below expectations in the country's central bank surprised markets by cutting some key interest rate. China zero COVID policy has seen renewed lockdowns in major cities this year pressuring economic growth. And the countries once booming property market is showing considerable signs of strain. Home capital group said it has turned down an unsolicited buyout offer the alternative mortgage sender says an arm's length third-party expressed interest in buying all the home capital's outstanding shares. In a release, the company says the Board of Directors reviewed the offer and decided it was not in the best interest of the company or shareholders. And here's the main benchmark index in Canada trading. China pressuring the mining as well. Pushback in other areas as well as our stocks today which are rallying. Right now down about 43 points about 1/5 of our scent. South of the border, the S&P 500, although we do see energy names and mining names holding the street back from a mentor performance, we are seeing some money moving in the consumer stock south of the border that's interesting because of course we have a big week ahead of us in terms of some of the biggest retailers in the states. Coming out with their quarterly earnings and also getting a retail salesman for the American later this week. Right now you are up pretty modestly. We did start the day negative territory with 4287. We are up a little side effect of a percent. On Wall Street. We are back now is Tarik Aeta with TD asset management. First question of the day, can we get your view on Pfizer were now? It's pretty hard with the pandemic not to hear about this. >> Pfizer is been one of these controversial stocks over the past year. If you look over the course of the pandemic, they were lucky twice. Once in developing a COVID-19 vaccine in partnership with another company and the second time with Cohen antiviral. So there are two COVID beneficiaries twice over. Going forward I guess there are two key debates with Pfizer. On the one hand, people are worried about how sustainable those COVID revenues are and the other thing people are worried about is how well will we deploy that capital generated during COVID #I guess on that first debate, in terms of how sustainable those COVID raised in the news are, there's no doubt those revenues will come down next year but, you know, COVID is not going away. It's going to be with us for some time to come. As such, there will be a similar penetration rate is the annual flu shot. Still a demand out there for booster shots and vaccines as well as antivirals for high risk individuals. When it comes to how they will deploy their capital, Pfizer has been fairly conservative so long with this process. Doing smaller tokens. Late stage assets or drugs are already commercialized. Reducing the risk for them to do these deals. In terms of internal RD, a variety of different pipeline initiatives are being worked on. This includes a flu vaccine that can be more effective potentially than the current flu vaccine, Lyme disease vaccine, a vaccine for shingles as well as a new drug for diabetes and obesity. So overall, we will need to see some of these pipeline opportunities really play out before the next stop move but that is what the company is working on and that's what the focus will be on for Pfizer the next year. >> That's obviously important for people to look beyond the COVID story. These companies are developing drugs long before COVID and well long afterwards. In terms of the pipeline, is at the risk? Just waiting for some of those efforts to become a success if they become a success? >> Yes. That's a risk. Obviously, if they are spending all this money that they generated during the pandemic on their pipeline, and if the pipeline has a few failures out of the gate, that's going to be received fairly poorly by the market. But we just have to give it time to see a successful it is. They do have many shots on goals and that hopefully should develop to drive some new drugs on the other end of it. >> We have a lot of interest in some of these names individually. Another question coming in. "I'm interested in Thermo Fisher. What is the view on this one" >> If this is the leader in the life-size, life science tools, headquarters in Boston in the US, what they do is they manufacture all the picks and shovels required to discover manufacture drugs. Everything from basic lab equipment all the way to the reactors where you produce vaccines. Specialty chemicals and a host of products in between. What makes this as well attractive is that they benefit, regardless of which company discovers the next big job. So the arms dealers in the biotech industry, on top of that, what makes Thermo unique is a couple of things. First they own the Fisher distribution platform so with that platform, they sell their own proprietary products as well as third-party products in over 400 labs across the world. They keep buying companies and adjacency over time. That overtime allows them to provide a full breath of products and services to their customers ranging from discovering drugs all the way to manufacturing drugs and shipping it out. So they can provide all the services to both large and small capital biotech companies. >> It sounds like the kind of company that has a sizable moat around it in terms of sizing off competition. Is it easy it easy to come in and shake things up? >> Yes. They have multiple competitors but the closest one you could argue is a company like a big diversifying life science tools company. They will have a different set of competitors within each one. I would not say there is one competitor that is really bumping head-to-head really aggressively with them. >> We had TD's chief economist on last week to talk about in the bank's view, a possible recession at some point next year is a coin toss right now. What do companies look like in a recessionary environment? Is that investment in demand still continuing? >> Yeah so the beauty of healthcare is that it is fairly resilient to ups and downs in the economy. So when you look at the biotech companies, those are extremely resilient. Even when you look at the medical device companies, those are fairly resilient. On the margins there will be some individual potential that can lose their health insurance. In the US, under 65 years of age… May be fewer hips and knees for instance. In the big scheme, very sensitive to the cycle. One of the areas in the industry that is more sensitive would do the life science tool companies. 15% of their revenue is like an internal Fisher case for instance. It does come from an industrial client. They do sell equipment to semiconductor companies and sell equipment to other players and industries. It's only 15% of their sales but that 15% drops by 30%, it will still impact the numbers a decent amount. But overall, on the whole healthcare… >> What is your take on it? >> One of the best-performing drug classes over the past year our like peptide one receptor… I know it's a mouthful but basically drug at its core is fairly simple. It gives you a sense of say tidy and you will eat less. Your stomach will eat more slowly. Initially this drug was developed for type II diabetes to reduce long-term blood sugar levels but they didn't notice that a lot of people would lose weight on the drug. So what they did is they created a hired does version of the original drug and they rebranded it and now there is selling it into the obesity market. The drug is very effective. If you look at clinical trials, it delivers 17% weight loss. The prior most effective obesity drug from a year ago would only give you 6% weight loss so this is a threefold improvement. With over 700 million individuals globally that are obese, as well as 40% of American adults, there is a big need out there. There is a big runway for those who want this over time. It depends on how governments will be willing to reimburse those drugs going forward because there is obviously a lot of demand. Paying for it will be expensive. > That is interesting. In terms of the role that governments play through subsidizing a drug or providing coverage of a drug. Cannot make or break some of these medicines? Do not say the company is entirely? >> Some of the bleeding edge in terms of healthcare, those drugs tend to be more expensive and getting governments to pay for it is not always easy. In countries like Canada or the UK it can take a bit longer. That said though, if the drug does provide a good benefit for patients, if the health and economic argument is there, for instance, if this drug shows on average and obese individual will cost the healthcare system three now thousand dollars a year, if you had a drug that was priced below that per year, you can actually deliver net savings to the system. So those are some of the criteria that go into these debates with governments. > Fascinating stuff as always. They sure you do your own research before making any investment decisions. We'll get back to your questions in just a moment. As a reminder of how you can get in touch with us at any time. And now the education says segment. Web broker does have tools which can help you. Joining us now is Hiren Amin. (. . . ) >> Healthcare is poised to continue to grow as it is one of the most innovative sectors for the future and it is fuelled by the… The trend that people want to live better and longer. If you go by the adage "invest in what you know", drug company certainly do qualify the where do we begin? One approach we will look at today is a top-down analysis approach. We are looking at the overall big picture to use this method to analyse on the economic level and then honing down further on it. In top-down analysis,… We explore these opportunities that follow a cycle. So we step into web broker I will show you how to pull up these sectors. We start with research appearing going to the markets. We will go into "sectors and industries " from here. Once this loads up we are going to scroll to the bottom where we can see sector performance section here. Keep in mind, I do have the US flag clicked on over here. You can also view it on the Canadian side but since the broader healthcare sector, we will use the US flag here. All these different sectors you can analyse. … We look at things like interest rates, unemployment numbers, domestic GDP… Also inflation numbers. Of course this is a hot topic for today. We see how this affects the economy but how does it affect the different sectors? A good hedge against inflation. Demand for healthcare is immune relatively to inflationary pressures. Therefore it's also being reported traditionally as a strong defensive sector when it comes to the market. Now we can see on this assessment level, different factors we can assess. We can trade multiples on the healthcare sector along with the growth here. This is also part of why investors… Other defensive sector… And if we switch to the performance, we are seeing on the healthcare consistent positive performance across the different time frames but on a long-term perspective, the healthcare sector is in fact been able to outperform the broader market by a large significant margin in the past. But also, it also offers greater protection during market drawdowns and downturns as well there. Because we talked about trading multiples is how we want to see the index itself. If we want to do a comparison to see how the sectors stack up… If you want to look at the index here you can click appear on this tab on this page. You can click any major index that you want to see. Maybe the trading multiples. Were talking about S&P 500… We will stay in the US of course. Click on the link here and you can come down here on this pop-up window. Once you have charts loaded up over here, you're able to see the dynamic view on the ratio of what we're looking for. Different indicators we can choose. And now we can see and track different trading multiples of the broad market index. We see sort of that 20 range over here. I would just expand my chart here. 20 to 21 range right now in assessment. And you can really benchmark for any index that you want to compare different sectors too. If we go back to our sectors, the sort of, second stage would be once you've analysed the sector that you want to land in which is healthcare which is what we're talking but of course, today. Investigate in many broad-based… Kind of six or seven. Manage healthcare is essentially insurance companies and pharmaceutical companies. Follow a similar guideline to assessing those. We are going to pick where there is a relatively low trading multiples here, and so we can also look at performance wise on this industry and we are seeing consistent positive performance as well. So you can actually now click on this industry and see which different stocks are available within this industry and you can use that same sort of guideline. You can really also use a combination of fundamental or technical analysis at this stage. … Greg that's a bit of an idea of top-down analysis. >> Great stuff as always thank you so much. >> Thank you. >> Our thanks to Hiren Amin, Senior educator at TD assessment. Before we get back to your questions about healthcare, a reminder of how you can get in touch with us. You can send us an email any time at moneytalklive@td.com or you can use a question box right below the screen here on web broker just writing your question and hit "send" will save one of our guests can get you the question you'd need answered right here on MoneyTalk Live. >> We are back with Tarik Aeta taking your questions. Here's an interesting one that takes the conversation home. It opens the whole discussion about what it means to be a healthcare stock in Canada. Are there ways to play healthcare here in Canada? Where composed a little differently. >> Investing in healthcare here in Canada is always very tricky. If you look at the TSX opposite, for instance, healthcare is less than half a percent weight and most of that is either cannabis names, senior assisted-living facilities as well as the former valiant… None of really great ways to try to express that view of long-term demographic trends and innovation. So really, to invest in healthcare, one has to go outside the borders of Canada unfortunately. Globally diversified healthcare portfolios comprised of companies in the Pharma and biotech and medical device and life science tools and services companies is probably a much better way to express that view on healthcare over the long run. >> There was discussion, obviously, during the pandemic wherein we were caught flat-footed with the vaccine development because we lost so much over the decades. Our in-house abilities on this front. Did much ever come of that? Should we be thinking longer term out about Canada having a booming pharmaceutical sector again or is that sort of passes by? >> I guess that will take a few years if you and have a homegrown Canadian pharmaceutical companies. It won't happen overnight. The federal government did see what happened during COVID and not having the capacity to manufacture PPE or drugs or vaccines. That will take many years. The federal government did he see what happened during COVID in that not having the capacity to manufacture PPE and others have signed deals with the Canadian government in our building facilities in Canada and are producing vaccines and other drugs here. I think there will be more investment in Canada but it will happen mostly through, you know, international and US multinational companies coming here to the US instead of homegrown talent. At least at the beginning. That will take many years to develop. >> Another question we have: do you expect more merger and acquisition activity in the healthcare space? >> It's a very important part, healthcare in the sector. Especially in Pharma and biotech. There are over 5000 companies globally with at least one drug in development. Most of these companies are small biotech companies that just have a few dozen employees. Fairly small. Discovering a drug is a whole different ballgame than trying to run clinical trials and trying to manufacture those drugs at scale and trying to go out there and increase a physician's awareness and awareness generally about what these new innovations are. That's basically were these big Pharma and biotech companies come in. They have those skill sets that the small biotech's need and at the same time, they are constantly running on this treadmill of panic. So they need to go out there and bring these new technologies in-house, bring these new drugs in house. So they need to go out and do merger and acquisition. In 2020 and 2021, this took a pause because evaluations were very high and some companies took time out and set it on the sidelines. Now evaluations of come back in. We've seen them on conference calls talking about how they want to be more aggressive and saying they want to do this going forward. We are seeing more deals over the last few months. So that's deftly a trend I expect to continue to see them at the head. Assuming markets are stable. That should continue, that trend, in the months ahead as we see more acquisitions to buy. >> When I think of those big companies, it occurs to me that I'm wondering if a focus on M&A ever interferes with a focus on R&D? There are obviously so many dollars for these mega names. Did they ever conflict with each other? Those two visions? >> I guess the way I've seen it from my experiences that generally, the internal R&D is not enough to offset all panic buyers. Especially mega Companies. The JJs and the Pfizer. These big names. They all will develop and work on their own internal R&D. That's a key part of their strategy. But generally, that's not enough in their humble. They realize a lot of innovations in this world happen outside therefore walls and they need to be looking forward and see what's happening out there and bring that technology in when it services to the market. >> We are talking about research development and this question segues nicely. What you see as the next areas of innovation in healthcare over the next decade? >> A lot of things to mention… Maybe two things I would mention relating to this: the first one would be genomic based diagnostic. Especially in liquid biopsies. The idea here is we could scan for micro-fragments of cancer DNA floating in your blood in this way we can catch cancer early when it can be more easily treated and improve survival rates. That's very important because cancer is the second leading cause of death globally and here in Canada, cancer impacts one into Canadians. Almost 1 and two Canadians over the course of your lifetime. One in four Canadians will succumb to cancer. There is a big social need over there. So in the same way that mammograms were a big step forward when it came to breast cancer in 1980s, when it comes to liquid biopsy, the vision is that a decade from now we would be able to screen for many cancers that currently we cannot screen for. So the idea that cancer, lung cancer, ovarian cancer… A lot of these cancers that go unnoticed until it's too late, we have this technology, it will be a big game changer. The other area of innovation I would call I would be genomic based therapies so mRNA vaccines are a good example of that. During the pandemic. Something that is interesting is that McDermitt is working on something called a "personalized cancer vaccine" so the idea here would be to take someone's cancer and sequence their DNA to see what the unique protein markers are of the individual cancer. Then create a personalized cancer vaccine developed individually for that person that can best address it. So we will have data on that pipeline program coming out later this year, phase II program. And it will be a very interesting read up because it could potentially add another toolbox in our toolbox against cancer. >> Interesting that you name a dharna making moves in the space. Other names we need to consider we talk about genomics and the push their customer >> There are a lot of names. I guess, the diagnostic side there are big names like Illumina and on the therapy side it is very fragmented. My dharna, the personal cancer vaccine is one. But a lot of the big Pharma companies do have programs in terms of gene therapies. There are a lot of names in that space. >> Should someone listening to our conversation right now just sent us a question. I have no idea about these topics. What are the processes for bio genomic companies? You work in that space at all? >> Yeah. I guess bio genomics, biology and genomics. When I look at healthcare, I look at how drugs are discovered. If we go back 30 years, a lot of the drugs were small molecule drugs. Chemically synthesized. The last 10 and 20 years a lot of the new drugs of antibody-based drugs and we look into the future, a lot of these therapies will be genetically based. Whether it's mRNA, whether it's cell therapies or gene therapies… A lot of the new drugs over the next decade will come from these emerging areas that are made possible through genomics. But I think there are a lot of opportunities however it's very fragmented and it really depends name by name and what does these categories are going after. >> I'm glad to hear and answer these questions because I have not taken a science class since… I don't want to date myself but 1990. We'll get back to your questions with Tarik but is always a reminder to do your own research. Here's a reminder and how you can get in touch with us in any time. Send us your questions. There are two ways and get in touch with us. You can send us an email anytime at moneytalklive@td.com or you can use the question box right below your screen here on web broker just writing your question and hit send. We'll see if one of our guests can get you the answer you need right here at MoneyTalk Live. The health of the US consumer in the face of soaring inflation will be in focus this week. Several of the biggest names in American retail including Walmart, Target and Home Depot are on deck to report quarterly earnings. Investors will also get fresh data on overall US retail sales landscape. Consumers are proven pretty resilient in recent months despite high prices. Eager to spend with all those covert restrictions behind them. This week's earnings will be a key indicator of whether that appetite to shop remains strong. Let's segue into our market check right now. We seeing some green on Wall Street. Let's start with the TSX composition. We are off to Lowe's in this session, still feeling the weight of the price of crude. Going back around substantially in that disappointing economic news out of China. Right now 20,147, a pretty modest 32 points to start the week. A little less than 1/5 of a percent. Some of the names weighing on the trading include a Suncor. Home capital said no to an unsolicited buyout on the news of that. Stock of 31 bucks and $0.30 almost up 10% on the day. South of the border, Lussina turned in the trade. Interesting Segway talking but the retail earnings we will see later this week. Were actually seeing some money moving to consumer names. South of the border,and now up 1/3 of a percent of the S&P 500. Let's check on the NASDAQ and see how it's bearing right now. Although most half a percentage right now after a negative start. Just a little bit cautious coming off that China news to start the trading week. But right now, at this moment, we are building on the Summer rally when it comes to industries. Let's check in know. Still feeling pressure south of the border when it comes to the energy trade at 64, 84. … Were back now with Tarik Aeta from TD asset management. Next question would be what would you say is the biggest risk to investing in healthcare? >> The Achilles' heel of healthcare if I could just pick one thing would be the strong dependence on the US market. To put in perspective, US accounts for less than 5% of the global population accounts for roughly 25% of global GDP. But the US accounts for 40% of global healthcare spending. 50% of global branded drugs spending an even higher percentage of global healthcare profits. Over 50% of profits of the industry is generated in the US. So it's important to watch what happens out of Washington in terms of regulatory developments. In terms of political changes and developments there. That can definitely have a really big impact on the sector. Given that the US government has programs like Medicare and Medicaid that does roughly control 40% of healthcare spending. >> The government support of this kind of healthcare spending? Another question were getting about political debate. We see this so often in Washington over drug pricing. How can that hit the healthcare stocks? >> So drug pricing is in one of these things it is been contentious for many years. It comes and goes and it never seems to go away. I guess one thing that is interesting though, last week as part of the inflation reduction asked, we did get the first piece of healthcare legislation. A meaningful piece of legislation in many years. What the legislation does show is that starting in 2026, the US government will now have the ability to directly bargain with drug companies. So starting in 2026 they will bargain the prices of the top 10 drugs that don't have any generic competition. The net number will increase by 2029. The 20 drugs. On top of that the US government is going to Pricing increases to CPI. So drug come these will not be able to increase the prices going forward. I would say the circle more alarming on the surface than it may seem. But just a couple things. These rules only kick in 9 to 13 years after a drug is been on the market. If you think of drugs, the patent expires anyway so once you go 15 years out, that drug is going to go off patent anyway. Most of the economic value of that drug is still retained by the industry. Given the rules only kick in 9 to 13 years after the drug has been launched on the market. The only thing, the other thing is that the rules don't say anything about what the drug prices can be listed as. So going forward, Pharma companies will just list the new drugs and higher pricing to offset some of those other pressures. In terms of CPI indexation, a lot of companies have been shy to increase their pricing more than CPI anyway. Ever since the 2016 presidential election. So I don't see that as a big headway given the industry is taking those single-digit pricing per year if they're doing that. >> Fascinating stuff. Right of time for your questions but for your final thoughts, there's a lot going on in the space. We started to show talking about how you felt the longer term prospects for the sector mean outperformance. Were talking about an aging society ultimately. >> Yeah. I would say if you look at some of the data over the last of the decades, healthcare is grown. Grown earnings faster than the broader S&P 500. At the same time, today healthcare does trade at discounts with the S&P 500. So you have a sector here the trades a slight discount of the S&P 500 and at the same time, over long run we will grow EPS faster. So over a multiyear horizon, you have a sector here that cannot perform. It's very hard to call the quarters even on a one-year basis but over a multiyear basis, like all the ducks are lined up for the second key performing well. >> Fascinating discussion we appreciate you joining us today. Thank you to Tarik Aeta from TD asset management. >> Review for later this week and you can also send us your questions. Just email us@moneytalklive@td.com. That's all the time we have the show today. Thanks for watching and will see you tomorrow. [music]
